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HomeMy WebLinkAboutAttachments01 introduction master plan 02 background historical context 03 design objectives guiding principles 04 the vision masterplan 05 implementation taking the plan forward connecting to the lake 5 i �w t+Ke (jiGSOro��e downtown master plan draft 04 -30 -09 vr^'— A i.u�gpa downtown master plan draft 04 -30 -03 The Redevelopment Agency of Lake Elsinore is sponsoring the development of this Downtown Master Plan, which will set the vision for the downtown area in collaboration with the broader Lake Elsinore community. MASTER PLAN ORGANIZATION This Downtown Master Plan is essentially comprised of three parts - the vision master plan, the economic and feasibility analysis and the downtowncode. This master plan summarizes the vision for the downtown master plan. It is important to understand that although the master plan is comprised of the three different elements, they should be viewed as being fully integrated. To fully understood the vision for the downtown, all three documents must be and read as a whole. BOLD VISION The Lake Elsinore Downtown Master Plan is a bold vision to transform the historic downtown core of the City of Lake Elsinore, in Southern California. The scale of the master plan is ambitious and will require a strategic implementation framework to create opportunities for both public and private partnership investments. Additionally, this Downtown Master Plan will includes an implementation strategy to help realize the vision for the downtown of Lake Elsinore. One major milestone of the master plan, aims to connect Main Street to the Lake which will become one of the most signficant downtown redevelopment plans within Southern California. The development and implementation of certain elements of the Downtown Master Plan, is the 'key' to the success of the downtown. The master plan sets the strategic framework for the revitalization and historic preservation of the downtown that creates a Main Street that is a viable, livable and memorable place for future generations to come. connecting to the lake 9 10 taKEisA\moiic downtown master plan draft 04 -30 -03 p, ✓. �. 1! �` y!g i ys , p J ( .5 main street the heart of downtown Historic downtown Lake Elsinore, located on Main Street, is nestled on the eastern edge of Lake Elsinore between the picturesque Ortega Mountain Range or Cleveland National Forest and the 1 -15 corridor. Main Street extends a total length of 3/4 mile, along the historic route US 395 connecting to the 1 -15 freeway. The heart of the historic downtown core, located at the southern end of the Main Street, combines an old- fashioned charm and atmosphere. Main Street offers a a limited variety of shopping experiences from antique and boutique shopping, to restaurants and cafes. Some existing historic buildings, many dating from the 1920's, still remain on Main Street today. The historic downtown on Main Street was enhanced in the 1980's with new landscaping, streets, sidewalks, curbs and gutters, street trees, brick planters, public parking lots, period lighting and sidewalk bollards and sign posts. One of the objectives of the Redevelopment Agency is the preservation of the existing historic core of its downtown along Main Street and to create further opportunities for infill and redevelopment along its' corridor. The Redevelopment Agency also aims to create a safer and more vibrant and walkable downtown, centered along Main Street. connecting to the take 13 f e IMA i r 5 ` r r sl i;r l 1 it { T': if li �I 4I, i �k I a � E J' e. R Po v _ , background - historical context HISTORY OF LAKE ELSINORE Extracted from the History of City of Lake Elsinore' web site. http: //www.lake- elsinore.org/ The Luiseno Indians, the earliest known inhabitants, call the lake Entengvo Wumoma, which freely translates into 'Hot Springs' by the Little Sea. Native American pictographs can be found on rocks on the Ortega Mountains and samples are also on display at the Historical Society Museum. SETTLEMENT The Spaniards called the lake 'Laguna Grande'; later part of the Mexican land grant, Rancho La Laguna. The 12,832 acre California Rancho was acquired and setttled by Don Agustin Machado in 1858, The Machado's adobe house became part of the historic Butterfield stage route, as a relay station for mail and passengers, and still stands today near Grand Avenue. FOUNDING FATHERS In 1883, the Machado Rancho was sold to City founder Franklin Heald for $24,000, realizing a dream that will endure and evolve as the future City of Lake Elsinore. City founders included Franklin Heald, Donald Graham, William Collier and Margaret Collier Graham (brother to William and wife to Donald). Margaret Collier Graham picked the name "Elsinore" because she liked the sound, a name taken from Shakespeare's Hamlet. It is the first'brand' name of three that the City adopted later. CITY INCORPORATION The residents voted to incorporate the City on April 9, 1888. At that time, Elsinore is in San Diego County. In 1893, the City became part of the newly formed County of Riverside. BOOMTOWN In 1888, the City population has approximately 1,000 residents, and boasts a variety of stores, a lumberyard, daily mail service, brick buildings downtown, and good water, soil and climate for agriculture. HEALING WATERS As a prominent stop along the Butterfield Stage Route, the word of the healing mineral and sulphur water within the City quickly spreads. From the beginning, The City's mineral springs have attracted visitors seeking therapeutic treatments from the late 19th Century. Built in 1887, The Crescent Bath House, also known as The Chimes, was one of the first buildings to be built in the downwtown. The building still stands today in historic downtown and is a registered national historic site. INDUSTRIES In 1888, the industries that supported the economy included coal and clay mining, gold mining, ranching and agriculture (fruit, nuts). The Good Hope Mine yields two million dollars worth of gold during its' working years and is operated on and off for 90 years before high groundwater ends its run and forced its' closure. The railroad first served the town in 1885. The Sante Fe train depot still stands today, at the corner of Graham Avenue and Spring Street, which serves as the Lake Elsinore Valley Chamber of Commerce headquarters. connecting to the lake 17 i s lyl• i .}n }4 I.V t t �t�• t ttk �i f KA f i }4 i background - historical context HISTORIC BUILT ENVIRONMENT There are two historic buildings within the boundary of the historic downtown, the Crescent Bath House/ Chimes Building and the Grand Army of the Republic Armory Hall. Both are currently listed in the National Register of Historic RHP. The Chimes building, built in the 1800's was one of the first buildings to be built within the City of Lake Elsinore. The list of California Points of Historical Interest includes the Grand Army of the Republic Armory Hall and the Lake Elsinore Hot Sulphur Springs. In the 1980's, the Riverside County Historical Commission designated Historic Downtown Lake Elsinore as a local historic district. The historic downtown is specifically focused on Main Street Heald Avenue, and Graham Avenue. The majority of the buildings within the downtown historic district were built in the 1920's and 1950's. The Lake Elsinore Downtown Historic District is currently listed in the Riverside County General Plan as a Significant Historical Resource. The list also includes the following buildings: - Masonic Lodge - Train Depot - First Presbyterian Church - Pioneer Lumber Company on West Graham Avenua A GOLDEN AGE The 1920s Lake Elsinore was established as a playground for the rich and glamorous, from the Hollywood and LosAngeles. The Valley hosted Olympic teams for training and high speed boat racing on the lake. DEVELOPMENTS IN THE CITY In 1964, Elsinore elected California's first African - American Mayor, Thomas R. Yarborough. He was elected to the City Council in 1948. In the 1950s, the lake completely dried up for the first time in recorded history, which lasted for a period of 10 years. In 1964, the lake was artifically filled with water from the Colorado River, delivered via Metropolitan Water District's Colorado River Aqueduct. The Skylark Airport, located in the floodplain at the southern end of the lake, emerged as a world class sky diving drop zone. The historic Main Street and City Hall were completely rennovated in 1989. The Lake Elsinore Outlet Center opened in 1991, boasting over 100 factory outlets. Professional baseball comes to town with the opening of the Lake Elsinore Diamond Baseball stadium in 1994, the home of the Lake Elsinore Storm, affiliate of the Anaheim Angels and later, with the San Diego Padres. connecting to the lake 19 = -�:,, •.�� m • , .3y � .. s � w -4s�v. � °q: � ^r w �. � [ y' background IT'S THE NAME: THE CITY OF LAKE ELSINORE In 1972, the citizens by popular vote, approved its' new name: the City of Lake Elsinore. This name change was favored as a way to promote the City as a lake- oriented destination area. The State of California Parks & Recreation Department owned the lake and a campground recreation area until 1993, when the lake assets and water rights are turned over to the City and Elsinore Valley Management Water District. blooms with construction of an earthen levee, project wells and a new inlet channel and outlet channel (a separate project). The LEMP project is completed in 1995. In 1997 EVMWD and the City create a landmark Recycled Water Task Force, to explore the acceptability of using recycled water to supplement the lake in dry years. State voters approve $15 million in bonds to create the Lake Elsinore & San Jacinto Watersheds Authority, which develops and constructs projects to improve water quality and habitat in the lake and surrounding watershed. Nearly ten years after the Recycle Water Task Force, Lake Elsinore becomes the first natural lake in California to win approval from the state for use of recycled water, which is safe for full body contact. NATURE'S WAY In 1981 and 1983, as a result of El Nino conditions, Lake Elsinore suffered from the worst flooding in recorded history; a souvenir flood booklet quickly sold out. The 6,000 acre lake and back basin fills with runoff from the San Jacinto River, flooding parts of Grand Avenue and Corydon Road, which knocked out power for days; several homes are lost and rebuilding is banned. In 1984, the Lake Elsinore Management Project is lobbied for in Washington, D.C. by Elsinore Valley Municipal Water District and the City, who are successful in obtaining a US Bureau of Reclamation Small Projects Act loan and grant of $39.6 million to build the project. The project is sold to residents as ending the cycle of flood and drying, fish kills and algal connecting to the lake 21 background DREAM EXTREME For the third time since the City's founding, a distinctive brand identity was developed to position the City for the future: Dream Extreme! The branding slogan, "Dream Extreme," was designed with "deep roots in the history and culture of Elsinore and continues to build on those attributes that make Elsinore a viable town." The new logo and slogan 'Dream Extreme' were adopted in 2006 to catch up the City's image with robust economic progress during the largest growth boom in the City's history. Lake Elsinore's population is nearly 50,000 in 2007. Major "big box" retailers and dozens of new retail and commercial businesses open between 2006 and 2008. CITY OF LAKE tt7LSIN0RE DREAM EXTREME CELEBRATE 120 YEARS In 2008, the City celebrated its 120th anniversary, choosing the theme 'The Spirit of the Dream' to honor the founders and those who have forged the City's progress to date. 22 GENERAL PLAN UPDATE The Downtown Lake Elsinore Master Plan was spurred by several events. Firtsly, the City of Lake Elsinore has been making revisions to their General Plan. It is envisioned that the proposed General Plan will be "based on a vibrant vision of Lake Elsinore for the 21 st century" and plans for "a city that has remembered, retained, and recreated the important qualities of its rich culture and history." Some specific goals of the General plan are to be "more than a bedroom community ... a balanced urban community, capitalizing on the lake as a tourist destination" and "develop a sustainable City that will be able to meet the needs of its current residents without compromising the ability of future residents and visitors of the City to enjoy a quality of life that meets or exceeds their expectations." CIVIC CENTER DESIGN COMPETITION A Civic Center Design Competition was held in 2007 to decide the location and design for a new city hall, council chambers, post office, public library, business incubator, and other government offices within the downtown. Two sites were identified by the City for the proposed Civic Center. The first site included 9.54 acres on Main Street and Heald Avenue by the Cultural Center, and the second site included approximately 17 acres extending to the lake at the south end of Main Street. Of the design teams shortlisted for the project, 22 of 24 selected the lakefront property. In July 2007, three finalists were selected including Brian Healy Architects of Boston, Hanna Gabriel Wells Architects of San Diego, and Koning Eizenberg Architecture of Santa Monica. However, during a public meeting, citizens criticized and voted against the proposed designs. A consensus for location and design of the new Civic Center was not reached. As a result, the City halted plans for the Civic Center and pursued a greater downtown master planning effort. downtown master plan draft 04 -30 -09 t '1 S Now t / rT pd I .y9�,'L1 � Gv:.G ��:� .+It,� �uu✓�rfi`t�.r i �',yn.�!G r .,,., i i .. r � _ '�'_ F wn. `ST'^'• R, :� P Iwo r a-�.aS ' awl t -' Lt 1?x�.fs`.s- �I''� e'•rt iL r. Jk a(rr , tt � °' rh rta 4rt Y r LAKE ELSINORE DOWNTOWN MASTER PLAN The Lake Elsinore Redevelopment Agency engaged the services of the Cooper Carry team to undertake a comprehensive downtown master plan. The purpose of the downtown master plan is to identify the goals and opportunities for future development within Lake Elsinore downtown. The purpose of the Downtown Master Plan was to set the guidelines for the future development as it relates not only to the City Hall / Civic Center but to the downtown as a whole. One of the objectives of the Downtown Master Plan was to engage the community and citizens of Lake Elsinore in a consensus - building process. A series of public workshops were scheduled to determine the views and objectives of the community of Lake Elsinore. PURPOSE The Lake Elsinore Downtown Master Plan provides a vision and strategic framework master plan to guide the future development of its' downtown. The purpose of this Master Plan Document: 1 Identify the goals, objectives and desires of the community vision and organizational framework for downtown Lake Elsinore; 2 Demonstrate that the goals, vision and strategic direction are grounded and realistic; 3 Develop a phasing strategy for implementation, through public and private partnerships 4 Create a master plan that is grounded in reality... a plan to build for generations to come PUBLIC OUTREACH The public outreach process began in October 2008, and has been coordinated by Cooper Carry throughout the master planning process. From the outset, the RDA and the City of Lake Elsinore have embraced an open dialogue with the community and required that the master plan and its implementation responded directly to the needs and desires of the public and stakeholders within the community. The community outreach has continued throughout the process with stakeholder meetings, public workshops, small forum group meetings and a study session with city council members and officials. In addition, the consultant team and city officials have engaged in regular working groups meetings, to discuss specific details. The goal of the public outreach is to gain input and support from the community about the future of their downtown. We recognize that the success of every downtown is all about the people who will use it on a daily basis, whether they live, work, shop, play or eat there. On December 6, 2008, a public workshop was held to establish the goals and objectives for the downtown master plan. The workshop was divided into three parts, metaphorically based on important components of a traditional waterfront downtown: the Town Square, Main Street, and the Pier. The idea was to encourage maximum participation throughout. Convening at the Town Square to be introduced to the happenings downtown, participants would then take a stroll down Main Street to identify what would make downtown viable and livable. Ending at the Pier, they would consider ways to make downtown Lake Elsinore a truly memorable place. The following pages summarize the findings from the public workshop. connecting to the lake 25 public workshops THE MAIN STREET GAME PUBLIC WORKSHOP SUMMARY The City of Lake Elsinore, the Lake Elsinore Redevelopment Agency, and Cooper Carry, Inc conducted a consensus building workshop on December 6, 20D8. The purpose of the workshop was to identify clear Such for the future of downtown Lake Elsinore. Theworkshopwas divided intothreeparts,roetaphorially based on import trucamponentsofatreditional waterfront downtown: Town Square, Main Sheet, and Pier. The idea was to encourage maximum participation throughout. Convening at theTown Square to be introduced to the happenings downtown, Participants would then take a stroll down Main Street to identify what would make downtown viable and livable. Ending at the Piet they would consider ways to make downtown Lake Elsinore a tmly memorable place. town square TheTawnsquammo Nesmgelor a nuler mm. eanicipan6weteasked to safety in downtown respond lothelmparamlssueinconventions aee 11 4tianc merul Man update process arW CHk Comer Oeslgn Thehcommentt listed below, Ilghts, sidewalks,imrezopen , sxurlrycameraz, more people emphzvlicd smnep9nu ao-eaaylamrdcaam brought is— Is.ue:omwl landscape around lake room success of downtown take blsln ore eo Ilght. whY lsnYltcleanu /safeR - bike paths and walking paths respectful ru wnpeny owners - Ilnear connective spine transportation waenaatwfeuyaz ozs lake,bus ryslem,tmlleybu ;etc large public area at lake direct a,. to lake connection of boat launch and senior center along Lakeshore signage flood prevention connectivity of downtown connective architecture camm,12 side, a later don't ruin nature /character of lake Elsinore unique lwly[ Is unique/ over eabout Lima Rumored 26 LN1:ELSIMOIkF. parking on main street water features, windmills on the hills "Historic "instead of "Old Town" old iro n m ountts plums Nat don, have the more h1h mrlc rob uc as Lake Elsinore -Taui downtowns civic center as a part of downtown sidewalks by schools stronger stadium connectivity lake activities call vs pewees boars,fisMngno casino reuse of old buildings why am Nry nos beMgreusem what ne 'he hsu, cnsu> some buildings me etemres mW need more CilyimoNemem social security office downtown city park cortical In IlpetdI -wu @r tower deeded to any seniors in downtown connection hot springs u ndergmund well -reuse wlthln downumn new business park not to the lake but nurtured Into downtown boardwalk around lake private awnetship ism ty- upper vanities for connrtwiy Participants on "Main Street" Participants at the Public Workshop downtown master plan i3�a-fr O4-30-19 public workshops town Square The Town Square was the stage for a public forum. Participants were asked to respond to the important issues that have arisen from the General Plan update process and Civic Center Design Competi- tion. Their comments, listed below, reemphasized some points already identified and brought new issues critical to the success of downtown Lake Elsinore to light. DOWNTOWN WORKSHOP COMMENTS bike paths and walking paths respectful to property owners city park to stay deeded in perpetuity - water - linear connective spine tower deeded to city transportation water taxi or ferry across lake, bus system, seniors in downtown connection trolley bus, etc. hot springs underground well - reuse within large public area at lake direct access to lake downtown connection of boat launch and senior center along Lakeshore signage flood prevention connectivity of downtown connective architecture connect 2 sides of lake? don't ruin nature /character of lake elsinore unique (what is unique/ memorable about Lake Elsinore ?) safety in downtown no lights, sidewalks, stores open, ccty, more people no landscape around lake why isn't it cleaner /safer? parking on main street (City Hall) water features, windmills on the hills historic instead of old town Old Town references places that don't have the same historic fabric as Lake Elsinore - "Faux" downtowns civic center as a part of downtown sidewalks by schools stronger stadium connectivity lake activities sail vs. power boats, fishing, no casino reuse of old buildings why are they not being reused? What are the issues, costs? Some buildings are eyesores and need more City involvement add social security office downtown civic center new roads, one -way streets, improved roads new business park not on the lake but integrated into downtown boardwalk around lake private ownership issues - opportunities for connectivity connecting to the lake 27 public workshops main street Leaving the Town Square, the workshop participants took a walk down Main Street. Six shop fronts (with tables behind) were set up along the theoretical street, three on either side of the street. Each shop represented a different topic important to creating a viable, livable, and memorable downtown. The color -coded quote cards determined at random the six discussion groups and the shop at which they would begin. The six topics were: Architectural Character, Civic, Commercial, Public Realm, Residential and The Waterfront. ARCHITECTURAL CHARACTER The influence of existing architecture on the form of future developments in downtown will begin to define an Architectural Character. Historic buildings in Lake Elsinore date from the late 19th century and were built to meet the functional and aesthetic needs of the City and its people. These needs may not be the same today, and the architecture must respond appropriately. civic The Civic Center Design Competition presented the need for a new city hall, council chambers, post office, public library, business incubator, and other government offices in downtown. Instead of concentrating these uses into one Civic Center, there is an opportunity to spread these uses along Main Street to help catalyze new investment and development around existing historic shops and other uses, while also addressing some of the vacancies and infrastructure needs in downtown. Traditionally, Civic buildings are the most prominent features of a downtown, embodying the spirit the community at large. They become the visual representation of where a city has been and where it is going. COMMERCIAL Commercial development is integral to establishing viability in downtown Lake Elsinore. The Proposed General Plan calls for commercial development along Main Street from Lakeshore Drive to the 1 -15 Freeway, a mile -long corridor. The feasibility of attracting viable commercial uses to cover the length of Main Street, especially in current market conditions, is questionable. A more focused hub of commercial activity may be a wiser strategy that ultimately contributes to a stronger downtown. downtown master plan draft 04 -30 -09 public workshops PUBLIC REALM RESIDENTIAL The Public Realm is the inter- connective fabric of downtown where people can gather and interact with other people and the environment. It is this interaction that begins to create the sense of place, shaping its unique character and ultimately making it memorable. The Public Realm includes sidewalks and crosswalks, parks, landscape and hardscope features, signage, lighting, awnings and shading structures, street furniture, piers, boardwalks, and other components that influence and inspire the pedestrian experience. Improvements within the public realm can change negative perceptions of downtown, enhance connections along Main Street from the 1 -15 Freeway to the lake, and make downtown a more pedestrian - friendly, vibrant, and memorable place where people want to be. Integral to making downtown Lake Elsinore a safer and more active environment is creating more opportunities for people to live downtown. Currently, downtown consists primarily of commercial uses and land vacancies. When businesses and shops close at night, there are no "eyes on the street," which can make one feel uncomfortable and unsafe. Encouraging people to live downtown can help to deter these negative perceptions. More people living downtown can make businesses more viable by creating local demand, extending the hours of shops and restaurants. Main Street can then become an inviting place to be from early in the morning until late in the evening. WATERFRONT The Waterfront is one of the most important components of downtown, providing an opportunity to make a visit to the City a memorable experience. Historically, the City developed around the quality of life supported by the lake, the largest of the handful in southern California that are natural. Today, downtown is disconnected from the lake. The Waterfront discussions sought to identify how to re- establish this important relationship. The Proposed General Plan allocates the waterfront area in downtown as Open Space/ Recreation, which allows currently for open space and passive /active recreation, as well as commercial recreation facilities provided they exhibit exceptional architecture / site design / amenities. connecting to the lake 29 public workshops the pier The workshop culminated with a visioning session held on The Pier. An oversized board game was set up, with empty squares (similar to the property squares on a Monopoly board) forming two rows. Workshop participants were asked to identify the elements from the Town Square and Main Street discussions that they believed were most critical to making downtown viable, livable and memorable. These elements were then written in to the squares to fill out the board. Each participant was then given three fake ten - dollar bills. By placing money in the squares, they indicated where they wanted the City to invest money. The table opposite lists the elements, in order of dollars allocated to them. downtown master plan 04-30 -09 Slop XT l 1 '5 in 5' guiding principles ONE celebrate the lake ukenmanabwworuea. rw„ mw, a„ n< vyofi AelaFe•wlAa<w,w.,.mmtw,an• . 5 M 4ywmMt heacwn ,axnmukY4ewMAereafgnmentolxaln SOett WMOreRhellbny v4vnb Ae44 Yg Ory PakwiAAerealprvremet WlnArtt[mthanex tincgaJrMn9ry[etiA ProriaepuhkawnMeNewalvwlAanex WnlMmq Por4antiv'e,.x NeurmheWnelMaN S,rtet TWO create a vibrant and sustainable downtown u<vea.le,avumhY..l.a . wre[muwhYeml,wmmamueama,um., Pdbrenluer'[ raM1eaMArel».klwmrvwawhere .I. Eemy<m. I'MidvaoNXV Hq qunnmW4ureanaapmen<Wn anrkry NreWmt1.1nRW rwmewtma4[ullu,alvAtlN<oua . Ercewi¢gwpq mWdircarte ana allaNahk M1OUSYg aewlpmenu lw all age graupmanMre Wxnbxnantl WlnSU[M . WarceaMMgwt Me@uPryaneM[NreOaNeptwAe Nrba cMSlnSwepw[JV aN4gaw[e M.Yap WYnefrinabnwm MMnSUmwphaftaYm9mantlflaw . MlmpwtlryoPo[eaeMWmmalnammmgNbw <bufitlhehublingf N,M1eGaurvny Wrrlrt aYln' ra16WUN9f [M1rspm'enllmThmp<glrFMmnMirenhW gpealgnlCPRgpfin<ples abrghtin9anaruw Rwtle b,anhrydaMnlanaablxllb'ei aMpgnms IM+<willenw [IWm<ana Whwrlo Ae tlwm,awn XtluAnglumenmartn . aneenlyn[ CvmnIWUN9G+l,unitenmd4ma [ mmmunhy pYyhwuehwnmanln<enrer Csebp% opnrmh[ Ilrereb[ a, MO lw[M1llmurallya9Nfiombneimvaombu . Melvpgnn< aneManMnalpmgnmsmwulwhl ,pmpmyupgratleraMSlrop r�pnaenhaw<mm� CelebnR Ae rYwnmxn emimnmenl wi A YYelma sM wrel `mpvxmxn4nl,M1 rgNn amen THREE create a civic identity CelednulaYe EkYwreazde'tlryon AelaF{ wit l,anewWawrtrpnrOk,en'arMVrtatyanex pleras an c<w¢bn el NaN Sba, whM1 nmNblMam VaA wale mmwobkpvh@ hud& ng[ anemw[ Iryl xYlMaa <.mlya,[OrlmnsrrvnurelmpmwmnLL�Gry 1pbaryaMmuuumam<Wwal huiNnBa FnM1arceanavard NeeLr<vg(lry pa M1. wMlr Jrereal43nnerca llNFSOrctaneveauamr Ww< aem WinS,ree[m1Nn[WSyWmiryeoCry WO . WrNUebnalwtwwe Whll[yFare WlrrenMpeMapmm,y Rwmntvert<b.aalr9wmnwwmro Aenmprt<apwnmwmamra. Geaua Wdl[[IrzbormumYNU,wrMUx,Mpw[<#ra Xnglhol WpSUee, owebpeMyrm MO9. amA ,ga,meyp.mYa,mnmar4mamwa,wrM.,o EmowaWwmm.mrypanmwamX Wab9a, xmrrnry .aevrem,NXgammppkmemlm.Nmrnm< .Irlr.vvCECnaLn MreIW r< mlvu.,< n. m[meNwmmmep<aarvo�/wmllepe,X.[e Enhamewl<emYryvmwmm.N. p.<N9varn[onl9s Oevel. paxarM1Mlymtle]napepmaambAeammexn FOUR improve walkability and connectivity . FManre[mnmhiryOUnYe tl<wnlmmwAebb GrnexyYhkanakn NUam ZmYrgewWWnB >mnmminmhepemeNMlm)11rWMaM Sceet Geatewl4abk rl, renwMmw LLfawah4mbiuremvapin9aMqua4ryr9hw9 Ppal$n WNEUeet mlmprpxwnneoMtlt ofMh4exb4wM [MrFewm¢µ1a4vMrtdN[WIFe auxxmm ManenbM¢arer Aeuw4 Roaaeaaeq•m wnlre.nmwnaNm+:rAN emwrtmm muwamairrslreLLwi trxnwa<mxireartov..npxaveiwr4N9 im mep Vttnavnry [wwpab4NnmbaartlwaAanaeAUney weeke &OapMeurYnhrMg¢atfOmarWmPortery (eltlrNegamnyeppMUnii¢s Imp4mm,gaenunrryh aIIWMiahPlM'vaKazappropYt ¢ wgnui,etlretwxemlwpbnLL cewNVaparM36bmaksana wbnapa[ultvrt floAaeahemalMtnns { arwaungtimr FIVE develop an urban design framework and guidelines � �n nlhe N.mlw.n W Wn Mr4)n Mauw PW to gvih Ae rumre 4reXprenl w41rN,M pMUw OwrMVxnVMn MgnGUiatlnesbguitle M1nure @rebpmeNmlhNAetlamumm connecting to the lake 33 guiding principle2 - create a vibrant mixed -use downtown civic land uses residential land uses 36 commercial / retail land uses downtown master plan draft 04.30 -08 guiding principle2 - create a vibrant mixed -use downtown hospitality land uses connecting to the lake 37 guiding principle 3 - create civic identity existing street diagram proposed street diagram The Big Idea for the City of Lake Elsinore Downtown Master Plan is to reconnect the City to the Lake. This bold and creative gesture requires the re- alignment of Main Street and Lakeshore Drive to physically connect the downtown to the lake. The Downtown Lake Elsinore Master Plan intends to reconnect the City to the lake. Main Street will be extended to the lake, and the waterfront will be activated with a variety of uses. This new interface with the City's prized resource will be the centerpiece of a viable, livable, and memorable downtown. The City of Lake Elsinore historic Main Street is located adjacent to Lake Elsinore. Currently Main Street is disconnected from the lake front. The downtown master plan process recognized the importance of reconnecting the City and its'residents to the lake. Many of the historic buildings in Lake Elsinore a located near the lake. The City Park, on Main street, land dedicated to the City in ???as public lands. The connection of Main Street to the lake would require the realignment of several roads within the downtown. Citizens attending the workshop expressed their strong desire to reconnect to the lake. e gg i.uKr Cl�wtngr downtown master plan draft 04-30 -09 a ' 1 EVERY MON / {� 8 Ptv9 Iei �l� rS 3 ryryrf, �. H�7 A # � t�&�� � ° r � 4 a �aaa - ;?cBtkn— ��er�� ��� '.��f " >• � i °— .,'�?f..� „ag. � � �{ J M la- go( u r x i �. -. 1✓"i �� f�� fix% i ` 1 '(` ♦ U3 '� `' ig� j'y1� ` y ac guiding principle 4 - improve walkability and connectivity 40 �I'm U.Snmil[ connectivity and green streets downtown master plan draft 04 -30 -03 guiding principle 4 - improve wamability and connectivity connecting to the lake 41 7 , / \ 0 � 0 /� d � � � � d� / the districts -- - .. . . . . .. ................ a, e 8 • tie ' 'Yts~•° :i� nip 6 f Old• O! ~'\ e l.le 9!a E a= m� G o t.z o21 } ` t qq 1 i GARDEN'D ; TM ............ .............CF'7a?............ WATERFRONT DISTRICT 46 LAKEC5,M 1�1: downtown master plan drat? 04 -30 -09 5 districts - architectural character Gateway District Historic District Waterfront District .... " "** *......111. 1111........................ 1. site area requirements a) Setbacks b) Permitted Encroachments - within Setbacks - within Public Right of Ways frontage type standards a) Arcade b) Forecourt c) Residential Edge d) Gallery e) Stoop f) Storefront g) Exposed Parking Garage III. architectural design standards :a) Building Massing, Height, and Architectural Detail 1. Maximum Length of Building Frontage ii. Active Ground Floor iii. Building with Base, Middle, Top iv. Corner Articulation V. Building FaSade A. Building Materials Al. Building Roofs All. Building Heights ix. Building Fenestration- Composition of doors,: windows, topenings, and their ornaments and proportions b) Courtyard Spaces c) Pedestrian Access /Paseos d) Utility Service Areas e) Green Building Requirements /LEED IV. parking structure, parking districts, and loading a) Parking Structure 1. Residential Unit Garage I Freestanding Parking Structure Treatment b) Parking District Q Loading 1. Non - residential ii. Residential V. signs and public art ................. ............................... connecting to the lake 47 the downtown districts GATEWAY DISTRICT Gateway District The Gateway District is the part of downtown most visible from 1 -15 and the first area through which many visitors will pass. This district must make a positive impression whether seen from a distance or up close. Glass A office buildings, at 5-6 stories, will be the tallest in downtown. Their prominence and architectural qualitywill makethemiconicsymbolsof the rebirth of downtown. Atstreet level, a pedestrian aesthetic must be maintained. Buildings fronting Main Street will feature retail space at ground level (mostly to serve offices). Parking structures will be needed to accommodate the high volume of cars that will accompany these office uses. 48 taKE {'jtGlRl4e downtown master plan draft 04 -30 -09 7 V lk� ...- -..... � �� »\ ^`w ©< w«t2 \ \� 11 RIM \ � 2 ? d� 2 "i �3* �� ���� \ \ \ \�� ° ^© ~22� \�����\ 7 V lk� the downtown districts CULTURAL DISTRICT Few cultural buildings currently exist In downtown. Thereisaneedforaconcentratedcolleaionofcultural attractions and venues to draw people downtown and celebrate the City. Such a development would be a perfect complement to the Civic Center and provide a second hub of public attractions and cultural /civic activity. The Master Plan recommends diverting Main Street around a circle containing a new public library and museum, and the historic Armory building. Nearby would be a performing arts center, supplemented by mixed -use retail and residential. The entire district would be served by a single parking structure. ". . Ct 4 Q F .�1 O ss9�b bP A 50 i.aK(si — �aM . downtown master Ian draft 04-30.03 r'. y. t " _ <o � E -� ar y{ P ) M a �+ r'. y. a �+ d I} y Ad ii yc the downtown districts WATERFRONT DISTRICT I r Y %�8yv. t 5th G; 5 t 56 LAKEC71.51ilou downtown master plan draft 0430 -09 implementation plan 1. Re -align Main Street to Lakeshore Dr. 2. Connect old Main Street to Library Street 3. Create new town square /park with land lost from realigned Main Street 4. Purchase land for new right -of -way 5. Improve quality of retail shops 6. Provide space for outdoor dining 7. Restore historic facades 8. Provide earthquake retrofitting 9. Infili vacant lots with quality new development 10. Allow residential units on historic Main Street 11. Convert cultural center back to community playhouse 12. Develop business incubator with retail on ground floor 13. Develop retail/storefront criteria manual to enhance pedestrian /retail experience 14. Build a pier as an extension of Main Street 15. Create a "Waterfront District ", with mixed use developments to create an active waterfront district 16. Develop a memorable waterfront park featuring public art and recreational uses (purchase as necessary land) 17. Encourage mixed -use development and Spa Hotel (purchase as necessary land) 18. Improve pedestrian access by creating a lakefront boardwalk and enhancing creek edge 19. Dredge the lake at the pier 20. Program water activities, farmers market, events, etc. at lakefront park 21. Enhance downtown identity to passing traffic at 1 -15; modify zoning to allow Class A office buildings in the Gateway District 22. Develop new city facilities, City Hall, within close proximity to Lake Elsinore 23. Utilize "facilities as catalysts for infrastructure improvements and the development of multiple districts 24. New Civic Center anchored by City Hall 25. New town square /park 26. Create a New public circle on Main Street, with cultural uses 27. Purchase land for Cultural District development 28. New library and museum as part of Cultural District 29. Celebrate the environment through lake and creek improvements, Environmental Nature Center 30. Protect historic building character while augmenting it with new architecture 31. Implement artful district markers 32. Encourage quality, mixed- income residential development 33. Attract quality office development 34. , Encourage a mixed -use projects 35. Provide for a variety of quality programming that will draw all citizens to downtown 36. Enhance retaillentertainment offerings; encourage new development that meets current and future retail requirements 37. Improve reality and perception of public safety; use CPTED principles 36. Celebrate gateway opportunities 39. Provide sidewalks, curbs, streetscaping, and quality lighting in downtown 40. Connect Lakeshore Drive via new bridge over creek 41. Provide alternative transportation options 42. Provide adequate downtown parking pools with easy access 43. Create a downtown parking district 44. Allocate land for strategic public/private parking partnerships 45. Re -align Main Street to create a gateway intersection at Lakeshore Drive 46. Develop a wayfinding and signage program that addresses all access points to downtown 47. Create downtown districts based on 5- minute walking zones to minimize perceived length of Main Street 48. Build pedestrian bridge at Flint and /or Pottery 49. Restore Main Street to its historic cross section; parallel parking rather than angled to improve traffic management on Main Street 52. Develop system for enhancing water quality with riparian zones 53. Encourage community activism and participation in public gardening, street -tree planting, supplemental maintenance of the public realm, etc connecting to the lake 57 t. %® WAV ""lamm 71t�w 7777�7-��-, 00 41, -1 , implementation - taking the plan forward ECONOMIC FEASIBILITY market analysis findings Peal estate opportunities are mid- to long -term due to cunemrecession. After years of rapid growth throughout the Inland Empire, recenthousing bust, credRcmnch, andjob losses makenear term prospects weak for the ne #few years. National and regional economic recovery is espeoed over the next sevemlyeam, and Lake Elsinorels poised to capture significant growth. Continued local population growth is the key to most development opportunities. Lake Elsinore has ample land supplyand isexpected togrow, to over 90,000 people by 2035, while also increasing local jobs by nearly 50 percent. Additional peopl e andjobs mean more demand for housing, retail, office, and hotels. Unless major transportation Improvements occur (high speed rail ?), the City is unlikelym Lea regional employment hub. Lake Elsinore is a working -class family town, with positive economic trends. The City has high percentage of children and parents, and low percentages oPyoung adults °and seniors. The City's income levels and educational attainment are modest, but getting higher. Downtown has some real and perceived issues to address, but also unique opportunities. Concerns about crime, homelessness, and parking deter some potential patrons from coming Downtown, and local spending power is modest due to low incomes. Downtown offers authentic historic character and significant amounts of developable land, especially near the waterfront. retail RETAIL in Downtown will gain increased vitality through local population growth and new attractions. More people living within easy walking distance from Main Streetwill increasethe retail salesvolumesachievablewithin Downtown, but it will still need to attract patrons from the whole City and the larger region. Public improvements to cultural attractions, safety, and parking can bolster Downtown retail, but retailers should aboworktogetheron merchandising andhoursofoperation to create a vital destination throughout the day and week. The Downtown plan should be conservative about where reel[ is allowed or required, so that the existing historic core can reap many of the benefits of sales growth. connecting to the lake 51=2 OFFICE development Downtown will be increasingly viable as the population grows. LakeElsinoredoesnothavea strougestablishedo fficemarke, but Downtown offers adequate humsporta ion access and unique amenities that can attract office tenants. In addition to public seoorjobs, businesses that provide direct servicesto local residents (professionals, health care, etc) offerstrong potential for Downtown. The addition of high speed rail would bee major benefit for Downtowns office development prospects. housing HOUSING opportunities Downtown include higher density developments focused on attainable prices with neighborhood conveniences. Multifamily and mixed -use developments are increasingly marketable in Riverside County as the population grows. As Downtown improves through public investment, proximity to commercial, cultural, and recreational opportunities should make Downtown Irving attractive. Affordable housing is in demand, and may be easier to finance in near-term than market rate projects. hotel HOTEL development Downtown can take advantage of unique waterfront opportunities. Lake Elsinme's hotel market has seen several significant investments in recent years, but at modest price points. Improved Integmfwn with the lake and Downtown for recreation and culture will bolster opportunities for upscale hotels, which have performed well regionally. 59 -v�. — a � � , : � � � : � � � ;«< � - �\ \\ W., implementation - taking the plan forward CELEBRATE THE LAKE • Build a pier as an extension of Main Street • Build new City Hall near the lake • Create a "Waterfront District" • Develop a Waterfront Park (purchase necessary land) • Encourage mixed -use development and Spa Hotel (purchase necessary land) • Improve pedestrian access by creating a lakefront boardwalk and enhancing creek edge • Dredge the lake at the pier • Program water activities, farmers market, events, etc. at lakefront park I, EXTEND MAIN STREET TO THE LAKE 1. Re -align Main Street so that it runs straight to Lakeshore Drive. 2. Connect old Main Street to Library Street 3. Retain and enhance the majority of the existing City Park 4. Create a larger and revitalized City Park with land lost due to realignment of Main Street on other side of existing park 5. Purchase land for new right -of -way connecting to the lake 61 implementation - taking the plan forward 3 RESTORE HISTORIC MAIN STREET • Improve quality of retail shops • Provide space for outdoor dining • Restore historic facades • Provide earthquake retrofitting • Infill vacant lots with quality new development • Allow residential units above the existing retail on 2nd and 3rd floors of the historic Main Street • Convert cultural center back to community playhouse • Develop business incubator with retail on ground floor 62 L.SI�F UIS ~II IC)IU. 4 CREATE CIVIC IDENTITY • Develop new city facilities, City Hall • Utilize city facilities as catalysts for infrastructure improvements and the development of multiple districts i.) New Civic Center anchored by City Hall ii.) New town square /park iii.)Purchase land for Cultural District development iv.) New library and museum as part of Cultural District v.) Celebrate the environment through lake and creek improvements, Environmental Nature Center vi.) Protect historic building character while augmenting it with new architecture vii.) Develop a memorable waterfront park featuring public art and recreational uses downtown master plan draft 04 -30 -08 implementation - taking the plan forward CREATE 18 -24 HOUR ENVIRONMENT • Encourage quality, mixed - income residential development • Attract quality office development • Encourage a mixed -use projects • Provide for a variety of quality programming that will draw all citizens to downtown • Enhance retail /entertainment offerings; encourage new development that meets current and future retail requirements • Improve reality and perception of public safety; use CPTED principles IMPROVE CONNECTIVITY • Provide sidewalks, curbs, streetscaping, and quality lighting on all downtown streets • Connect Lakeshore Drive via new bridge over creek • Provide alternative transportation options • Provide adequate downtown parking pools with easy access • Create a downtown parking district • Allocate land for strategic public /private parking partnerships • Re -align Main Street to create a gateway intersection at Lakeshore Drive • Develop a wayfinding and signage program that addresses all access points to downtown • Create downtown districts based on 5- minute walking zones to minimize perceived length of Main Street • Build pedestrian bridge at Flint and /or Pottery • Celebrate gateway opportunities connecting to the lake 1 63 implementation - taking the plan forward rA DEVELOP PUBLIC REALM MASTER PLAN • Produce a "Great Streets Manual' and a "Public Realm Implementation Plan" for the implementation of the public realm • Develop design /art program for gateway portals • Design /construct urban design interventions • Create a public circle on Main Street • Create a public square on Main Street • Restore Main Street to its historic cross section; parallel parking rather than angled • Implement artful district markers, ie. water features, sculpture, etc. • Encourage community activism and participation in public gardening, street -tree planting • Develop retail /storefront criteria manual to enhance pedestrian /retail experience • Enhance image of downtown at 1 -15 • Modify zoning to allow Class A office buildings in the Gateway District 64 tuKe �jisusni6. -ate- Pik IMPROVE QUALITY OF SURROUNDING NEIGHBORHOODS • Develop programs for city assistance in property upgrades and maintenance education • Develop programs for relocation of architecturally significant homes to vacant lots • Identify and purchase vacant lots for the creation of neighborhood parks / community activity centers in 5- minute walking zones • Encourage quality development of affordable housing options for all age groups downtown master plan draft 04 -30.08 implementation - taking the plan forward 9 10 SET STANDARD FOR QUALITY IMPLEMENT GREEN / SUSTAINABLE DEVELOPMENT PRACTICES THROUGHOUT DOWNTOWN • Determine acceptable development standards • Public will set standard; require a. minimum level of through writing and updating existing city code LEED Certification for all public buildings • Initiate a coordinated marketing campaign to attract • Implement green strategies in all public right -of -ways quality developers as appropriate • Purchase land in Waterfront and Cultural Districts I. Trees and create RFPs for developers ii. Native plants iii. Pervious paving iv. Water conservation v. Urban farming vi. Bio- swales • Develop system for enhancing water quality with riparian zones connecting to the lake 65 I the lake. The master plan a series of 'g reen'and 'blue Valk' providesa landscaped is V1$ it _ e .F 1 Mt' \ice y i J I ✓� .a { 2 . / 4 / s 1 I the lake. The master plan a series of 'g reen'and 'blue Valk' providesa landscaped is infrastructure / streetscapes INFRASTRUCTURE / STREETSCAPES Street Connections Truck Connections Bicycle Connection Transit Connections connecting to the lake 67 proposed streetscapes gateway district - main street garden district - main street a 68 IHKF �isinoge downtown master plan draft 0430 -09 proposed streetscapes cultural district - the Circle (main street) historic district - main street (heald to prospect) Notes: 1. Sio retention zone shall be planted with native drought - tolerant species 2. Porous pavement section for parallel parking may be pavers, concrete or asphalt 3. Subdrain may not be required for freely draining underlying soils connecting to the lake 69 proposed streetscapes historic district - west graham street (main street to chesnut street) historic district - east graham street (main street to chesnut street) Notes: 1. Porous pavement section for parallel parking may be pavers, concrete or asphalt 2. Subdrain may not be required for freely draining underlying soils 7p i�� +TU++Ti�i. downtown master plan draft 04 -39.09 proposed streetscapes waterfront district - main street (sulphur to Lakeshore) waterfront district - lakeshore drive 1. Bio retention zone shall be planted with native drought- P 9 3. Porous pavement section for parallel parking may be pavers, concrete or asphalt tolerant species 4.S u bdrain may not be required forfreely draining underlying 2. Pervious paving not recommended for building adjacent soils enhanced sidewalks 5. Right of Way dedication will be required connecting to the lake 71 proposed streetscapes all districts - flint and spring streets Notes: A portion of Ellis has a 50' Right of Way and may require a dedication all districts - prospect and olive Notes: 1. Porous pavement section for parallel parking may be pavers, concrete orasphalt 2. Subdrain may not be required for freely draining underlying soils 3. Wide side of street to be determined 72 �r.�:r Uismniu downtown master plan sraf- 04 -30.06 at -a .glonce key ouilding placerne;nt +size ootenfolr:ew de.e :1 on w poN alloyed use, city of cake elsinore doventowr molter lolor, 2psitlt=nfinl The 'Key' to Downtown L the cimLurt'E Znd IF A "City hall is not on Main Street Main Street is Citv Hall" connecting to the lake 75 The 'Key' to Downtown R Ber M 5-Wi; 0 PIR OR L W, T40 c :eg j Foe, 10 iv proposed -A I r f `6aK8 S s - 2nd Floor m f Z� t, � W IM, Mi. �M NO �A- W A Proposed Land Uses - 3rd�Floo 76 S'; CIO gn 4 4 11 t 'C -f C CC C4G C, �q IM c c C', C, f. O.El a C, d Ga downtown master plan draft 04-30-09 LAU , ��- -In If > v � � rte.: t.. -.,• _ - P 1 J 1 oil, N SM M" , i i 3 F_i • .. �. M" , i Revised Draft Report The 15corunnicsnfLim(11 <e Lake Elsinore Downtown Master Plan Market Study Prepared for: City of Lake Elsinore Prepared by: Economic & Planning Systems, Inc. March 19, 2009 Economic & Planning Systems, Inc. 2150 River Plaza Dive, Suite 400 Sacramento, CA 95833 -3883 916 649 8010 tel 916 649 2070 fax Berkeley EPS #18103 ' Sacramento Denver Ww .epsys.mm Table of Contents 1. EXECUTIVE SUMMARY ............................................................. ............................... 1 Introduction............................................................................... ..............................1 Summaryof Findings .................................................................. ..............................1 2. DEMOGRAPHIC AND ECONOMIC ASSESSMENT.- ............................... ........................... 10 Regional and Local Socioeconomic Context ........................................... I ........... .......... 10 Socioeconomic Conclusions... ................................................................................... 33 3. HOUSING MARKET ASSESSMENT ............................................... ............................... 35 Regional and Local Housing Trends ............................................ ............................... 35 Downtown Market Conditions .....................:................................ .............................48 HousingDemand Estimates... ................................................................................... 50 Housing Market Conclusions .......................................................... .....................:.....53,. 4. RETAIL MARKET ASSESSMENT ..................................................... ............................54. Regional Retail Market Conditions .............................................. ............................... 54 Local Retail Market Conditions.. ........................................................................ * ....... 55 Downtown Retail Market Conditions ........................................... ............................... 58 Retail Market Conclusions ......................................................... ............................... 64 S. OFFICE MARKET ASSESSMENT .................................................. ............................... 67 Regional Office Market Conditions .............................................. ............................... 67 Local and Downtown Office Market Conditions ............................... .............................69 Office Market Conclusions ...:....................................................... .............................71 6. HOTEL MARKET ASSESSMENT .................................................. ............................... 74 RegionalHotel Trends ........................... .................................................................. .74 LakeElsinore Hotel Market .......................... ................................................... .... ...... 78 Hotel Market Conclusions ............................................................ .............................83 7. FINANCIAL FEASIBILITY ANALYSIS ................. Pro Forma Analysis ........... ............................... Assumptions and Calculations ......................... Feasibility Findings.......... - 8. CASE STUDIES .............. ............................... Business Improvement Districts ................ Downtown Parking Strategies ................... ................ ............................... Mechanisms for Incentivizing Standard Hours of Operation ............................ ............... 106 ...........- lil List of Tables Table II -1 Population and Household Growth Trends ...................... ............................... 15 Table II -2 Population, Household, and Employment Projections ....... ............................... 16 Table II -3 Trends in Households and Population - Cities .................. ............................... 18 Table II -4 Trends in Households and Population - Regional ............. ............................... 19 Table II -5 Trends in Households and Population - Downtown Lake Elsinore ...................... 21 Table II -6 Household Income and Education Distribution Trends - 42 Table III -7 Cities........................................................................ ............................... 22 Table II -7 Household Income and Education Distribution Trends - 45 Table III -9 Regional.................................................................... ............................... 23 Table II -8 Household Income and Education Distribution Trends - 51 Table III -11 DowntownLake Elsinore ................................................ .............................25 -- ......... ...52 Table II -9 Riverside County Jobs by Industry ................................ ............................... 27 Table II -10 City of Lake Elsinore and Downtown Jobs by Industry ...... ............................... 29 Table II -11 Downtown Lake Elsinore Businesses .............................. ............................... 30 Table II -12 Taxable Sales ($1,000s) 2000 -2007 ............................... .............................31 Table II -13 Violent and Property Crime per 1,000 Residents ............. ............................... 32 Table II -14 Summary of School District Performance for 2007 -08 School Year ...................34 Table III -1 Housing Sales Trend Summary (1998 -2008) .................. ............................... 36 Table III -2 Housing Unit Sales for New Housing Units ( 1998 - 2008) ... ............................... 37 Table II1 -3 Median Sales Pricing for New Housing Units ( 1998 - 2008) . ............................... 39 Table III -4 Housing Unit Sales for Existing Housing Units ( 1998 - 2008) .............................40 Table III -5 Median Sales Pricing for Existing Housing Units ( 1998 - 2008 ) ...........................41 Table III -6 Housing Trends - Cities ................................................ ............................... 42 Table III -7 Housing Trends - Regional ........................................... ............................... 43 Table III -8 Proposed Residential Projects (2 pages) ......................... ............................... 45 Table III -9 Multifamily Rental Projects in Lake Elsinore ...................... .............................49 Table III -10 Projected Residential Demand Downtown, 2008 - 2035 ..... ............................... 51 Table III -11 Lake Elsinore Housing Demand Estimates by Product Type .............. -- ......... ...52 Table IV -1 Inland Empire Retail Market Indicators.. Table IV -2 - - - --- . . .............................. Proposed Commercial Projects 56 ............... ... .................................. Table IV -3 Current and Future Downtown Retail Support ......................... ... ............ .. 59 Table V -1 Inland Empire Office Indicators .............................................. Table V -2 . ................ Current and Future Downtown Office Su _ 68 Table VI -1 Hotels Located Within 25 Miles of City of Lake Elsinore (2 pages) Table VI -2 ..................... Hotels Located in City of Lake Elsinore ......................... 76 Table VI -3 .. ............................... Performance Indicators for Hotels - Midscale Hotels ........... 79 Table VI -4 Performance Indicators for Hotels - Upscale Hotels ............... ......................... 82 Table VII -1 Pro Forma Feasibility Analysis Summary .................. Table VII -2 Single -Use Pro Formas (2 pages) ....... ............................... . Table VII -3 Mixed -Use Pro Formas (2 pages) 92 List of Figures Figure II -1 Unemployment Trends, 2000-2008. ............ Figure III -1 Trends in Lake Elsinore Apartment Rent and Occupancy Levels ............. List of Maps Map II -1 Lake Elsinore and Regional Context ... .............. ............................. Ma II -2 Lake Elsinore ................ it Downtown Master Plan District Boundaries ................ Ma IV -1 ................ 14 P Existing Uses in Downtown Master Plan (includes Vacant Parcels) ............. ...... 61 EXECUTIVE SUMMARY Introduction The City of Lake Elsinore (City) retained Economic & Planning Systems, Inc., (EPS), in conjunction with Cooper Carry, a planning and urban design firm, to prepare a market analysis to support the preparation of a City Downtown Master Plan (Master Plan). This analysis evaluates the market potential for constructing residential, retail, office, and hotel land uses within the City's Downtown Master Plan boundary. EPS has utilized the key findings derived in this market analysis to evaluate the financial feasibility of building prototypes as selected by the City and consultant team of Cooper Carry and EPS. In addition, EPS utilized a case study methodology to evaluate key strategies the City could employ to revitalize the Downtown. Summary of Findings This market study, which examined the market potential of residential, retail, office, and hotel development within the City Master Plan boundary, resulted in the following conclusions regarding potential real estate absorption in Downtown Lake Elsinore within 5 years and through year 2035: Land Use Demand through 2093 Demand through 2035 Residential 120 - 200 units 790 - 1,470 units Retail 9,000 - 13,000 square feet 63,000 - 95,000 square feet Office 12,000 square feet 80,000 square feet Hotel 40 - 80 rooms 150 - 300 rooms Other key findings are described as follows. Socioeconomic Assessment The City of Lake Elsinore is positioned to capture a substantial portion of future population growth in the greater region. Riverside County is projected to add 1.5 million new residents by 2035 translating into an average annual growth rate of 2.1 percent. Comparatively, the City is estimated to grow at a faster pace (2.5 percent annually), nearly doubling their current population by 2035 with a total population of over 90,000 residents. If the Downtown Master Plan market area (approximately equivalent to a 'h -mile radius surrounding a central point in the Historic District) grows at its historical growth rate (1990- 2008), there is potential to add as many as 4,800 residents to Downtown by 2035. • Employment growth in the City is expected to increase significantly. Although employment growth is not anticipated to grow at the same pace as population growth over the next thirty years, the City is projected to add over 6,000 new jobs increasing the current Economic & Planning Systems, Inc. - 1 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 7,9, 2009 estimate of 13,000 jobs to 19,000 jobs by 2035. The Downtown market area may absorb as many as 570 of these new jobs. Substantial population and employment growth suggests continued demand for residential, retail, office, and hotel uses. The population growth of the City and downtown, coupled with trends reflecting substantial increases in household income, indicate strong demand for retail and hospitality space to meet the retail and services needs of the expanding and increasingly wealthy population. Future retail and office space in Downtown will primarily accommodate the local Population. The topography surrounding the City and existing urban development patterns indicate future retail development will likely cater primarily to the local population rather than a regional market. Similarly, estimated future employment growth in the City and Projections of jobs by industry indicate there will be demand for new office space, which is also anticipated to primarily serve the local population. Comparatively low incomes and educational attainment of the current Downtown Population may have an influence on future retail and office businesses in Downtown. The relatively lower household incomes of residents living in downtown may place constraints on price points for housing and retail merchandise. Further, with approximately one -half of the adult population without a high school education, employment opportunities for residents of downtown may be concentrated in labor and service- oriented industries. It is important to note, however, that demand for housing, retail, and employment opportunities in downtown will certainly draw from beyond the current downtown population. Housing Market Assessment Lake Elsinore can capitalize on its affordability. With 2008 median new home prices at $331,000 and $237,000 for single - family and multifamily homes respectively, the City offers the most affordable new in the region. Furthermore, its existing home median prices of $233,000 for single - family and $132,500 for multifamily homes during 2008 is also among the lowest in the region. These price points should be equally attractive to potential residents, as well as private developers who may want to participate in redeveloping Downtown. Master Plan concept enables multiple community advantages. lake Elsinore has an opportunity to use the Downtown Master Plan concept as a proactive base to redevelop and revitalize its central core into residential and commercial activity areas. Mixed use development with residential units situated over retail or other commercial spaces help extend the size of these activity areas, while also extending the duration of daily activity to minimize reduction in activity after standard business hours. Furthermore, the concept aligns the residential uses with nearby retail to support these homes. This alignment and Proximity of new- housing nodes to recreational and civic uses will be attractive to potential residents. To fully capitalize on these advantages, the release of Downtown residential units should be phased considering residential housing demand, but also timed with development Economic & Planning Systems, lnc. Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 of immediately nearby recreational, civic uses, and streetscaping to maximize potential buyer's vision of Downtown. Mixed use development facilitates increasing housing- density trend. An increasing trend in attached housing product absorption in the market, as well as in the number of attached developments proposed with the City's Planning, indicate developers are increasingly gravitating towards this product in Lake Elsinore. Rental housing may provide additional opportunities for Downtown development. Lake Elsinore's apartment- rental market has seen very high historic occupancy rates. The City had a very tight 99 percent occupancy level in 2000, but eased to a more "normal" or equilibrium state in 2008 with a 92 percent occupancy level. While occupancy rates eased during 2007 because of the absorption of 154 new rental units, there may be a future opportunity for a. market -rate complex located Downtown. As home prices and rent values increase in Downtown from redevelopment and growth, a market -rate apartment project may be necessary to provide affordable housing options to residents. This may be important for the City, whose median household income is lower than comparative cities in the region. Downtown is projected to absorb approximately 120 to 200 units by 2013 (representing average annual absorption of 25 to 40 units) and 790 to 1,470 residential units over a buildout period of 27 years (by 2035), representing an average annual absorption of 30 to 55 units. The City has experienced rapid demographic growth over the past 18 years. Current projections estimate an additional 14,700 housing units for Lake Elsinore between 2008 and 2035. By 2013, the Downtown area is projected to capture approximately 120 to 200 of these new homes, or a rate of 24 to 40 new Downtown homes per year. By 2035, the Downtown area is projected to capture approximately 790 to 1,470 of these new homes or a rate of 30 to 55 new Downtown homes per year by 2035. Retail Market Assessment The City of Lake Elsinore has a significant amount of potential to attract and retain retail tenants in downtown. Within the Downtown Master Plan boundary, the Historic District features solid elements of a thriving downtown. Its narrow, tree -lined Main Street, and pedestrian - friendly urban design aesthetic offer a canvas for revitalization, with a focus on connectivity between other draft Downtown Master Plan districts, the lakefront, and other proximate amenities (e.g., the Lake Elsinore Storm Class A baseball stadium). As the commercial core of the City's downtown, the Historic District should capitalize on its unique charm as an authentic 'Main Street." Urban design guidelines imposed by the City in the Downtown Master Plan and in particular the Historic District should complement the existing style of architecture, street furniture (e.g., benches), and landscaping, though strict adherence to past architectural styles and materials is not recommended. • Demand is projected to accommodate additional retail space within the Downtown Master Plan boundary in the short and long term. Based on future population growth in the City and downtown, demand is projected to accommodate approximately 9,000 to Economic & Planning Systems, Inc. 3 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19. 2009 13,000 square feet of retail space by 2013 and between 63,000 to 95,000 square feet of retail space by 2035. Several factors could result in additional demand for downtown retail space beyond what is estimated in this study. Demand for additional retail space could be achieved through higher growth in population and retail spending power than what is estimated in this study. Tenants unique to the City or region may improve the ability of the downtown to compete with proximate jurisdictions and competitor markets (e.g., Temecula, Murrieta) and capture additional consumers locally and regionally. In addition, the development of a boutique hotel in the Waterfront District and a high -speed rail station at the Main Street exit of I -15 would both contribute to demand for retail space Downtown. The Historic District presents opportunities for enhanced retaif offerings. Currently, there is a concentration of jobs and individual businesses in food- related tenants (both food stores and eating and drinking establishments). Capitalizing on the success of these two businesses, the Historic District might be well -served by additional, similar food - related tenants, creating a niche of mid- to upscale, quality dining options that attracts additional local, as well as regional demand. At least in the short term, it is anticipated that retail development will be locally serving and cater to the current and future residential population in Downtown and throughout the City. Retail development will likely be primarily local- serving, providing everyday goods and services required by local residents. New retail and service commercial development in the Downtown area could include tenants found along thriving "Main Streets" in other communities, such as: toy stores; book stores; drug stores; bath and body stores; and dry cleaners. Mixed use projects combining ground -floor retail and upper -story residential and office uses are an appropriate land use in downtown over the long term. Although mixed use projects are an untested prototype in the City, this type of development is gaining traction in the region and is highly appropriate for downtown, specifically in the Garden and Historic Districts. Given that current lease rates for retail development Downtown are low relative to retail lease rates in the region, it will be important to evaluate the financial feasibility of such a product to determine if achievable rents exceed the cost to construct this type of development. Creation of a business improvement district may be a useful strategy to address challenges currently facing downtown. A business (or property) improvement district improvement district is a financing mechanism in which business or property owners pay an annual assessment in return for enhanced municipal services such as public safety and ongoing maintenance (e.g., graffiti abatement, litter removal). In addition, an improvement district could facilitate the creation of marketing and public relations materials that present a unifying vision for downtown retailers and events. Further feasibility analysis is required, however, to determine if the additional operational cost would be a financial burden that businesses downtown would be able to bear. As in many communities, the current parking supply in Downtown Lake Elsinore is perceived to hinder the success of the retail. Store owners and customers both prefer Economic & Planning systems, inc. 4 Cake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19. 2009 that parking be ample, free, and near their destinations. However, it is difficult to achieve a thriving pedestrian environment and attractive "Main Street" aesthetic with parking as a primary and visible land use, and many successful commercial districts have provided parking lots and garages off -site, along with clear way - finding measures. The inconsistency of current retail operator's hours of business detracts from the sense that Downtown Lake Elsinore is a vital destination. Many retailers Downtown do not hold consistent hours of operation, making it difficult for one retailer to capitalize on foot - traffic generated by another, as is achieved in standardized shopping centers. As properties or businesses turn over, it may be beneficial for Downtown landlords to encourage consistent operating hours through their retail lease agreements. Office Market Assessment Office development in the regional market is in low demand at the present time. The general economic downturn is reflected in high unemployment rates and high office vacancy rates regionally and locally, indicating weak prospects for leasing newly developed office space in the immediate future. However, the economy is expected to recover within a few years, and the population and labor force will continue to grow, contributing to continuing demand for office space in future years. Demand is projected to accommodate additional office space within the Downtown Master Plan boundary in the short and long term. This analysis estimates demand for approximately 12,000 square feet office space by 2013 and approximately 80,000 square feet of office space by 2035. An additional 50,000 to 100,000 square feet may be demanded beyond what is estimated in this study if additional employment growth occurs or a high- speed train station is constructed, increasing the surrounding pool of labor, which would have convenient access to office development in the Gateway District. Office space is likely to be most highly demanded by locally serving businesses. Lake Elsinore is not a major regional employment center, and is unlikely to be so in the future. However, with continued growth of the local population and demand for professional, business, and personal services will drive demand for additional office space. While it is possible that a regional headquarters may seek a location in Lake Elsinore - particularly if high speed rail service is provided - most office space is likely to be occupied by smaller companies in multiple- tenant space. .Hotel Market Assessment Current hotel market conditions, driven by the economic downturn, suggest that hotel development in the regional Lake Elsinore market may not be feasible for several years. In Western Riverside County, Southern Orange County, and Northern San Diego County, the combination of declining occupancy, slowed room rate growth, and increasing hotel surplus over the last two years is a direct result of the economic downturn's impacts on the hotel industry as a whole. Based on these performance indicators, additional hotel development at this time is not recommended. Economic & Planning Systems, Inc. 5 w.�w= .•�,..�.•�«.N,w��•��� ^_+ +�^a take Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 It is anticipated that hotel development in the regional market could be feasible as early as 2010. National hotel markets are anticipated to see positive performance indicators as early as 2010. In the regional Lake Elsinore hotel market, if hotel supply growth does not continue to increase, it is likely opportunities for hotel development will exist once the economy improves and demand for hotel rooms reverses the current declining trends. Demand is likely to exist for new hotel development in Downtown Lake Elsinore. If future hotel growth in Lake Elsinore occurs merely in proportion to projected population and job growth, it could be expected that Lake Elsinore's current supply of roughly 420 rooms could increase by an additional 50 hotel rooms through 2013 and 200 to 400 hotel rooms in the City through 2035 (roughly 50 percent growth based on jobs, and 100 percent growth based on population). Accounting for the potential replacement of older hotel properties, another 100 to 200 new rooms might be added, bringing the total demand for new rooms to 300 to 600 through 2035. To the extent that Downtown's image and amenities improve, it is possible that half or more of these additional hotel rooms could be accommodated in Downtown (40 to 80 rooms by 2013 and 150 to 300 rooms by 2035). The greatest opportunity for hotel development regionally will be in the upscale hotel market. The significant growth in demand through 2006, coupled with slower growth in supply, and a decline in the surplus of hotels in this market are the strongest indicators that future upscale hotel development is feasible in the regional market. However, Downtown Lake Elsinore has several current issues to address before it can effectively compete for upscale hotel business, including perceptions of crime and poverty, limited recreational and retail amenities, and a limited number of thriving businesses downtown. Opportunity for midscale hotel development also exists in the region. Historically strong performance in the region also indicates potential will exist for midscale hotel development once the economy improves. In Lake Elsinore, new and revitalized Downtown businesses, attracting local and regional clients and customers, would contribute to a future increase in demand for midscale hotel accommodations. The Waterfront District is an ideal location for future upscale hotel development. Characteristics of the Waterfront District that position it as a key hotel development site include the proximity to the Lake, the downtown, the Lake Elsinore Storm baseball stadium, and future recreation space. A unique opportunity exists for Lake Elsinore to develop and market its historic hot springs community. Reclaiming the City's historic hot springs reputation through the development of other spas and resorts would contribute to the redevelopment of downtown and growth in tourism, visitor spending and demand for hotel lodgings. Financial Feasibility Findings • The current economic conditions make it very difficult to develop real estate. As in much of the country, Lake Elsinore is currently suffering from high foreclosure rates, a lack of credit for developers and prospective homebuyers, and increasing unemployment. These conditions have caused many prospective projects to be put on hold, as the developers and Economic &Planning Systems, Inc. 6 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 investors do not anticipate profitability in the near term. These broad conditions, combined with the generally low price points found around Downtown Lake Elsinore, pose major challenges to development feasibility in the near term. • Both single -use residential development prototypes may be feasible in the medium - term. To achieve feasibility, garden townhomes require a pricing level that is approximately 70 percent greater than comparable condominiums in the City and 15-40 percent greater than comparable condominiums in nearby Temecula. Prototypical apartments require rents approximately 40 to 50 percent greater than recently- constructed apartments in the City. It must be noted, however, that the residential market has borne unprecedented declines in recent years, with the median prices of new and existing homes in Lake Elsinore falling 30 to 40 percent between 2006 and 2008. The eventual recovery of the housing market will significantly close the feasibility gap for these projects, and they should be supportable in the mid -term (five -plus years). Both single -use office development prototypes are currently infeasible, and face significant future challenges. This analysis indicates that both the three -story and six - story office development prototypes are financially infeasible under current market conditions. The required lease rate for Class A three -story office with surface parking is approximately 20 percent higher than the lease rate for the newest office space constructed in the City as well as Class A office space within the South (Riverside) County submarket in which the City is included. A general economic recovery will close some of the feasibility gap for low -rise office space in Downtown Lake Elsinore in the mid -term (five -plus years). The threshold value for Class A six -story office with structured parking even more greatly exceeds the lease rate for the newest office space constructed in the City or proximate cities or submarkets. Indeed, real estate brokers contacted in conjunction with this analysis indicated that this particular prototype is not financially feasible, and thus, not being constructed anywhere in the Inland Empire. Unless a high -speed rail station is constructed nearby, EPS considers this taller office prototype to be only a long -term prospect for feasibility in Downtown Lake Elsinore (ten -plus years), after significant improvements are made to the area's desirability. • The residential mixed -use and commercial mixed -use development may he feasible in the medium -term. The podium parking component for both represents a significant cost that is one of the factors increasing the threshold values of these development prototypes. The eventual housing market recovery will improve the feasibility of mixed -use development with housing in the mid -term. While the feasibility of the overall projects for "residential mixed -use" and "commercial mixed use" prototypes are largely driven by the feasibility of their housing components, it is worth noting that the ground -floor commercial (office or retail) space incorporated into the mixed -use developments also appears to require higher lease rates than the market can currently bear. A mixed -use prototype including a mid -scale or up -scale /resort hotel with ground - floor retail may be feasible in the medium -term. A mid -scale hotel prototype is estimated to require an average daily room rate of $135, comparable to the prices currently achieved during the peak season, but above the average annual room rate being achieved currently. EPS concludes that it is likely that a mid -scale hotel's ability to achieve an annual Economic & Planning Systems, Inc. 7 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 average daily room rate of $135 could occur in the medium -term (e-g., 5 -7 years). With the addition of a structured parking facility and higher construction costs, the threshold values of an up -scale /resort hotel and accompanying ground -floor retail are significantly higher than the first prototype but may be achievable also in the medium -term, especially if the City forms a partnership with private development to help fund this type of use. Assumptions related to land costs and the type of parking can contribute to a lack of financial feasibility for development in the Downtown Master Plan. Potential solutions to increasing project feasibility include: providing parcels the City owns outright to private development at no cost; reducing the number of parking spaces for each land use type; developing shared parking requirements; or obtaining governmental funding to construct centrally - located structured parking. Over time, as the general economy and Lake Elsinore's marketability improve, many of the currently infeasible prototypes are likely to become feasible_ In addition to improvements in the regional and national employment, real estate, and credit markets, improvement of the overall image of Lake Elsinore through proposed infrastructure, streetscape, signage, and parking investments are likely to increase achievable prices in the Downtown Master Plan, reaching the threshold pricing levels required for construction. Case Study Findings The city could establish an assessment district through a Business Improvement District (BID) to provide supplemental public safety, maintenance, and marketing services and fund capital improvements in Downtown. Capitalizing on the established structure of the DMA and coordinating with the City as part of the implementation of the Downtown Master Plan, a BID could be formed to provide enhanced municipal services such as public safety and ongoing maintenance (e.g., graffiti abatement, titter removal). A BID could also facilitate the creation of marketing and public relations materials that present a unifying vision for downtown retailers and events. In addition, BID assessment revenue could fund the construction of capital improvements such as streetscape improvements and parking facilities. As a long -term strategy, the City could establish a parking district as a mechanism for providing and funding parking to serve Downtown. If a BID is established but does not include funding the construction of parking facilities, in the short term, the additional assessment associated with a parking district may not be financially feasible for businesses or Properties within the district. Rather, in the short term, the City could utilize a portion of the numerous vacant parcels currently in its ownership for the provision of parking. In the longer term, as the number of businesses and civic amenities in the Downtown increase and result in a requirement for additional parking capacity, a parking district could be viable strategy for Downtown. The City could implement voluntary or mandatory programs to incentivize businesses to operate according to a consistent schedule. The City could establish a business improvement district, and through this mechanism offer financial incentives (e.g.,. assessment waiver) in exchange for the merchant to agree to operate according to a Economic a Planning Systems, Inc. •:v�.im okm,,. w.�.,.,..w- s.wuw..v.�e, m.v.,w� Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 standardized schedule. For the vacant parcels currently within City ownership, the City might choose to retain ownership and administer a master lease agreement which specifies days and hours of operation. While not every business may be incentivized through any programs the City may choose to implement, it will be important for the City to target current and future key businesses that have the ability to attract the largest number of patrons during a wide range of business hours, including weekday evenings and weekends. Economic &Planning Systems, Inc. y Pvow•�W �..�• a. ,..,,.a•„w+••�u��•� >+a•• >�•w°= 2. DEMOGRAPHIC AND ECONOMIC ASSESSMENT This chapter presents a summary, of demographic and economic trends and projections to establish a socioeconomic context for future development in downtown Lake Elsinore. The evaluation of demographic and economic trends and projections is focused on the geographies of the Downtown Master Plan boundary; the City of Lake Elsinore; the proximate jurisdictions and competitive markets Of Corona, Temecula, and Murrieta; Western Riverside County and Southern California as a whole. Following this chapter, subsequent chapters will address detailed market trends pertinent to the aforementioned geographies to assess the market potential for developing residential, retail, office, and hotel land uses in the Downtown Master Plan. Regional and Local Socioeconomic Context Location The City of Lake Elsinore (City), which surrounds a 3,300 -acre natural lake that formed at the base of the Ortega Mountain Range, is located in western Riverside County (County) along the Interstate -15 (I -15) corridor. To the north is the core of the region termed the Inland Empire, which comprises the urbanized, western portions of Riverside and San Bernardino counties (generally, the cities of Ontario, San Bernardino and Riverside). The Inland Empire metropolitan statistical area (MSA) does include the City and, as of July 2007, represents the 14u' largest and one of the fastest growing MSAs in the United States.' The City is often referred to in combination with the cities of Murrieta and Temecula in the southern portion of western Riverside County. Along the I -15 corridor, the City is situated approximately 20 miles south of the City of Corona and the core of the Inland Empire and 12 and 20 miles north of Murrieta and Temecula, respectively, a burgeoning area for wine production. Refer to Map I I -1 for the location of the City in relation to cities in western Riverside County. In the context of the larger region, the City is located about 75 miles north of San Diego and 75 miles southeast of Los Angeles. Downtown Master Plan Study Area - The Downtown Master Plan currently being prepared defines the City's downtown as an approximately three -block wide corridor that abuts I -15 to the north and the lakefront on the south and whose central artery is Main Street. Cooper Carry's Draft Downtown Master Plan concept envisions a linear series of districts, described as follows: 1 Riverside -San Bernardino- Ontario Metropolitan Statistical Area, United States Census Bureau. Economic a v�anning Systems, Inc. take Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 • Gateway District. This area is composed- of the blocks immediately adjacent to Main Street's interchange with I -1S. The Draft Downtown Master Plan anticipates Class A office buildings in the area, as well as retail space to serve these offices. A parking structure is also planned in the Gateway District to accommodate the high volume of cars that will accompany the office uses. It is noteworthy to mention the potential of a high -speed train station located at Main Street's interchange with I -15. At the time of this report, the likelihood of a high -speed train station located adjacent to the Gateway District is unknown. However, this analysis takes into consideration the potential impacts a high -speed train station might have on the City's downtown. - • Garden District. Just south of the Gateway District, the Garden District envisions residential uses to supplement small office users along Main Street. Main Street frontage is planned to consist of multifamily housing units over office uses on the ground floor. Development for larger office and warehouse uses is also anticipated to occur between Spring Street and the creek. • Cultural District. Just north of the Historic District, the Draft Downtown Master Plan recommends diverting Main Street around a circle containing a new public library and museum, and the historic Armory building. The Cultural District also anticipates a performing arts center, which is supplemented by mixed use retail and residential. The entire District would be served by a single parking structure. Historic District. The heart of downtown Lake Elsinore comprises the three -block stretch of Main Street spanning from Heald Avenue to Prospect Street defined as the Historic District. The Historic District also includes . the cross streets within the three -block stretch bounded between the canal to the west and Chestnut Street on the East. The primary intent of the Historic District is to preserve the existing architectural design and function as the downtown commercial core. • Waterfront District. The Draft Downtown Master Plan envisions significant new investment by the waterfront, including the City Hall and the Civic Center. The District plans to include other government offices and council chambers, a town square, retail space, restaurants, and mixed use development with residential above retail. The Downtown Master Plan envisions a resort hotel adjacent to a new pier on the lake side of Lakeshore Drive, which offers easy access to the attractions of the new Waterfront. A waterfront park is also anticipated in the District, which will feature a variety of active uses and programmed space. The Main Street will terminate on a new pier which will feature shops and a restaurant, as well as stands for temporary use by farmers markets, etc. Refer to Map 11-2 for the precise boundaries of the Draft Downtown Master Plan, Demographic Trends Population and Household Growth Lake Elsinore is a fast growing city in a rapidly growing region. As Table tl -1 illustrates, during the 10 -year period between the 1990 and 2000 Census, the City's overall population grew by almost 60 percent. This growth rate is higher than Riverside County which added to its Economic &Planning Systems, Inc. 1Z Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 population by one third during the same time period. While the City's population growth during the 1990's was astounding, the City did not grow as rapidly as the comparable cities in Riverside County of Temecula, Murrieta, and Corona (also shown in Table 11 -1). Since 2000, Lake Elsinore has continued and even accelerated its rapid growth, increasing its population by an additional 63 percent over 8 years while the County overall grew by 33 percent. Household formation throughout the region was not as rapid as population growth, with the exception of Murrieta which formed new households during the 1990's at approximately the same rate as its population grew_ It can be inferred, therefore, that the average household expanded in number of residents. The number of persons per household in Lake Elsinore was 3.0 in 1990 and increased to 3.3 in 2000. As displayed in Table I I -2, persons per household in the City have continued to increase and the number is estimated at approximately 3.4 in 2008. Persons per household numbers are expected to decline slightly after 2008, reversing or stabilizing after the 1990 to 2008 trend of larger household sizes. As depicted in Table 11-1, the Downtown market area (roughly equivalent to a '/2 mile radius surrounding the intersection of Main Street and Peck Street) experienced a decline in households from 1990 to 2000 but an 11 .percent increase in population. During that 10 -year period, persons per household increased around downtown from 2.9 to 3.3, a 15- percent increase. The one -mile radius and 2 -mile radius each experienced a similar trend in increased persons per household, but it is worth noting that there appears to be a relation between proximity to downtown and increased household size. Table 11 -2 presents projection data relating to population, household, and employment. The City's average annual growth rate is expected to decline from 4.7 percent from 1490 to 2000 down to 2.5 percent from 2008 to 2035. At this growth rate, however, the City's population is expected to nearly double in size from 47,246 estimated in 2008 to 92,438 in 2035. Projection data indicate that the City is expected to grow more rapidly than the neighboring jurisdictions of Corona, Temecula, and Murrieta as well the larger region. While Riverside County is projected to incur a 75- percent increase in population during the 27 -year period (2008- 2035), Lake Elsinore is projected to experience a 96- percent increase in population during the same period. The City's employment growth projected from 2008 to 2035, is expected to be significant throughout the region, but in the case of Lake Elsinore, is not expected to increase at the same rate as population growth. Of the jurisdictions listed in Table 11 -2, Lake Elsinore is the only jurisdiction which is projected to experience an average annual population growth rate which is higher than its average annual employment growth rate. In 2008, the number of estimated jobs (i.e., employment) per household in Lake Elsinore was .93. That ratio is expected to decline over the 27 year period to .67, exacerbating the imbalance between housing and jobs in the City. The comparable cities of Temecula, Murrieta, and Corona are all expected to see their jobs /housing balances improve over that time period. Economic & Planning Systems, Inc. 13 Fs� I I •M Y DRAFT Table 11 -1 Lake Elsinore. Downtown Market Study Population and Household Growth Trends (1990 -2008) - Area 1990 2000 2008 Change, 1990 -2008 Percent Change Avg_ Total 18 -Yr Annual Population Lake Elsinore - 18,285 28,928 47,246 28,961 158.49/6 5.4% Downtown Lake Elsinore [1] 112 -Mile Radius 2,976 3,307 4,733 1,757 59.0% 2.60/6 1 -Mile Radius 5,340 5,994. 8,900 3,560 66.7 %, 2.9% 2-Mile Radius 6,737 8,077. 12,914 6,177 NY% 3.7% Temecula 27,099 57,716 95,153 68,054 2511% 7.2% Murrieta (2] NIA 44,282- - 93,023 NIA NIA NIA Corona 76,095 - 124,966 147,716 71,621 94.1% 3.8% Riverside County 1,170,413 - 1,545,387 2,055,235 884,822 75.6% 3.2% - Southern California 17,138,848 19,329,839 18,665,686 1,526,838 8.9% 0.5% Households Lake Elsinore 6,066 8,817 14,004 7,938 130.9% 4.8 %, Downtown Lake Elsinore [1] - 1/2 -Mile Radius 1,041 1,004 1,401 360 34.6 % 1.7% 1 -Mile Radius 1,860 1,894 2,754 894 48.1% 2.2% 2 -Mile Radius 2,337 2,582 4,046 1,709 .73.1% 3.1% Temecula 9,130 - 18,293 29,145 20,015 2192%. 6.7 %- Mumeta [2] N/A 14,320 29,945 � NIA -N /A NIA Corona 23,920 37,839 43,372 19.452 81.3% 3.4% Riverside County - 402,067 506,218 654,028 251,961 62.7% 2.7% Southern California 5,820,965 6,381,168 5,862,972 - 42,007 0.70% 0.0 % _. pop• Source: Census (1990 and 2000), Clarilas, Southern California Association of Governments (SLAG), and EPS. [1] Radii are drawn from the intersection of Main St. and Peck St. in downtown, a central location in the Historic District. - [2] Murrieta officially incorporated as a city in 1991. Data for 1990 is unavailable for Murrieta's current boundary. - - - Prepared by EPS 1/232009 rumm�isrmui«em., s„neas,M'+��+'r,mmmawinm..¢ 15 Table 112 Lake Elsinore Downtown Market &ad, Population, Household, and Employment Projections (2008 -2035) D RAFT Change 20DB -2035 Percent Change Area [1) 2008 2013 2018 2025 2035 Avg, Total 27 Yr Annual Population Lake Elsinore Downtown Lake Elsinore j2] 47,246 54,357 62,539 78,044 92,438 45,192 95.]% 2.5% 1l2 -Mil. Radms t -Mile Radius 4,733 8,900 5,384 6,125 7,336 9,493 4,760 100.6% 2.6% 2 -Mile Radius 12,914 10,257 15,4]2 11,821 14,418 19,150 70,250 115.2% 2Radius Temecula 95,153 99,957 18538 110.305 23,876 34,273 21,359 165.4% 3.7% Munieta 93,023 98,602 111,053 117,800 119,689 124,146 127,962 28.993 30.5% t0% Co.. 147,716 151.262 158,610 161,749 167,900 34,939 20,184 376% t.2% Westem Riverside County [31 7,585,010 1,731,018 2,064,622 2,262,989 2,560,865 13.7% 0.5% Riverside County Soulhem California l41 2,055,235 2,279,654 2.804,683 3,089,999 3,596,600 965,855 1,591,445 75.0% 18,665,686 19,563,739 21,491,549 22,395,124 24,057,292 5,391.606 28.9% 284, Heuseholtls 0.9% Lake Elsinore Downtown Lake Elsinore [2] 14,004 16,238 18,828 23,690 28,662 14,658 104.] ° /. 2.7% 12 -Mile Redbs I-Mile Radius 1,401 1,521 1,652 1,855 2,187 786 56.1% 2 -Moe Radius 2.754 4,046 3,0]1 3,425 3,990 4,962 2,208 80.2% 1.7% 2.2% Temecula 29,145 4,712 30 5,488 6,794 9,217 121.8% 31% Marlow 29,945 ,694 31,066 34,044 36,086 36,459 39,078 38,550 %405 9,405 32.3% 1.0% Corona 43,372 44,939 96,653 47575 41,095 49,456 11,950 39.9% 1.3% Western Riverside County [3] 494,710 543,747 658.479 6,004 14.0% 0.5% Riverside County 654,028 729,906 909,096 727,620 8WMS �'� 67.7% t9% Southern Califomia[4) 5,862,972 61168,089 6,826,783 1,008,909 7,156,635 1.183.097 80.9% 22% 7,710,716 1 841,]004A9 31.5% 1.0% Persons per Household Lake Elsi ena Downtown Lake Elsinore 337 3.35 3,32 3.27 323 (045) (4A %) (02 %) 12 -Mile Radius 1 -Mile Radius 3.38 3.23 3.54 3.71 3.96 4.34 0.96 28.5% 0.9% 2 -Mile Radius 3.19 3.34 328 3.45 3,61 3.86 0.63 19.4% 0.7% Temecula 3.26 3.26 3.38 3.24 3.51 3.72 0.53 16.5% 0.6% (NUmnta 3.11 3.10 3.08 3.23 3.22 (0'04) (1.4 %) (D.1 %) Corona 3.41 3.40 3.40 3.06 3.05 (0.01) (1A %) (0.1 %) 3.40 3.39 (0.01) (0.3 %) (0.0 %) Western Riverside County [3] 321 340 3.14 Riverside County 3.14 342 3.09 3.11 3.08 (0.13) (4.0 %) Southern California (4) 3.10 3,17 3.15 3.06 3.04 (0.10) (3.3 %) (0.1 %) 3.73 3.12 (0.06) (2.04) (0.1 %) Employment (Jobs) Lake Elsinore Downtown Lake Elswore [5) 13,018 14A06 15,942 16,487 19,297 6,279 482% 1.5% 12 -Mlle Radius 1-Min Radius 1,184 1,310 1,450 1500 1.755 571 482% 1.5% 2-Mile Radius 1.750- 8,869 1,937 %615 2.143 2,216 2,594 844 48.2% 1.5% Temecula 50.151 55,322 10,861 67,318 11,232 13,147 _ 4,278 48.2% 1.5% Mumeta 19,887 21,880 25,695 73,777 27 ,W 85,194 35,043 69.9% 2.0% Comm 67,149 72,957 86,107 90,657 31,540 105,046 11,853 50.6% 1.7% Western Riverside County 131 526.290 37,897 56.4% 71°b Riverside County 702,820 603,095 799.908 791,969 901,763 1,098233 571,943 108.7% 28% Southern California (4] 7,991,947 8,374,454 1,036,173 1,168,769 1A73,522 710,702 1D1.1% 26% 9,195,269 9,548,782 10,287.122 2,295,775 28.7% 0.9% Source: Census 1990, Census 2000. Southern California Association of Governments (SCAG), Claude , and EPS. Pop M [1] Projecfwns for all areas, except for downtown Lake Elsinore are provided by SCAG M iyoW increments. DemogmPhic figures for the City in 2008 are provided by Cla itas. EPS extrapolated projected figures for the City in 2013 and 2018 from 2008 data using the average annual growh rule behveen 2005 and 2035 providad by SCAG. Projected figures for all other areas between 2008 and 2018 are extrapolated from 2005 data using the average annual grooth one between 2005 and 2035 provided by SCAG. 121 Demographic figures for downtown Lake Elsinore in 2008 are provided by Clantes. EPS extrapolated downlowm Lake FainoWs population and households for 2013 to 2035 using the historical average annual growth rate betwean 1990 and 2008 provided by Clanlas. 13) As defined by SCAG, includes the Cities of Banning, Beaumont, Calimese, Canyon Lake, Comma, Hemet. Lake Etswom. Mo. Valley, Manna. Norco, Perris, Riverside, San Jacinto, Temecula and a portion of Unincorporated Riverside County. [4] "dudes the Counties of Imperial, Les Angeles, Orange. Riverside, San Bum udmo, San Diego, and Ventura. 1 51 Assumes Mat the downtown's future percentage share of the Cities employmenl remains constant since 2005. Projected employment figures between 2013 and 2035 is extrapolated by applying the percentage share of the downtown demographic figures In 2008 to the Ciys projected figures. Rq,oedbyE SYtryR0a9 nnMV,rermue 6ay. p.nem cur avµWenw mtwa. n.wm 16 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79. 2009 EPS has projected future the Downtown market area's future population growth based on the historical average annual growth between 1990 and 2008, as shown in Table 11 -2. Using this methodology, downtown Lake Elsinore is projected to experience substantial population growth nearly doubling the population by 2035, adding roughly 4,800 new residents. Given the efforts being made to improve and intensify Downtown, EPS believes this pro rata growth projection is optimistic but achievable. As a key commercial district, Downtown should continue to maintain a strong proportion of citywide jobs overtime. EPS assumes that jobs in the Downtown market area will grow at the same pace as jobs citywide, increasing by nearly 50 percent over the next few decades. Although employment (job) growth is not projected to grow at the same rate as population, downtown is estimated to add a substantial number of new jobs - approximately 570 - by 2035. Population and Household Characteristics Table 11 -3 presents data related to the demographic changes which took place in Lake Elsinore and the comparable cities of Temecula, Murrieta, and Corona from 1990 to 2000. Lake Elsinore and Corona both experienced a high proportionate increase in larger (four persons and above) households in the 1990's. In Lake Elsinore, 55 percent of the household growth that occurred resulted from larger household formation; whereas, in Temecula and Murrieta smaller households were more likely to be formed. Similar to the comparable cities listed, population growth in the 1990's largely resulted from the increase in people under the age of 20 and those aged 35 to 54, presumably resulting from an increase in the number of families in the City. Lake Elsinore did not, however, attract older individuals - those 55 or older - at the same pace as the other jurisdictions. In Murrieta, 18 percent of population growth resulted from older individuals, while in Lake Elsinore only 9 percent of the population growth resulted from increases in that age group. A significant share of the population growth that occurred in the 1990's in Lake Elsinore and Corona resulted from an increase in the Hispanic populations of those cities. The majority (59 percent) of the growth in Lake Elsinore resulted from growth in the Hispanic population. In , 1990, the Hispanic population represented approximately 26 percent of the population and increased, as of 2000, to represent 38 percent of total population. Corona is a diverse city that also saw significant increases in its Asian and African American populations, accounting for a collective 21 percent of that city's growth. Temecula did not experience the same level of increased diversity in the 1990's with the growth being most dramatic in the white population. Table 11 -4 contrasts Lake Elsinore with the larger regions of Riverside County and Southern California, which comprises the counties of Imperial, Los Angeles, Orange, Riverside, San Bernardino, and Ventura. In terms of household size, the trend in Lake Elsinore for larger household sizes was more similar to Southern California than to Riverside County which saw proportionately more growth in smaller households. Economic & Planning Systems. Inc. 17 m� N M O 9 e W Q m0 U `o = a. 'b0 m m s n O U Q n O U °o n W A o N N o U m m C t � U O N m W m � y a a L U m m W U � m U f N N b v N U' (�1 O U ry m O p C W N ry W U m m T ' 9 � N � O N m 0 0 O R d m c 9 sm w 3 b O a � b 0 � O M'C y C N 0 9 G 18 j }a 4 f 3 a ooe omeoe eo >000 ooe z z z z z z z z z z z z z _Q z Q_ z Z Q' z z z z O D z z N QnN rNm nldO d MNO Z Z z z z z MNmm�m OaNm m Nnm `.°-gym mmoo.- omNMn� m m mNM mh'n mdn m Nm on nma�mm vow � m1°M dm Mme d N N V m mom ova�m zzzzz mm m C u�oomvNim u>m q �d0 mW�WN yN 0)mm j W mNN 006 M NNN�Wb N hob CIN� [V .d -O)Vl N N n Vf n N m n 18 j }a 4 f 3 a Qg' QaQQ• QQQQQ• aQ' z z z z z z z z z z z z z _Q z Q_ z Z Q' z z z z z z z z z z z Q Q Q' Z Q Q Q Q' Q Q Q Q Q Q Q Z Z z z z z z z z z z z z N n M 0 W ry N m M N ONIN.TN N O M N M N mNM �YOfNmON nNN � m1°M m1M0 Mme a Q' z zz zzzz zzzzz zQ z 18 j }a 4 f 3 a udiv° n °wni `°o "' co N n M N h N M m M q N M a � m1°M m1M0 Mme a W N V 0_N_ W �CNJ�mb O N m m C M q M N M j N Y nM M m inmm °c i°�mino N�nNhm h.-o m.-o °m °i vi via mnmMN Nd '-N MAN 0m . 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N °q C U m�rc r rmL'_ V1 i9 $E7 m N O O W b M 2 O L O O m 0 i Of- 0 �QO 0 _ a QQ mz{ 18 j }a 4 f 3 a 19 B }B a S 8 8 ro w _ O N OI N q � V m o o`e a a'�a °o a e`e`a °o ae o e c a C w � N m O M n W O Y 10 m y N O ^ m O maw c � a m� w w O m > o �SF3- w Q NZw m paw N w� w C V) d � t_ W Q Q 0 C w m w m O 0 9 J 7 J ry w00 EON o a o 0 0 0 - o e `6 0 0 W v Z Z mm0 Wpaj�" �m'V mQ �Om LLQ U V U o ^ N N w mm U 'v m m U y L D -<O n 0 man m a mGO w 0 W O N P O mMN N r m r MWV m W m O m VJ O_NOmM N MOM mO w- C � O nN0 WON � 1� rm� Vi tO Q p Y{ S- T O U � M N m NMm P Q^ N W W sNP�- m H W m Q f W ADO N W m mv� 6 � - � N ^ M (V mMN.°]M m Om W Cm C m A t ^ M e m O Q W m M m Q N _W NN L O O m 00� ry 0 O mN W 0 m N NOm c6 m O OI ^ W na+lO W O N M 10 P N m O �_ M M Q m Q M W n N M N Q N N Q O m W N A N l m W W� P V mWOQ m P Q N m m WnP n Q Q M [O M m' p O Nm0 O^ ^gym _ V piNMO A N r ^ N a u u o u a o o o a o e o e e L M F O O N m 00 N W N m M O A M O O e o aee aee L N N P N Q 10 N P N M m M U N N V U t m Q O V 10 m n ^ M m N r a 'a y m ^nm or on m �mPr u>Nr p PQ_�mP N W M 00 f0 _ n m ` 00 m � N' _ m O m m N M ' n n WmWWM r P ^oM P M O o ry m m .�n 't o M n Wm Q m rn W n nW hmP m mmQ m N _d_ ^ V N .N- V M N N N � m m •- V W' m mm O o o e a e e e e �e e`e aee o o e fqw o m O P 10 O P m W W ct 17 O (p n N N N O Q P O m O O e c a mnv � pMV� ^mm roMm O 0 y o c o' P Min r mo Q W N nmmv u�mQ C N [p m N m W n N Q b N m m Q o U w m Y c w A m ^n MP Pnm P W m A.- O J p m V f A O N m O A n W m O K W NOM W mMm O47 W (e ^ N N N T C a > O (O m O N N Y] M l0 O W 10 1.0 N w O W m O M m C W O m Q n W m m O O O m N 10 N W r m N O m t0 Nm O 16 C13 Nm wf7 A d N u a a w c c G Ow w 0 O T O 3 w 'o m c m O N T Q W m 0 C a C J C C 0 o N O O F7 o N N y N C M m O O C N w y C N 2 w r O L q N i 0 O O� V �" um]N CC 0�" SZF OrnNOl O�'m 19 B }B a S 8 8 ro w _ O N OI N q � V y w K o `a c a C w � w m m � w maw c � a m� w w O m > o �SF3- w W ' C NZw m paw N w� w C V) d � t_ W Q Q 0 C w m w m O 0 9 J 7 J ry w00 EON y `6 0 0 U v Z Z o = 0 0 $ W m O W ° w U V U Cv w w 0 y N N w rvWfl W U 0 U y L D -<O n 0 man m a Cake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19. 2009 Riverside and Imperial Counties were the only counties in the Southern California region to see an increase in the population of younger adults age 20 to 34. The rest of the Southern California counties, including Los Angeles, Orange, San Bernardino, San Diego, and Ventura saw an actual decline in the population in this age group. Housing affordability is the likely cause of this demographic shift. Housing affordability is a significant cause of the population explosions which have occurred in Riverside County cities such as Lake Elsinore. Housing affordability is discussed in further detail Chapter 3. Table 11 -5 displays comprehensive demographic data similar to Table 11 -4; however, it is derived from Claritas, rather than Census data, and provides a detailed estimate of downtown Lake Elsinore and its surroundings for 2008. Clantas estimates that the City's proportional trend towards larger household size and increased Hispanic population continued from 2000 to 2008. The proportion of Hispanic individuals in 2008 is estimated at 48 percent, in comparison to 38 percent according to Census 2000. A slight proportional increase in African American and Asian residents is expected to have occurred by 2008. Contrasting the area closest to downtown with the City as a whole, there is a greater proportion of larger households and Hispanic people within a Yz -mile radius of downtown than the City as a whole or the 2 -mile radius which includes downtown. Income and Education As Table 11 -6 and Table 11 -7 illustrate, household incomes rose dramatically between 1990 and 2000, with all geographies evaluated showing considerable growth in upper income levels. Lake Elsinore's median household income rose by 36 percent between 1990 and 2000, higher than neighboring communities (with the exception of Corona), as well as Riverside County and Southern California. Despite the growth in median household income, Lake Elsinore contains a higher proportion of low- income- earning households than its counterpart cities, with 43 percent of households earning less than $35,000 in 2000 (unadjusted dollars). Between 1990 and 2000, the percentage of the City's population living below the poverty level increased by 5 percent reflecting the highest increase of all comparative geographies over the 10 -year period. As of 2000, a significant proportion of the Lake Elsinore's population over the age of 25 had not obtained a high school diploma (30 percent). This 2000 proportion is significantly higher that the proportion of non -high school graduates in the comparable cities (Table 11 -6) and slightly higher than the larger regions of Riverside County and Southern California (Table 11 -7). ,. ....... y >ac,in, rri�. CU H LL - Q F a 0 o c mF. 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O p W N S m a =wm z sqo °OO °o °o°o Jan 2z 'um o..cm 0 p'ON p`>Ym AO FJi m.YO ppj m .m. 19 W(9 mt9 ai l- 0 W O.d SQmQp Y =fQO =O u �o N E Fy 22 i a 9 8 8 3 °o N O W R 0 N v r- 0 T D m �p f0 t m m � �a cw 3a O C c ° m 0 0 i m c c? m W m m d Fm-JS O N m O� V d C U O N T O) 2 M U m L V o° N O N E m w m m A W W O O W W N A Q_ lA 0 A W N A O M O O d N twp � m Q � cm.°mm AnN b m W O O Q Q m e v a o d`e e m�mmo� NmQ °o e e die �o e N 0 N m YJ_ n tb0 mw M r m O O C N O w m rmrmomn INO W OhmN Qommm 0 om��vne mM V m A A N m Q die e e e o e O N m m r e N N N o m w m o r N Q M m 01 � N M pN o r r W W m b O m w M °m emo`n `�Nm m °u y m 0 o m ° °mwmm a = m m rn m rn° m a��m 19 fA 19G m'o. smog moo = om00000 moo0oo yrn000OO- m <�d vi ovio:°• 'v �NNmmr.- o m Omf9 f9 m UiMF � x e e N w h � e e N m o � N m A n N N o e N w m o b 10 r w N`"N�°nmr IS < e e e n N N M W b N Q m r m rbnNfO (O nNAM b w Q r b [p N OI O O m A rn W N Q Q °arnrnm M b r Nino mm0 N N V N N N N m O m M O m m m M u'iN O1 °m °ia � N oomM�o oa�6ri eac ma °m NOQ w rycvmin `Om a nw ID [ONO o'er a �n umi ��n v°i viv rmQQ�m N V O O r M hU Vim... \e LL �U ems m mN1�m1�Q0 m f j m � -NNONA o e mOb °' C m d TD)Omf 60]O {bpi Nm of O m f9 NRan m�rn0mb N W � U °o N O W R 0 N v r- 0 T D m �p f0 t m m � �a cw 3a O C c ° m 0 0 i m c c? m W m m d Fm-JS O N m O� V d C U O N T O) 2 M U m L V o° N O N E m w m m A W W O O W W N A Q_ lA 0 A W N A O M O O d N twp � m Q � cm.°mm AnN b m W O O Q Q m e v a o d`e e m�mmo� NmQ °o e e die �o e N 0 N m YJ_ n tb0 mw M r m O O C N O w m rmrmomn INO W OhmN Qommm 0 om��vne mM V m A A N m Q die e e e o e O N m m r e N N N o m w m o r N Q M m 01 � N M pN o r r W W m b O m w M °m emo`n `�Nm m °u y m 0 o m ° °mwmm a = m m rn m rn° m a��m 19 fA 19G m'o. smog moo = om00000 moo0oo yrn000OO- m <�d vi ovio:°• 'v �NNmmr.- o m Omf9 f9 m UiMF � x e e N w h � e e N m o � N m A n N N o e N w m o b 10 r w N`"N�°nmr IS < e e e n N N M W b N Q m r m rbnNfO (O nNAM b w Q r b [p N OI O O m A rn W N Q Q °arnrnm M b r Nino mm0 N N V N N N N m O m M O m m m M u'iN O1 °m °ia � N oomM�o oa�6ri eac ma °m NOQ w rycvmin `Om a 00 nm.momam .m�Omw w b 0 W e m Q m w n w r mn [QO N �p m �o c G Qp > Y p U m m m m m .�i v'N rn�rnmm ta° wN=bo�o i >> a 2 ° Jan° om�ti '3 m° T a 9 L O p m �°Om o.a �"ia "m Dao _ am¢ te. a t 23 L 3 h a E z' m a m m n E b M a m 9 V O O LL C d 3 n m 0 ID D m m LL � Ey � m O m 9D- > O m N m D mD m m m �cm= O - m E E 1- mE �'ac N y C m m G m C Z m - 0 C m t m w �Sz ° a D m m m �mv m °o N @ a W m u m E m L U mmmmv OOi O C L V M am U o t � � m m g o U E9mam U U Q m ° ^Ez M,v m C W a m a nw ID [ONO o'er a �n umi ��n v°i viv rmQQ�m r M 00 nm.momam .m�Omw w b 0 W e m Q m w n w r mn [QO N �p m �o c G Qp > Y p U m m m m m .�i v'N rn�rnmm ta° wN=bo�o i >> a 2 ° Jan° om�ti '3 m° T a 9 L O p m �°Om o.a �"ia "m Dao _ am¢ te. a t 23 L 3 h a E z' m a m m n E b M a m 9 V O O LL C d 3 n m 0 ID D m m LL � Ey � m O m 9D- > O m N m D mD m m m �cm= O - m E E 1- mE �'ac N y C m m G m C Z m - 0 C m t m w �Sz ° a D m m m �mv m °o N @ a W m u m E m L U mmmmv OOi O C L V M am U o t � � m m g o U E9mam U U Q m ° ^Ez M,v m C W a m a Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 In 2000, about 14 percent of the City's adult population had completed an Associate's Degree or higher; while similarly educated populations in the comparable cities make up, at least, 20 percent of the adult population. Adults with Associate's Degrees or above comprise 21 percent of the population in the County and 29 percent of the population throughout Southern California. By 2008, however, according to data collected from Claritas, which is based on Census data, 44 percent of the City's adult population had completed at least an Associate's Degree as depicted in Table 11 -8. The educational attainment of the City as a whole has dramatically improved, but it is important to note the downtown population still lags in this socioeconomic characteristic: approximately 24 percent of the population has attained at least an Associate's Degree. Downtown Lake Elsinore (represented by a 'h -mite radius surrounding downtown), is estimated to have a substantially higher poverty rate (28 percent) and proportion of non - high - school graduates (48 percent) than the City as a whole in 2008. While the disparity in income and Poverty level is not as significant when looking at the 2 -mile radius surrounding downtown, substantial differences remain when the 2 -mile radius is compared to the citywide data (see Table I1 -8). Economic Indicators Labor Force and Employment Trends Lake Elsinore's labor force, defined as residents who are age 16 or older and employed or eligible to be employed, reached 17,500 as of August 2008, which represented a four percent average annual increase from its 2000 level of 12,800? Furthermore State of California's Employment Development Department's estimated number of employed residents equaled 15,900 as of August 2008 represented an average annual increase of 3.4 percent from its 2000 level of 12,200. These figures translate into a current unemployment rate of 9.5 percent, which is equivalent to the unemployment rate in Western Riverside County, although higher than the .unemployment rate the comparable cities and throughout Southern California. Figure I1 -1 depicts the City's unemployment rate over a period 2000 through 2008 as compared to proximate cities and the large Western Riverside and Southern California regions. As shown, the City's unemployment historically is closely linked to regional unemployment trends. Future projections of increased regional unemployment —up to 12 to 14 percent in 2009 — suggest the City's unemployment rate may follow suit. Industry job trends in Riverside County expect to remain stable over the next 8 years. For example, the County expects to gain 212,000 jobs between 2006 and 2016, representing a 1.5- percent average annual increase. Government employment at 18 percent and retail employment at 13 percent represent the largest employment industries in the area. As illustrated in Table 11-9, projections of future jobs in Riverside County indicate no significant shifts in employment industries; the largest absolute gains in employment include jobs in the government, professional and business services, and educational and health services industries. The most rapidly growing sectors as a percentage of current jobs in Riverside County are s California Employment Development Department, / /www.edd.ca.gov /. Economic & Planning Systems, Inc. 24 H LL Q N O y c a N c w d F s O C J U C C N C U 30 3 a c w 3 p O W O N L O C N w Y J C 3 0 C 3 O O N a c d H C O a T w 3 Cl w (� c m o s ~ U UJ cw o c C N d o E O U d O C c y O W d U F J = 0 d F � O a �e d 2 N p F r K �@ w O d F O O C w° W d rt to J p F E d It 25 E c U An O U O N T d r c .c O O f0 C U l0 3 O C O v c U CL a c m C m 0 O V d C d U) a W O � C m (0 N d U d N � d o 0 N a W a a m Q a 0 o e d o 0 0 0 0 o e v o 0 0 0 m O O O n N 0 n M 0 N (O M O N O tn� V C6 W 4 C c6 c5 nwd'nNO < < < O N N n M(O MNO�Ot0 M (nmoQrnnw o u>MU>r< N d a' J OnI O dOW >.0 N M 1z M p N m x d d J O 06 C N �w d d O L N T — Qm Q o) 'N O -O U> fR fA C >'a d d W O 0 0 0 0 0 o e o 0 0 0 o e c a o O = MQN(OnQO nC)O C6n t[J tOO N o to m o to (D (V V' r O r� O y d 0 O. 0 J 2 Q fa Q F d O fA fA FA fA d3 FA F O m Q F OIL M �O(OQn�o(O a MMQMwn M Q M N N II M 7 r N N � N N O M 0 0 0( 0 0 0 0 0 0 0 0 0 0 o C M M M (O N C O 0 0 0 � M O � N O < r r N M o v o 0 0 0 0 0 0 0 0 0 0 0 0 0 M(O O) Q Q Q O (P C! 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O c E o y m c c "> o 2` o m F m m o OV c c' 0m Q cN ZtO O Op m 'm a NN C O N K V G N _ E 9 F lc E W N E .0 t W m 3 c U U p N y c O m Y .IG 9 E C j L O c w Q �j _ O J K � m Zt U U) 27 0 N N a W a m 4 0 a Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, Zpog Projected to be restaurant- related and arts, entertainment, and recreation- related jobs, followed by various professional, educational, and health services jobs. As shown in Table I1 -10, employment (jobs) in the City's downtown (roughly equivalent to a Y2- mile radius surrounding the intersection of Main Street and Peck Street) is concentrated in construction, retail trade, public administration, and wholesale trade. With nearly 1,200 jobs, the City's downtown comprises approximately 9 percent of jobs citywide. Given City Hall's location in the Historic District, it is not surprising that downtown comprises more than 70 percent of all public administration jobs in the City. Other high concentrations of jobs as a percentage of total citywide jobs include wholesale trade (34 percent) and miscellaneous membership services (28 percent). Table I1 -11 provides a listing of businesses located within the Downtown Master Plan Boundary. As of December 2008, there are 106 businesses located within the Downtown Master Plan Boundary. The area is composed of approximately 690,000 square feet of commercial space as estimated in this analysis, which includes primarily retail (restaurants and boutiques) and service commercial (personal and business) space. Retail and service commercial (e.g., travel agency, print shop, pet grooming) tenants comprise nearly 60 percent of the businesses in the Downtown but approximately 40 percent of Downtown's total sales volume. Remaining, tenants comprise local- serving office- related businesses. such as engineering, accounting, real estate, and city government space. "Other Services" including hotel lodging, personal, business, repair, and entertainment make up the highest percentage proportion of total sales volume in the Downtown - area with 43 percent, although some types of businesses included in this category - which include automobile towing, truck rental, and merchandising services - are likely not typical of future downtown tenants. Overall, the Downtown Area generates approximately $200 of sales volume per square foot of retail space. Taxable Sales Lake Elsinore generated $723 million in total taxable sales and $660 million in retail sales during 2007. These levels represented an annual increase of 22 and 28 percent, respectively, from the Previous year. It is likely that several big box anchored retail centers which opened in the City in 2006 are largely attributable for this substantial increase in total and retail taxable sales. These retail centers are discussed in greater detail in Chapter 4. These sizable increases countered the regional trends of sizable taxable sales declines during 2007. For example, Temecula and Murrieta witnessed an 18- to 20- percent decline in total taxable sales, and Riverside County saw more than a 10- percent decline from the prior year. Furthermore, Riverside County experienced a decline of approximately 11 percent in retail taxable sales, despite the City's generous increase of 28.3 percent (see Table II_12). Crime Crime rates often are an important metric for those comparing the safety and attractiveness of one community to another. As depicted in Table 11 -13, the City of Lake Elsinore maintained a higher violent crime rate than the nearby Cities of Corona, Murrieta, and Temecula. Lake Elsinore's violent crime rate was 3.84 violent crimes per 1,000 residents compared to 1.20 to 2.21 rates for the nearby cities. Furthermore, the City of Lake Elsinore maintained a higher Economic &Planning Systems, lnc. 28 PVN.q�e�W u4ENS.Mnun�suEKYwo4.W �ataa.v90f.ax Table II -10 Lake Elsinore Downtown Market Study City of Lake Elsinore and Downtown Jobs by Industry (2008) Job Industry ]1] Agriculture Mining Construction Manufacturing Transportation Wholesale Trade Retail Building Maas & Garden General Merchandise Food Stores Auto Dealers and Gas Stations Apparel and Accessory Stores Home Fumishings, Furniture, Equip Eating and Drinking Places Misc. Service Commercial [3] Misc. Retail [4] Subtotal Retail Office Finance Business Services Health Services Legal Services Educational Services Social Services Public Administration Misc. Membership & Nonclassified Subtotal Office Services Hotel and Other Lodging Motion Picture & Amusement Subtotal Services Total Jobs DRAFT Lake Downtown Lake Elsinore [2] Elsinore City 1l2 -Mile Radius 1 -Mile Radius 2 -Mite Radius Jobs %Total Jobs %Total Jobs %Total Jobs %Total 114 0.9% 29 2A% 31 1.8% 101 1.1% 0 0.0% 0 0.0% 0 0.0% 0 0.0% 1,104 8.5% 187 15.8% 234 13.4% 939 10.6% 843 6.50/6 6 0.50/6 221 12.6% 630 7.1% 266 2.0% 11 '0.9% 11 0.6% 215 2.4"% 494 3.8% 166 14.0% 191 10.9% 439 4.9% 497 3.8% 13 1.1% 33 1.9% 450 5.1% 764 5.9% 0 0.0% 0 0.0% 620 7.0% 559 4.3% 42 3.5% 44 2.5% 241 2.7% 643 4.9°% 25 2.1% 40 2.3% 610 6.9% 300 2.3% 2 0.2% 2 0-1% 17 0.2% 289 2.2% 9 0.8% 23 1.3% 194 2.2% 1,679 12.9% 57 4.8% 73 4.2% 786 8.9% 723 5.6% 78 6.60/6 83 4.7% 529 6.0% 518 4.0% 30 2.5% 30 1.7% 319 3.6% 5,972 45.9% 256 21.6% 328 18.7% 3,766 42.5% 764 5.9% 56 4.7% 62 3.5% 595 6.7% 691 5.3°% 86 7.3% 100 5.7% 530 6.0% 363 2.81/6 33 2.8% 33 - 1.9% 249 2.8% 30 0.2% 2 0.2% 2 0.1% 18 0.2% 1,177 9.0% 107 9.0% 285 16.3% 607 6.8% 130 1.0% 6 0.5% 6 0.3% 75 0.8% 246 1.9% 175 14.8% 175 . 10.0% 232 2.6% 158 1.20/6 44 3.7% 51 2.9% 104 12% 3,559 27.3% 509 3.9% 714 5.5% 2,410 18.5% 240 1.8% - 5 0.4% 5 0.3% 11 0.1% 426 3.3% 15 1.3% 15 0.9% 358 4.0% 666 5.1% 20 1.7% 20 1.1% 369 4.2% 13,018 100.0°% 1,184 100.0% 1,750 100.0% 8,869 100.0% Ind 2" Source: Claritas Business -Facts (2008) and EPS [1] Assumes one employee equates to one job. [2] Radii are drawn from the intersection of Main St. and Peck St. in downtown, a central location in the Historic District. [31 "Misc. Service Commercial" includes businesses that demand space in the downtown area, such as travel agency print shop, hot springs spa, pet grooming, music dealer, pest control, locksmith, etc. [4] "Misc. Retail" includes drug stores, liquor stores, used merchandise stores, miscellaneous shopping goods stores, non -store retailers, fuel dealers, and miscellaneous retail stores. Prepared by EPS 123/2009 nueoomrarmvw ea .+,"am.,�,m�mnwswvuxmn+ara3mroe r.nw.m 29 Table 11-11 DRAFT Lake Elsinore Downtown Market Study Downtown Lake Elsinore Businesses (2008) # of Total Category Businesses 1] Sq. Ft [2] Total Sales Total %Total %Total Volume [1] Tota Total / Total Retail Apparel Automotive Dealers & Gas Stns. Building Materials, Hardware, Garden Food Stores Home Furniture, Furnishings, and Equip Restaurant Mist Retail Subtotal Retail Service Commercial Automobile Repairing & Service Misc. Service Commercial [3] Subtotal Service Commercial Total Retail and Service Commercial Office Engineering, Accounting, Research, Mgmt. Finance, Insurance, and Real Estate Health Services Public Administration Social Services Other Office [4] Subtotal Office Services Construction Manufacturing Membership Organizations Wholesale Trade Other Services [5] Subtotal Services Total Sales Volume per Sq. Ft Retail Retail and Service Commercial Total [6] Source: InfoUSA and EPS. 2 5 1.9% 6,700 1.0% $574,000 0.6% 3 4.7% 14,600 2.1% 1 6 2.8% 75,000 10.9% $3,464,000 3.8% 1 5.7% 24,400 3.6% $8,793,000 9.8% 10 0.9% 9.4% 5,500 0.8% $969,000 1.1% 16 15.1% 33,500 36,400 4.9% $2,920,000 3.2% 43 40.6% 196,100 5.3% 28.6% $4,514,000 $30,930,000 5.0% 34.3% 4 13 3 -8% 12.3% 9,100 1.3% $2,286,000 2.5% 17 16.0% 56,600 65,700 8.3% 9.6% $3,066,000 34% $5,352,000 5.9% 60 56.6% 261,800 38.2% $36,282,000 40.3% 7 6.6% 64,600 9.4% $9,381,000 10.4% 6 5.7% 11,500 17% $2,378,000 2.6% 5 4.7% 6,000 0.9% $2,559,000 2.8% 2 1.9% 80,000 11.7% $0 0.0% 1 2 0.9% 5,500 0.8% $0 0.0% 23 1.9% 21.7% 6,700 174,300 1.0% 25A% $512,000 $14,830,000 0.6% 16.5% 6 1 5.7% 28,700 4.2% $7,023,000 7.8% 7 0.9% 25,000 3.6% $465,000 0.5% 6.6% 97,000 14.1% $0 0.0% 3 6 2.8% 36,000 5.2% $11,654,000 12.9% 23 5.7% 63,200 9.2% $19,855,000 22.0% 21.7% 249,900 36.4% $38,997,000 43.3% 106 100.0% 686,000 100.0% $90,109,000 100.0% $158 $139 $197 do n(om' V] Business inventory and sales volume current as of December 2008. [2] Total square foot provided by InfoUSA is based on the number of estimated employees per business as a square footage range. EPS estimated the square footage for each business based on the mean of the square footage range. [3] "Misc. Service Commercial' includes businesses that demand space in the downtown area, such as travel agency print shop, hot springs spa, pet grooming, music dealer, pest control, locksmith, etc. [4] "Other Office" includes businesses, such as investigation business and graphic design. [5] "Other Services' includes, hotel lodging, persona[, miscellaneous repair, and entertainment. [6] Excludes the square footage of businesses that do not generate sales volume. PreparedbyEPS 1232009 30 na, ww„°, mw. Ea:.. nm„�o,oiw :nan�w..,.�,e,wmr.nwsa F LL Q � o yO N N O L N O O BOO Q v N O � � � N � w -Wa Fw- 10 n two p 0 � C N a Itl a- �VN Q r O N O N O N O N O N O N 0 N E w a o e o 0 0 r 06 CJ N .6 W O OJ ! W W V CII 131 b3 FA t9 N fA M fA W N O N r W W r 6 m r � N M m W fA fA 1A N vi W N O b W b 6 � fO N W n W N M m Q fA (fl Hi N O � m m m N a m m r b b oa V 4 W W N W � C fA 6N9 N W f9 � {o N o o M e n e N M C y V N t7 �p b W� W M Q r Q r N_ m ffl NM N ? fA N M O Wo o N v ri ui . eA V3 N 0 T C w L L L t G U s U t a -7,2 ro U U U w p ~ y C E m m ¢ w ¢ ¢ o ¢ > ¢ o ¢ 2 U � N F- 31 e e o 0 0 0 W r N a M W m W m W tO W N � 0 rte- Q rte' M nl N N E9 fA N N M m r m C1 M t0 `� M m °� W N N W M N m N V W W M m m W H cl M Cq N N to N M pj q n V N m m 6> fA fA N FA N fA W rn 1A n M.n N O p) n O V (O O W -CS ry N O M Cj o F9 N� N b r Q O W O) m W VO m m� m O D7 fq fA m Of M K m b Q m r W O W M V n ul a° O m n V M^ W Q ti M N M (ry (p W EA EA T r O) r N N M O M O a v o r n M M M a N N d � E 4Q m O N N W m O m l0 w m� V ro V U V U U V U K R 3 N C W Q O dl N N 3 {p W N O C O U @ W O L m 0 N Q] w C E N O ai m s a N ro � w m m m m � C N ro 00 X m ro d v � y C aQ W E E J � " w C O N w E N T _ m N Q � � w o w ar W t C O w p a � U m N w v 3 ro 3 O C o � ym ..J O C a W a 0 4 Table II -13 Lake Elsinore Downtown Market Study Violent and Property Crime per 1,000 Residents (2007) Violent Property Place Population Crime Crime County Riverside County 2,073,571 1.08 Metropolitan Statistical Area Los Angeles MSA [1] 12,929,875 5.54 San Diego MSA [2] 2,935,792 4.66 State Average 36,553,215 523 Source: U.S. Census Bureau, FBI Crime Statistics, and EPS_ [1] Based on the Los Angeles -Long Beach -Santa Ana MSA. [2] Based on the San Diego - Carlsbad -San Marcos, CA MSA. 7.20 25.65 30.59 30.33 "come" Preparedby EPS 112312009 P.11&YC {18fAt1eke FAplwe 32 Nmy Mk BhdlA 1s118jM n j(.1l Mxfs per 1,000 residents City Corona 153,518 221 26.20 Lake Elsinore 47,937 3.84 34.57 Murrieta 98,051 1.20 19.94 Temecula 93,665 2.21 28.34 County Riverside County 2,073,571 1.08 Metropolitan Statistical Area Los Angeles MSA [1] 12,929,875 5.54 San Diego MSA [2] 2,935,792 4.66 State Average 36,553,215 523 Source: U.S. Census Bureau, FBI Crime Statistics, and EPS_ [1] Based on the Los Angeles -Long Beach -Santa Ana MSA. [2] Based on the San Diego - Carlsbad -San Marcos, CA MSA. 7.20 25.65 30.59 30.33 "come" Preparedby EPS 112312009 P.11&YC {18fAt1eke FAplwe 32 Nmy Mk BhdlA 1s118jM n j(.1l Mxfs take Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 property crime rate at 34.57 crimes per 1,000 residents during 2007. The aforementioned nearby cities' property crime rates ranged between 19.94 through 28.34. Schools The strength of local schools is another metric potential homebuyers may consider when relocating households. The City of Lake Elsinore's schools typically fare below those of nearby Corona, Murrieta, and Temecula compared on API scores. The City does maintain a higher average score than the State of California with a 731 compared to a 724 API. Lake Elsinore's SAT scores averaged 1,436 during 2007, slightly higher than nearby Corona's 1,429, but below Murrieta's 1,483 and Temecula's 1,526. Lake Elsinore's average of 1,436 is also above Riverside County's average score of 1,418 but below the State Average of 1,497 (refer to Table 11 -14). Socioeconomic Conclusions Located just south of the core of the Inland Empire along I -15, a primary north -south transportation corridor in western Riverside County, the City of Lake Elsinore is positioned to capture future population and employment growth in the greater region. Indeed, the City is projected to nearly double their current population by 2035 with a total population of over 90,000 residents. In addition, the City is projected to add- more than 6,000 new jobs increasing the current estimate of 13,000 to 19,000 jobs by 2035. If the proposed Downtown Master Plan boundary (approximately equivalent to a yz -mile radius surrounding a central point in the Historic District) grows at a similar pace as the City, as many as 4,500 residents and 570 jobs may be added Downtown by 2035. Substantial population growth in the City estimated over the next 30 years suggests a continued, healthy demand for residential development. This population growth, coupled with trends reflecting substantial household income growth, indicate strong demand for retail and hospitality space to meet the retail and services needs of the expanding and increasingly wealthy population. Despite its location along I -15 and connectivity to the core of the Inland Empire and burgeoning wine industry surrounding Temecula, the topography surrounding the City and existing urban development patterns indicate future retail development will likely cater primarily to the local population. Similarly, estimated future employment growth in the City and projections of jobs by industry indicate there will be demand for new office space, which is also anticipated to serve the local population. Socioeconomic conditions in downtown Lake Elsinore indicate that household incomes are comparatively lower than citywide household incomes. According to data obtained from Claritas, the median household income Downtown was approximately $20,000 less than the citywide median household income. Approximately half of the adult residents in downtown have attained at least a high school diploma, but the remaining half have not completed high school. These metrics suggest there may be constraints on price points for housing and retail merchandise, and employment opportunities for residents of downtown may be concentrated in labor and service - oriented industries. It is important to note, however, that demand for housing, retail, and employment opportunities in downtown will certainly extend beyond the current downtown population. Economic& Planning Systems, Inc. 33 ..�.�,..�w,,a..m.. �,SO.,w•�av,Ww <� DRAFT Table II -14 Lake. Elsinore Downtown Market Study Summary of School District Performance for 2007.08 School Year School Level Item Elementary Middle High Average API Scores [1] [2] Corona 804 743 719 755 Lake Elsinore 779 713 701 731 Murrieta 832 803 766 800 Temecula 872 826 768 822 State of California 763 720 689 724 SAT Scores [2] Corona 1,429 Lake Elsinore 1,436 Murrieta 1,483 Temecula 1,526 Riverside County 1,418 Orange County 1,590 San Diego County 1,515 State Average 1,497 "ap! sum" Source: California Department of Education (2008) and EPS. [1] Academic Performance Index (API) measures the academic performance and growth of schools on a variety of academic measures. Based on 2007 -08 Academic Year. [2[ API and SAT scores are an average of all the school districts in each jurisdiction based on the 2007 -08 Academic Year. PmPeredbYEPS 1/23/2009 P.l /&Mn' /8 / %(9ke ENmie Dawnlaxn MM ST.'.1y1A1000S1 /B10]mWH f.1r.�.xk 34 3. HOUSING MARKET ASSESSMENT This chapter provides an overview of housing trends occurring regionally, locally, and in downtown Lake Elsinore. Following a review of housing trends and residential market performance indicators, this chapter estimates potential future demand for downtown housing units. As indicated in this chapter, increased population and household growth in the City and in downtown suggest demand for downtown housing will increase over the next several decades. Additional demand for downtown housing will be dependent upon a targeted approach to revitalizing and redeveloping downtown as an attractive place for existing and new residents to relocate. Regional and Local Housing Trends For -Sale Housing Performance Indicators Overall Sales Trends The City's median home prices for both new and existing homes increased significantly between 1998 and 2008. Table I11 -1 demonstrates an annual increase of 12 percentfor new homes compared to a 13 percent annual increase for existing homes during that timeframe. While those are healthy rates of increase, Lake Elsinore's median price for new homes lagged behind Temecula, Murrieta, Corona, and Western Riverside County, which realized 12 percent to 16 percent per annum increases. Furthermore, the City's 2008 median home prices for both single - family and condominium homes are generally the lowest among those proximate cities in the Western Riverside County market. _ New Homes Lake Elsinore absorbed 138 new single - family homes during 2008 through November. This number represents a significant decline, over 72 percent, from annual new -home absorption during the residential housing boom years of 2002 through 2006, where the City averaged 500 new single - family homes per year. Despite the recent decline during 2007 and 2008 due to ongoing economic contraction, the City has demonstrated consistent new housing demand over the past ten years, which is expected to continue once the housing markets and economy recover. In addition to single - family homes, the City absorbed 40 new condominium homes during 2008, which is only 22 percent of total new homes sold. While the City's attached new homes are few in comparison to overall sales, the City had absorbed only 46 new attached homes during the nine prior years of 1998 through 2007 (see Table 111 -2). Overall, condominiums have represented 2 percent of new homes sold in Lake Elsinore since 1998, compared to 4 to 8 percent in the three neighboring cities and 5 percent in Western Riverside County. Economic a Planning Systems, Inc. 35 >°°�«�•'°'_ 'w =^^�^°^ ^ ° ° ""@°" °°'°°` F- LL W O O O N � W m � m g E 3 � O y C � o d W m r,oc r%1 m W C y N F J T m 0000 0 00°00 v •no O O O O O 0 0 0 0 0 O O O O O wwenww 0 0 0 0 0 0 0 0 0 0 C; 0 0 0 0 0 o i.i ui 00000 0 0 0 0 0 O O O O O p 0 cli W m n v m m rW N� f 9 f A r EA 0 o a o o a e o o e W N 0 0 0 0 r •n �n o o m ono r m m m m M i N(O r O O H N m oi fA M (fJ fA U `ism »w en fA fA 0 0 0 0 FA EAM�(q N' a 0 0 0 0 v N 0000 m W ni uioo v O M m (O O 0 0 0 0 hO�UO 00 0 0 o r N H c)a-1� M O O O O O 0 0 0 0 0 O O O O O wwenww 0 0 0 0 0 0 0 0 0 0 C; 0 0 0 0 0 o i.i ui 00000 0 0 0 0 0 O O O O O p 0 cli W m n v m m rW N� f 9 f A r EA 0 o a o o a e o o e W N O O O O 0000m •n �n o o m ono r m m m m M i N(O r O O H N m oi fA M (fJ fA O O O O O 0 0 0 0 0 O O O O O wwenww 0 0 0 0 0 0 0 0 0 0 C; 0 0 0 0 0 o i.i ui 00000 0 0 0 0 0 O O O O O p 0 cli W m n v m m rW N� f 9 f A r EA 0 o a o o a e o o e W N 0000 m 0000m O o 0 0 O O O O N O O In O t(J O O H N m oi m' aio f9 f9 r �- Fq eD M op M fA fA FA EAM�(q N' a 0 0 0 0 A O O O O W O i 0 0 0 0 hO�UO 00 0 0 o r `-'f9 H c)a-1� M m 00 C YI HO ONM �y N ti Mfg O 0 0 0 0 0 ua in as .a is vi en w O In 0 0 m O t1J O N O N 0 0 0 O to I A O O I n 0 0 c 0000 n 00000 O 0 0 � 0 0 0 0 0 N NNM N N 0 0 M O O O O O fA f9 EA {A L MOtOU� V3 fiJ di Uj fA 00 W N N (p N W 0 0 pOj I�MMmu> O 1n N O O NON O • 00 • O O <7 00000 f96N9 fA� fA MM �� s3� m 0000 m 0000m O o 0 0 O O O O N O O In O t(J O O H N m oi m' aio f9 f9 r �- Fq eD M op M fA fA FA EAM�(q ••\ m M e a o 0 0 CO W W N In M � tD rN -r r m O O O O W O O O O • O O O O O O O O o •[i O V1 O N O 1, o c O� r O N •p eD M op M 1� •O N �f9 f9�M `-'f9 H �'M rM Mfg O 0 0 0 0 0 O In 0 0 O O t1J O N O N 0 0 0 O to I A O O I n 0 0 M O W� n W mcD rlSj �NNn O O O N N O C �1� O W MW � bM9 � � •P �MM c0 e9 N NNM N d' C N M � fA f9 EA {A tl! ffl EA fA fA V3 fiJ di Uj fA 0 0 0 0 O 000 (p N 0 0 0 0 0 O i(J O p 0 0 0 M 0 0 0 0 0 O 1n N O O NON O • 00 • O O <7 00000 0 0 0 f� d' N O 0 0 In (H fA f9 H3 H! f9 f9 E9 EA fA fiT fA fR E9 N3 fA fA EA T C C 0 N O a U N % y a O % O a = % N C W . n 0 U W m C % Q m 0 m D sE o % 5om�mm U�O co KR T O U V O N % C E C > m N O W C m m o m Q m 0 UJH�U 3 U�OO_tn tq E 01 O % m d % a 0 m 3 L_ m C .N N E N O 3 -0 C @ C E � X Q 'O Q 0 % U C lO % uj N > G LU a 6 o a as o U G L U a E 01 pj 'w d a > O `c E « a% 0 ° m m E h O o Z L_ C 3 m O Q « 3 % v o v a W y « C O % O N U O a > > a N G U m 0 _ _ co N 0 a W 0 m c 4 y C b J N_ ° C 0 �z W 0 N W N T C V � 3 W � m 0_0 e 3 m O q Do Wu s o m« NCJ b Q b b o r J m 0 l9 imN N N °] mr mmmmm �nrnrnm �o b W t0 n b A 0 m �O d mm rimoi� - ciririoi m O nr W O N N V `m0� ¢V)(D YJ O N NOM O O n O O � N N OhNV W (O d Om]NN' r n Ne``NN N yy �D NmN O NC01(WIN N l0 m O Ol W O A N N a ¢ N N A d N W tnJ W O aAJ CO l0 NM m W d O N M d N M W O O W N M m�O m mN. N O m W n N N m m ry N A N O 1° " ["V I� O W N O 2 1 N n m n W m M y dy N � 0NON1� N RN +NNW N m W N r R Cli A (O N �- VQl N¢nM(O W i m� w�mmo n 0n. N <v_MWOm W r c h MN(OMN W C m V a m a o C m m C m wmo E C Jr�U �j UJO�mlO ' m N �e�m e �ooeo .= .3 of o vi of ry d N W N tcl m Q N n Nm m We n l0 [m O W N r n¢ d N O N yymm M M C'i m m M W O C W c m M W W •- M r �- A c Cl NO1NN N �°m �aWy�M N ' NUniN N�AfmO l� N WMM�m O m M n m N m` m AWM�(O •MA M NnMNOI r m Wm m¢ W m l7 W O U v o C b m ym O E .G mm ¢Wnm❑ O� C s y J O b OJOKfnm 37 ZP a o e O O O O O O O O O O O O O O O O O O O O pO O YO] Cnl m m O` r a W dm n u"i °v mo m �(n.IOM m mrnfONN ANN m N N m d� m m viNNt'>Yi W W N N O a0 m O 10 W W W r [7 N N m tll A W N dNVd M nIO N ¢teO •- �- �- W C N ^2 NI OnINO YN] 1m �N�@mOli°O0 Nm O r b[7 N� m dMNCO1 N O� O O N aOV CNf N N T J U a o - b `m o z m C w �@ C dQ OimO o �r�U 2i U r C O C J m N @ a o w ° @ N 0 � O W 3m 4 � E E m o o aZ 3 W Y � O u j= m m @ m o @ O L m O V N u ul Y J _ N �Y lti n a a Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 While new home absorption has slowed considerably during the past two years, single - family home prices also have fallen. For example, Lake Elsinore's median sales price of $331,000 during 2008 represents almost a 30 percent decline from its peak of $467,750 during 2006. - Multifamily home prices also have dropped, although at a lower rate than detached homes. The City's median sales price of $236,750 during 2008 approximates an 18 percent decline from its peak value of $288,000 during 2007 (see Table It I -3). The recent drop in housing prices is understandable as supply currently exceeds housing demand. This makes sense as declining home prices and credit availability have slowed absorption in the past two years. As the housing market and economy correct and strengthen, it is expected the housing market would return to a more consistent growth period. Existing Homes Lake Elsinore's existing home sales have fared better during the cooled housing market of the last couple of years. During 2008, the City realized 1,186 existing single - family home sales, as well as 44 attached home sales. The detached sales represent a 21- percent decline from peak sales of 1,513 during 2005; however it also represents more than a 200- percent increase from a sluggish 2007. Furthermore, attached sales volume during 2008 represents only a 6- percent decline from peak sales of 47 units during 2004 (see Table 111 -4). Single - family homes realized a median price of $233,000 during 2008, which represented almost a 43- percent drop from peak values of 2006. Furthermore, attached homes realized a drop from their peak during 2006 of $220,000 to $132,500 during 2008, almost a 40 percent drop (see Table i I I -5). Despite the downturn in the last two years, existing single - family home prices in Lake Elsinore have risen by an average 8.9 percent per year during 1998 through 2008. Furthermore, existing attached home prices have risen by an average 13.0 percent during the same timeframe. While recent price drops from the heated values of several years ago have been significant, these price drops are typical for the region and should promote sales transactions as the economy improves and stabilizes. Housing Trends Tenure During 2000, owner - occupied homes represented 5,700 of the over 8,800 total homes in the City. This represents a 64 percent ownership rate, which was six percent higher than its ownership rate during 1990. Nearly an 80 percent home- ownership rate of new:housing units from 1990 to 2000 contributed to this increase. This homeownership rate is consistent with nearby Temecula and Corona which had homeownership rates of 83 percent and 74 percent for new housing units during this timeframe (see Table 111 -6). The rapid growth of the City relative to Southern California, and the fast - growing Riverside County, is seen on Table 111 -7. For example, Lake Elsinore witnessed a 45- percent increase in households and a 36- percent increase in housing units from 1990 to 2000. Riverside County saw household and housing -unit increases of 26 percent and 21 percent, respectively, over the same time period. Finally, Southern California trailed the three geographies with 10- percent and 8- percent respective increases in households and housing units. Economic & Planning Systems. Inc. 38 F— I O O p O W LL ad M m O m O O O O h m m O u f O ni M M Q Q @ y v 'o 1 N = C � :o z N b N W c TW a u y m J m ° Y Z � 0 � Z C 3 Q C m a m y N W C 0 @ 1]Y9 m 1� J� �m J w c c Q L � U a' N O N 0 N O N ooao 0 1C of tti o m 0 0 0 o P 0000 O o m o 0 0 M O W m M V M Q M m mmm m 0 0 0 0 W O m 0 0 W O n O O m P M m w h W m w m M Q Q m P W di f9 W fA 0000 n vI000 m h N O O m h r r f7 N fA F9 Mi9 m ooe°e PmPQ'- �i of r n m 00000 O o O m o o m o N o m M m m ? 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OOn r O O O O m 0000 N O m O m N L6 O M (9 m 0 0 m O O T m O w W m m � 0 0 o r m o o m m Q m m O O M O O 0 o M Q m a tom � 00000 001000 yyO O N m O Q P N m m f94i f9M 4] 00000 O O m O O m A n O o M m N W m m M W O Q P P N M M m m m m m O S N O O O O r O O NO.-mm wQrPr m Pm m m m p O o o O 1000m0 n O O n 10 N m m w M m�mrm P N N M M m :A H3 fR df O O O O O 1000A0 N m 0 m m vi of vi ai QmPMn Q m N N M di Ui 09 f9 F9 00000 SN0010 M M r N N H3 fA m f9 f9 O O O O O 000010 p O'O m N 10n10 wM tRm�»mm O O O O O O O O O m moo ° r o v o r o N N N W N m m m m m 0000w O O O O O O 10 m m w m W r V N m w w w m m m m m 00000 ommoo wNminDO N�r-N f9 f9 fA Vi Vi O O O O O O O O O O m 0 m O m wmim mQw 0 U a 0 N p E `o °' m C a�i N 0 C m C y@ C 0 w w@ @@ @ c m O E W m.' c m �¢ca+ O 0 n 0@ E C C O JO CL mm U 39 a E W W m E m T N 0 E O U U O O tp i Ul _T U U m O N w y O L G N 0 r O N w @ N °m L W 3 L_ W C y C a E L_ o- C _O C ip J E Q O @ Q L � V @ r m @ y O a c m 3 U O @ U @ Lp @ T vpw� 0 aN 0 O �n� m c c ° O ] L (p YO C ta_t Oi O J �i N C V v N N s i i a 8 a °o C W a d I O O p O W O O O O p O O O O O 10 O O M m O m O O O O h m m O y f O ni M M Q tp m o Oi O) 1 N � O N O N O N 0 N O N m W m 0 0000 M 0000. N 0 0 0 0 m M P P Q Q W f9 f9 Vi A 0000 W 0 C 0 o m m O m O m OI r P W 01 W r M m o N M M M M Nmmm m 0000 m 0000 O O O O m n M P m m O Nt+°)NM N mmmm m 00.00 m 0000 N m m m m m e c m nNNN cMi t9 f9 fA f9 Vi P000 n 10 O o O M m m O m o N M m N N N N N N V! m Mi9 Vi 0 0 0 0 m 000o Q opoo m vi ro co m °i W W O r m 0000 m b000 N O m m O P tvvvro r mnnr m O O O O O o O O O O O O m m O Q W M M m <A f9 f9 M (A o Q O o 0 O m O o 0 O m O O O tO � M 1fi N Q10 t°+1 N1Pn f9 V3 f9 V3 V3 0 o 0 0 0 O O O O O 0100pm OtOP� m M N N N Q mmmm�» O O O O O 0 0 01°0 N v-dov O Q N r M m N N M FA U) E9 H3 V3 O O O O O O O m m O N V NNOi M P V N O N M N N M f9mV3 E9M O O O O O 0 0 0 0 0 om000 Mrvi .-°i nWWmO O O O O O O m O O O ON01()O 000ry Q m n m w N M r N mmmf9m m M, c o N U n v K d O y a O aQ w'�R1O E y C m@ C C C J @� V � V JOKtOm F W Z Z � q `q `P `P 'm °°i °m o n t 0 O N N of <O 0 0 0 0 Q n YOj_ O S r 10 t7 r O M m N c r N N N M N w fA fAm ER o O o n O O O Q m b m m N N M N W E9 t9 4A O O o N O O m n N O O n �- P n N Q N N N M M N W fA f9 G9 (9 Opp O n O O O N W O m 1!) r m o m w M r N N N N N 000 M O m O M �ri o ui ici O N M O M N N M f9 19 Ffi fA 0 0 0 o Q 0 0 0 o Q O b m O C M �o f0 W m N m M r r r Mmt9m O 000 V O0. OOn r O O O O m 0000 N O m O m N L6 O M (9 m 0 0 m O O T m O w W m m � 0 0 o r m o o m m Q m m O O M O O 0 o M Q m a tom � 00000 001000 yyO O N m O Q P N m m f94i f9M 4] 00000 O O m O O m A n O o M m N W m m M W O Q P P N M M m m m m m O S N O O O O r O O NO.-mm wQrPr m Pm m m m p O o o O 1000m0 n O O n 10 N m m w M m�mrm P N N M M m :A H3 fR df O O O O O 1000A0 N m 0 m m vi of vi ai QmPMn Q m N N M di Ui 09 f9 F9 00000 SN0010 M M r N N H3 fA m f9 f9 O O O O O 000010 p O'O m N 10n10 wM tRm�»mm O O O O O O O O O m moo ° r o v o r o N N N W N m m m m m 0000w O O O O O O 10 m m w m W r V N m w w w m m m m m 00000 ommoo wNminDO N�r-N f9 f9 fA Vi Vi O O O O O O O O O O m 0 m O m wmim mQw 0 U a 0 N p E `o °' m C a�i N 0 C m C y@ C 0 w w@ @@ @ c m O E W m.' c m �¢ca+ O 0 n 0@ E C C O JO CL mm U 39 a E W W m E m T N 0 E O U U O O tp i Ul _T U U m O N w y O L G N 0 r O N w @ N °m L W 3 L_ W C y C a E L_ o- C _O C ip J E Q O @ Q L � V @ r m @ y O a c m 3 U O @ U @ Lp @ T vpw� 0 aN 0 O �n� m c c ° O ] L (p YO C ta_t Oi O J �i N C V v N N s i i a 8 a °o C W a d rIM L m a C y �N d � R O m X W O N Oml m N OI ' a� 3 3 y O u = Y.m C R +� � z C W O L O G m � fn l C `i w rn m W C m � FR J 2 W N n N O N m N O N O N N 0 N 0 N O N rn r W Oml Em m m O M m W m m m n Q M r • -•-NC7 O N r r N M r N M r O m O m r o M m �- - N M M N M m N m m O M Q N m N C 4) Q � V .- M I m Q A r r N N M W N Q N O .- N V m r N N M O N m N W O N m CO � N 6 � M M N m Q r m o A m n m m N M O N Q O m � M m r N Q Q N Q O m N N M A r m n N Q m A m Q A N Q m r O O �nm�m r o m O m m m W Q N Q m m W m m m m m m Q Q N O m W m m N W M r m m m m m m r MM •-M n N m M N m M O m 0 O N m n m W N O l[1 Q r A m N m N �Omj� NV O M M cl m O M Q Q M m r N a O m CO N Q M m W W W m m M m m M m m r M m n m m M m Q lfJ A m NMMM�- m M M M m m r o m m N m m Cl m m N N N N n m A 0 A r M m W 0 N m Q N 0 m O W m N m M N N m N m m r W .-mOmm C Q m O ri co m of .ci m M N N m W N O Q O Q_mWQ A Q {n n m R T C C R JO U a N y N a O N Q � IL W C < M -f0 y C N R) C C CN N 3 0 J F :E U R OJOK In fn U me vm�nrn .n- N N m c W N r m r W m n N m M N M OJ In � m N M N o m m W m Q m Q m m m v> c Q m t-mr— N h m m O m m O M � m m Q M M N M t G M m A m m O [ONO N M m m m m M O m N M O N r n m v o N r m m Q Q m O m W W cV W N m m m m m Q m D n N M MmM�- W W W m O m N m m M m O (h N 6> Q W �nmo m O O m N (O m m W N N N N 1� V ti M r O m 0 r c n co N O Q m m N �- n WWriW N m Q N N m co co m�nr m cici MQ N m O N n m M r m Q N - Q M . m- M Q m m N W W Q N r N N r m n Q r m N n m r m O Q N r < N N c Q N Q T C O U b C ` N N E W O R Q O R R� O N J C R N J O N OJOX CO CO o V m 5 O) a W a N E co m o0 >. N U1 � C Sl o E E o o Z m Y J v �o 3 w _0 R R O m O N Qj N i } E 8 g i F w a 0 N d W a m m a` LL 41 0' 0 E T m `o m U Q D7 C J C N U E t O m o> N m N N L D! m 3 m j N 0 E L O O E d 6 N (n N W C � m U N E m mo D y1616 L'3 c o K m o E ca E >o 0 W> N L C p � mac Q O L m C N m imp V m 0 U C r a W 0 v m d Q=m 16°1616 a �oovo °16°16 0 0000 C C Coirn A V Q U W - M QC rvm6m m mm<O d w tNorC rd)oNm m o m7 AN�m.o co z <O YYt w OtU c > Q a`� a ao 0000 � 160000 016016 r 160000 d= m 0000 160016 a m 00000 1600016 00016 N000 m M 160000 160000 Hl C W M Y109 Q OOONN Nc0 m� m 16 00110N Mc d)QI N �-NN O> MO m V W A t7 MOJN C._ �y H .X O N NC]NM tRMMd3 N f9 C NN N<'J U3 Ni f969 f9 N N N �t9 t9 fA Vi MMN-N di Mt»f»M oW °' 0000 16000 r 00000 00000 00016 0000 m 160000 160000 A ONO. i- 161.016 OO N 000o o1 O Om00 D• Q OON h m N w N N N 0) 000 O A N M OI m W m 6l N R N M V V N W fA to f9 M fA NtOMMN fA fA W M fA N C)N N W (9 fA f9 N f9 QQtryM M f9 f9 (A fA f9 O O O O m O O O O O O O O O O O O O O O 0000 160000 00016 v 160000 fp o Noo _m 00000 00016 v 00000 O C! � (p 1(j Oj OOIOOY] OOION r NIOm O'O N O O R N V N m K M N N M M M M V V M M M W fA fA f9 tR f9 f9 (A fA Yi N bi t9 fA fA f9 f9 f9 fA di y� . 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V N O O O o o O O O O N N N O N N A O A m r O O O o r O O O N Q m � MMME9 c dIMMM M MM Mf9M M MMMMM >'H 'per 160016 M o000 0000 m 0000m NNOO A ANO rn 160000 160000 00016 in 000m �= m m 2wwN r uc Mo f 0oin16 o : M mwO 16 o w N Nml v a 16 C6 —w n y MMM M MMM fA MM ^' M� MME M N m 'x �w c m FT 0 U c m m 3 p i �a m Of y C v C a m m > O� m c F E O CN m m d N 0,6 0 m 5 C ONlm i mC O m U j C C y -mc m � m > C C ry d N m m OU m O � m W a J U U U 41 0' 0 E T m `o m U Q D7 C J C N U E t O m o> N m N N L D! m 3 m j N 0 E L O O E d 6 N (n N W C � m U N E m mo D y1616 L'3 c o K m o E ca E >o 0 W> N L C p � mac Q O L m C N m imp V m 0 U C r a W 0 v m d a w a m °o O N. � I N U O m m y cm i V m o N 42 C °w °m E a mo °oe E N O y 2 O LL m m Q n N m m O ° N O T O U U •- •N- � m O m N NNOI O N n 17 q 17 Y1 N n N r M O W y ep O 0 «I (O M Q Q • m � N � Z Z U G Z z Z `Z L � U o g Q aQ• m55 Z z `z `z h c9 m� °o e o° N OI NIAb o N Em n.-pi r U O N O V 0 N O 0 f IN O lO o m mao of c �ri vi of O a o e `o V c n m .- M w N N m w N N U y � sN n m m vi oia tom nno 3 0 c7 N . 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M 6J M N N N U m m arm m m m m m o P co O m m o r m N m r inm n m m ni tv is m n mmm m m P P m of o `v rn N r r N m N m m ifJ (O t7 N h p o 0 0 L N N N N U N .- m N c m (QT d st O n f0 O m P N m m O O m P W Atp m P n 6 m O O m m 0 O N f7 O W N O O m r f 7 0 P P N A P L 0 0 o e a ,� in so o m ua U P M m N d P a r Mmn d N N N N U h o o mmr o m m r m o N ro m vi ai m W W O fm0 m O O o rn N m O � m m cn C11 16 °m m N O O o rn d E 3a� = 0 o (if F a W v m °o O N C d U 0 m d � d U U 5 ' r°n 43 n C i "a u 1 D 3 J D D 3 0 N C a W a v m a Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 Development Projects Readers Note: At the time of this analysis, the listing of proposed projects has not been Finalized to confirm projects whose status may differ from those identified from the following resources: Residential Projects Application Log, Winter 2008; City of Lake Elsinore Residential Activity Log and CIS map, January 7, 2007,- and Active New -Home Project Profiles from Hanley Wood Market Intelligence, December 31, 2008. The City has a variety of planned and proposed development projects on file with the City's Planning Department as shown in Table I 1 I -8. Based on a review of current planning projects as of January 2009, the City maintains 21 projects in its development pipeline. Of these projects, 13 are for multifamily homes, such as townhomes or condominiums. The remaining eight projects are for single - family homes. In total, there are applications for a total of almost 3,500 housing units, of which, approximately 60 percent, or 2,100 units, are multifamily homes, while the remaining 40 percent, or 1,400 units, are attached homes. Because 60 percent of all units are proposed as attached, this represents a potential shift in historic residential building patterns. In fact, the City's 40 condominium sales compared to its 138 single - family home sales during 2008 - 22 percent of total sales - noted the highest percentage capture of sales for attached products in the last decade. A few notable projects include: • Pottery Court is located on the southwest corner of Sumner Avenue and Riley Street and represents the sole residential development planned within the Downtown Master Plan boundary at this time. The project consists of 90 for -rent, 1 -3 bedroom units that are all priced as affordable to low- to very low- income households. Monthly rents are anticipated to be between $340 and $750 depending on the size of the apartment. The project was funded through the Housing and Urban Development Department (HUD) HOPE VI Main Street Program, County funding, City Redevelopment Agency funding, small conventional loan, and tax credits. Construction is anticipated to begin in late 2009. • Grand Avenue and Riverside Drive. The project consists of 126 condominiums proposed at the northeast corner of this intersection. The units are proposed with Floorplans ranging from 1,056 to 1,404 square feet. • Roseta Canyon Drive and Central Avenue. This project consists of 121 condominium units proposed at the southeast corner of this intersection. No further details of this proposed community are known at this time. Rental Housing Trends Rental Housing Performance Indicators Over the past 10 years, the City's rental apartment market has seen healthy increases in rent and generally tight vacancy availability. Average annual rents were $639 per year during 2000, while occupancy sat at a very tight 99 percent. Figure I11 -1 shows average annual rents have increased at an approximate eight percent annual rate to $1,037 in 2008. Occupancy rates have fallen from their extremely tight 2000 levels to a more modest rate of approximately 92 percent in 2008. The occupancy decline is due in part to the opening of a large apartment complex Economic & Planning Systems, Inc. 44 45 ) �§ -- LL \! ! E - O j )� /\. \ / \ \ \ })} \ \ \ ! o lo 45 ) - j \ \ \ })} \ \ \ ! o lo \ \ } \)\ \\ \ \) \ \ \ \ \ \ \ \ \ \ 45 ) L( FL D- } . f 0 wo i )\ \ }} � E- \\ \ , ; :, ZE | ! - i \ \ \ 46 a N m d J a U R T CL a � 3 U U) O d a L (Q A r 3 � o c 3 E rn o CL L Q L 5 O r_ iL y Y W J j d Y R J c N a c m t- 0 0 o e e o 0 0 0 0 0 O N O N O N O N p N p W O) m m h h m (p N N 1 h O O N 0 0 N N 0 N 0 0 N p O N N O O N 0 0 N 1 w m p p C \N � N m N � V � � a 69 Vj fR fR EA 63 EH 69 b3 N H3 f9 2 o w a m m 47 Lake Elsinore Downtown Master Plan Market Stody Revised Draft Report March 79, 2009 developed during 2007. Broadstone River's Edge Apartments, located at 2088 East Lakeshore Drive, brought 154 new units, a significant increase, to the City (see Figure I11 -1) explaining the drop in occupancy percentage during 2008. According to RealFacts, the City contains four significant apartment projects including:3 • Broadstone River Edge Apartments • Grand Oaks • Harbor Grand • North Lake These projects are summarized on Table 111 -9, which contains information related to age of the building, current occupancy percentage, current pricing, as well as its unit mix and featured amenities. All of these apartments are located outside of the Downtown Master Plan boundary. Downtown Market Conditions As discussed earlier in the Chapter, falling home prices, sluggish existing home transactions, as well as limited new -home sales are typical of the current housing market conditions regionally, locally, and in the Downtown Area. The housing stock in and immediately surrounding the Downtown Master Plan Boundary is characterized by a diverse set of older housing units, spanning from craftsman bungalows to single- and two -story ranch style homes to a sizable mobile home park one block east of Main Street. There has been no recent residential development within the Downtown Master Plan Boundary, although as noted earlier, construction is anticipated to commence in late 2009 on the 90 -unit affordable housing project, Pottery Court, located within the Downtown Master Plan boundary. As of 2009, the median age of the housing stock in the downtown area is 33 years old with over half of these units constructed before 1980. In contrast, the median age of the housing stock in the City as a whole is 14 years old with approximately 60 percent constructed after 1980. A majority of the housing units in the downtown area are renter - occupied (55 percent) in comparison to the City as a whole (34 percent) and, as indicated by stakeholders, many owners of these renter - occupied units reside outside of Lake Elsinore and have not placed ongoing maintenance as a high priority. Consistent with the residential urban form throughout the nation, Lake Elsinore's downtown area comprises a much greater percentage of multifamily attached units than the City as a whole. Excluding housing units defined as mobile homes or trailers or boats, recreational vehicles, vans, etc., 55 percent of the housing stock in Downtown is represented by multifamily attached units with 2 or more units, the majority of which is represented by multifamily attached units with 3 to 19 units (42 percent). In contrast, as a whole, the City's housing stock is comprised of 34 percent multifamily attached units. 3 RealFacts is a third -party data provider specializing in apartment rental data. 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LL � n m W m a a U W 0 m n Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 Likely because of the older and denser housing stock, the median housing value of owner - occupied housing in the Downtown area is approximately $250,000 compared with a median housing value of $385,000 for the City as a whole as of 2008.4 Most owner - occupied housing units in the Downtown area are estimated to be valued between $150,000 and $400,000 (72 percent). In the City as a whole, the majority of owner- occupied housing units are estimated to be valued between $300,000 and $750,000 (66 percent). With the exception of Pottery Court, current regional and local market conditions will likely impede residential development in the Downtown area in the short term. However, the City is expected to grow substantially over the next 30 years and it is reasonable to expect Downtown can capture a portion of this growth. Residential demand estimates for the City and Downtown are discussed further in the following section. Housing Demand Estimates As indicated in Table 11 -2 in Chapter 2, it is estimated there are 1,400 housing units located within a yz -mile radius of the City's Downtown as of 2008. This analysis projected growth of housing units in downtown through 2035 by utilizing the historical annual average rate of growth between 1990 and 2008 for the Downtown Area (1/2 -mile radius surrounding downtown). As shown in Table 111 -10, this method of projecting future residential growth results in approximately 120 new units by 2013 and 790 units by 2035 or an average of 25. to 30 new homes per year. This absorption pattern indicates an average annual growth rate of 1.7 in Downtown housing compared to 2.8 percent growth for the rest of the City. The Downtown Master Plan provides a structure and plan for the City to revitalize its Downtown. As such, the City may be able to generate Downtown housing growth beyond those based on current demographic projections. Demographic projections do not factor in redevelopment opportunities or the possibility for a high -speed rail stop at the Main Street interchange of I -15, just north of the Gateway District. If, through reinvestment in Downtown and a continuation of the regional acceptance of higher density housing types, Downtown is able to maintain the current ratio of the City's overall total housing units (approximately 10 percent), about 200 units could be located in the Downtown area by 2013 and 1,470 new units could be located in the Downtown area by 2035 (refer to Table 111 -10). This more aggressive scenario for Downtown housing growth projects an annual absorption of 40 to 55 residential units, or an average annual growth rate of 2.7 percent in the Downtown area, equal to the average annual rate of growth in the City as a whole. Table I11 -11 examines the potential housing type breakdown for new housing unit projections for the Downtown and the rest of City for both projection scenarios presented in Table I11 -10. Based on the City and Downtown's current ratios of housing by tenure and "units in structure," it is estimated that 350 to 660 will be for -sale product, while 430 to 800 will be a rental product in the Downtown area. Of the 790 to 1,470 units projected to absorb in the Downtown area, approximately 350 to 660 single - family detached and attached homes are projected to be 4 Claritas Pop - Facts: Demographic Snapshot Report, December 17, 2008. Economic & Planning Systems, Inc, bU ..,, ow.,.,,,,..., o. ,.„,...,„..,AO..=,,..a.,.. ®.... n M N O C p C y p m O Y a R C m E 30 O � C•- o vo� m y doff c N m W 4 Y p F J C @m J p� C C C N Q L M mU ° Q o N W O O L N m O O F � N m J m C C c Q t M mU N ¢ � <o 0 O L N � O O F � m M 0 N 0 N m N O N O N E m 000 r OR n N N r fp m A Ip 1n V M 0 o a orn c+i c+i N r d V N N r 51 000 n r n N N N m O) tp d m N m V m V d M r 0 o e O o ° ai of Ni M A N V o V N O N V O N Nf mnro m a r m m N N N m M h rn v �n m O w CJ N r N N m f O N Nnin m r f D � � r m M N N r Yl m V r r r w c a M 7 O (00 N ,-C4r c C Q m m V u C m 7 C Q C E C C C y E w O m o 3 m 3 R ' Om a ro9 a m c m M O ro rnK ro 7 C E C m�v m m=o 3 a 7 3 a J 0 m m a C o a« o m m c v c c c F m F IL o 3 QF of o a a 51 000 n r n N N N m O) tp d m N m V m V d M r 0 o e O o ° ai of Ni M A N V o V N O N V O N Nf 2 w' m L_ C D a y ro n d E m � 3 m o °- � O O O D y O C y M m c a_ rn c 'm U J O O L C a 3 m p m 3 . O p a a C o C N O O = 5 C m � O ro O m d m C NL• m O 00 m ON w a C wj m y @m o m r a C6 E6mm CL N W r m m C C m C 6i O W �$ Q y L C U ro 0 3 (p .o o_ o N y Ola J m m C y Y @ y U c m a U o p c 'o om m O y ❑ c 4. O N 0 N a n a w a v N a mm� m n W m m N N N m n r m o rn m 1p M M IZ N N N N V W N T W � m r N cc� lc M d � r � w 'c a M O O O O m It R L t Q m m u C w Q C E C C C y m w O E a O C o a m c a ro R ' N C E C L C - d X m 0 X a C _ K mWUO o uWUO o c F m F IL o a 2 w' m L_ C D a y ro n d E m � 3 m o °- � O O O D y O C y M m c a_ rn c 'm U J O O L C a 3 m p m 3 . O p a a C o C N O O = 5 C m � O ro O m d m C NL• m O 00 m ON w a C wj m y @m o m r a C6 E6mm CL N W r m m C C m C 6i O W �$ Q y L C U ro 0 3 (p .o o_ o N y Ola J m m C y Y @ y U c m a U o p c 'o om m O y ❑ c 4. O N 0 N a n a w a v N a DRAFT Table 111-11 Lake Elsinore Downtown Market Study Lake Elsinore Housing Demand Estimates by Product Type (2008 -2035) Product Type Remaining Citywide Demand Estimates [1] Low High Downtown Demand Estimates [11 Low High Housing 34% Rental Housing 55% Rental Housing Single Family Single Family For -Sale Housing 8,706 9,155 354 660 Rental Housing 4,485 4,716 432 807 Total All Housing 13,192 13,872 786 1,466 Demand by Product Type Single Family Single Family Detached 7,860 8,265 305 569 Single Family Attached 847 891 49 91 Subtotal Single Family 8,706 9,155 354 660 Multifamily 2 units 348 366 69 129 3 -19 units 3,095 3,254 334 622 20 and more units 1,042 1,096 30 55 Subtotal Multifamily 4,485 4,716 432 807 Total Demand 13,192 13,872 786 1,466 housmg_demand" Sources: Claritas (2008) and EPS. [11 Based on the following assumptions obtained from Claritas as of 2008 Citywide Downtown 66% Ownership Housing 45% Ownership Housing 34% Rental Housing 55% Rental Housing Single Family Single Family 60% Single Family Detached 39% Single Family Detached 6% Single Family Attached 6% Single Family Attached Multifamily Multifamily 3% 2 units 9% 2 units 23% 3-19 units 42% 3 -19 units 8% 20 and more units 4% 20 and more units Percentages were calculated after excluding housing units defined as mobile homes and trailers, and boats, RVs, and vans. Pmpared by EPS 112612009 P�reaimtermurrnen ,w,eoo,,,,ro,,,,,unrso eyvo,r >hvero3,,,oea vn_os,n 52 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 absorbed, while 430 to 810 multifamily units are projected to be absorbed by 2035. It is likely that an emphasis on increased density and multifamily housing products within the Downtown Master Plan will skew these estimates in favor of a greater number of multifamily units as are estimated in this analysis. Housing Market Conclusions The City of Lake Elsinore has potential to attract and retain residents in Downtown. EPS has estimated that there will be demand for at least 790 new residential units in Downtown through 2035, and possibly as many as 1,470 units. The high end of this estimate could be achieved through successful creation of amenities and retail /entertainment opportunities, as well as district identities. In addition, the development of a high -speed rail station at the Main Street interchange of I -15 would be a further enhancement potentially bringing more business and residents to the area. For the near term, it may be advisable to focus on the delivery of affordably priced rental housing in Downtown. This strategy would meet the economic profile of existing Downtown residents, and funding for such affordable development may be more available in the near term than funding for risky for - profit speculative building during these difficult economic times. Moreover, affordable multifamily housing is frequently built at urban densities that can establish the tone for additional urban development in the future, at market -rate prices. Economic & Planning Systems, Inc. 53 4. RETAIL MARKET ASSESSMENT This chapter provides a general overview of trends occurring regionally, locally, and in downtown Lake Elsinore. Following a review of retail trends and other retail market performance indicators, this chapter estimates potential future demand for downtown retail space. As indicated in this chapter, increased population and household income growth in the City and in downtown suggest demand for downtown retail space will increase over the next several decades. Additional demand for retail space in downtown will depend on a targeted approach to diversifying the current retail tenants and creating a unifying brand for downtown. Regional Retail Market Conditions Retail development is inextricably tied to population and household income growth. As described in Chapter 2, the populations of Southern California, Riverside County, and Lake Elsinore have grown substantially over the last couple of decades, with Lake Elsinore having the highest growth rate of these three geographies. Further, the populations of these geographies are projected to grow at a high growth rate over the next several decades, with Lake Elsinore adding nearly 50,000 residents and Western Riverside County adding over 1.0 million residents by 2035. Household incomes have also risen dramatically, with all comparative geographies showing considerable growth in upper income levels. Lake Elsinore's median household income rose by 36 percent between 1990 and 2000, higher than neighboring communities (with the exception of Corona), as well as Riverside County and Southern California. Although Lake Elsinore's median household income of nearly $42,000 remains the lowest in comparison to these geographies, growth in household incomes indicate that total spending power has also expanded. The Inland Empire, which witnessed rapid population and accompanying retail growth in previous years, has not been immune to the nation's current economic recession. A rise in home foreclosures coupled with tighter loan approval guidelines have limited the number of new buyers in the area and ultimately contributed to a slow down in population growth. Mirroring national trends, housing prices have decreased, which in turn has increased the number of families who are able to afford houses. Area economists are hopeful that the existing supply of newly affordable homes will restore population growth to the previous levels that qualified the region as one of the fastest growing regions in the nation. This in turn, will bolster demand for commensurate retail development throughout the region.5 Many residents, however, are still unable to purchase a home, resulting in a healthy rental market. Many of these renters comprise an influx of younger, white - collar professionals migrating inland from Southern California's coastal communities. This demographic desires newer, Class'A' apartment communities near a business district. This demographic of younger professionals demanding luxury apartments also demand high -end retail centers. As such, several high - profile retail centers in the region's more affluent cities have been developed, including Victoria Gardens in Rancho Cucamonga, Dos Lagos in Corona, the Galleria at Tyler 5 CB Richard Ellis, Marketview Inland Empire Retail, Fourth Quarter 2008. �,..... _ y aynierns, Inc. 54 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 expansion in Riverside, and The Shoppes at Chino Hills, a one - million- square -foot outdoor mall designed to resemble a downtown shopping district.6 One of the most prevalent retail models in the region is the Power Center, a community- serving retail center dominated by several big box retail anchors (e.g., discount store, warehouse clubs, and home improvement store)_ Construction of power centers will endure to narrow the gap between population growth and retail amenities. While larger format retailers (e.g., Wal -Mart) and other big box retailers already active in the region will expand cautiously amidst the current economic conditions, grocers - both newcomer Tesco, Britain's largest grocery company and fourth largest retailer in the world, and WinCo Foods, a discount grocery retailer - are projected to more aggressively pursue new locations in the region. In the region's more established cities, mixed use concepts are evolving from theory to practice, combining affordable housing and residential apartments with hotels, office, and mid to higher tier retail space. Such projects are being considered, in particular in cities' central business districts (CBDs), to accomplish numerous goals: filling the need for entry-level housing, allowing residents to live close to where they work and shop, providing the opportunity for developers to maximize profit margins, and revitalizing downtown districts.7 Local Retail Market Conditions Table IV-11 shows the performance of several Inland Empire submarkets. Lake Elsinore is included in the "South Riverside County" submarket, which has one of the highest average triple - net lease rates for retail space, and one of the lowest vacancy rates out of all Inland Empire submarkets.$ Net absorption in the Inland Empire slowed significantly during the 4`" quarter of 2008; while most submarkets experienced negative net absorption, the South Riverside County submarket experienced the highest positive net absorption at nearly 550,000 square feet. Further, despite representing about 15 percent of the Inland Empire's overall supply of retail space, the South Riverside County submarket contained nearly 30 percent of all new construction activity in the region. Retail Sales Indicators Total taxable sales in the City steadily and rapidly increased over the period 2001 through 2007, at an average annual rate of nearly 11 percent, as shown in Table l 11 -11 in Chapter 3. As of 2007, taxable sales in Lake Elsinore equaled approximately $723 million, an increase of 20 percent from the previous year. Similarly, retail taxable sales increased at an average annual rate of almost 12 percent over the same time period. Retail taxable sales in 2007 equaled $660 million, nearly a 30 percent increase relative to the previous year. This growth in total and retail taxable sales outpaced all neighboring jurisdictions, with the exception of Murrieta, as well as 6 Retail Market Trends Inland Empire, Grubb & Ellis Research, Second Quarter 2007. 7 Ibid. 8 A triple -net lease is a lease in which the lessee pays rent to the lessor, as well as all taxes, insurance, and maintenance expenses that arise from the use of the property. Economic & Planning Systems, Inc. » .•. a- •�.- .�.��„w�u•, >.. :._�..�..,. Table IV -1 DRAFT Lake Elsinore Downtown Market Study Inland Empire Retail Market Indicators [1] Monthly average asking NNN lease rate per sq. ft. [2] Lake Elsinore is located in the South Riverside County submarket Preparedby EPS 1123/2009 P:I16pW11810fakeEh4p,p N,hypy, MMS�WyUWNS11BiNmWa' f./).O3.ah 56 Quarterly Net Submarket Total Retail Vacancy Absorption Sq. Ft. under Avg. Lease Sq. Ft. Rate (Sq. Ft.) Construction Rate [1] East End High Desert 37,499,053 14.8% (1.024,627) 950,587 $2.10 Low Desert - 7,331,023 13,363,497 9.3% 7.1% (89,673) 423,000 $2,26 South Riverside County [2) 16,686,610 6.5% (105,248) 546,272 1,238,813 1,293,541 $2.51 West End 28,807,535 6.0% 173,675 565,406 $2,q3 $2.35 Total 103,687,718 9.6% (499,601) 4,471,347 $2.33 Sources: CS Richard Ellis Retail Market index Brief Q4 2008. "retail•• [1] Monthly average asking NNN lease rate per sq. ft. [2] Lake Elsinore is located in the South Riverside County submarket Preparedby EPS 1123/2009 P:I16pW11810fakeEh4p,p N,hypy, MMS�WyUWNS11BiNmWa' f./).O3.ah 56 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19. 2009 Riverside County and Southern California. Despite possessing the lowest total and retail taxable sales, the City's annual rate of growth has continued to climb since 2001. This is especially noteworthy given all but one proximate jurisdiction, as well as Riverside County and Southern California experienced a downward trend in the rate of total and retail taxable sales beginning in 2005 through 2007. As indicated in the April 12, 2007 Downtown Market Study memorandum prepared by MuniFinancial, the taxable sales generated from the core downtown area (Historic District) was approximately $30 million for calendar year 2006, representing 4 percent of the City's total taxable sales in that year. Also stated in the memorandum, key development projects including the Lake Elsinore Marketplace, Lake Elsinore Square, Elsinore City Center, and Canyon Hills Marketplace were instrumental in increasing overall retail taxable sales in the City but may have had an impact on the taxable sales generated by the Historic District. Indeed, from 2005 to 2006, taxable sales in the Historic District decreased almost 7 percent. Recent and Planned Development Several big box retail centers recently opened in the City adjacent to I -15 on Central Avenue. These big box retail centers, described below, contributed to substantial increases in retail taxable sales for the City: • Lake Elsinore Marketplace. Situated on 46.7 acres, this approximately 460,000 square foot rental retail center opened in 2006 and is anchored by four major retailers: Costco, Lowe's, PetSmart, Staples and Bed, Bath & Beyond. This center was estimated to generate 400 to 500 new jobs and $120 million in retail sales ($260 per square foot) during its first full year of Dperation.9 • Home Depot Anchored Center. Also opened in 2006, the Home Depot anchored retail center also includes major tenants OfficeMax, Petco, 99 Cents Only, Walgreens, and Big 5. The Home Depot and accompanying garden center comprise almost 140,000 square feet and is estimated to generate 125 jobs and $43 million in annual store sales. • Target Anchored Center. South of Home Depot on Collier Avenue, a Target store also opened recently. With 156,000 total square feet, the center also contains a Bank of America branch, Gamestop, Fantastic Sams, and several fast food restaurants. • Canyon Hills Marketplace. With nearly 150,000 square feet of gross leasable area (GLA), this center opened in 2006 and is anchored by Longs Drugs. Other tenants include a Bank of America branch, Big O Tires, Chevron, and numerous fast food restaurants. The center is located three miles east of I -15 on Railroad Canyon and Canyon Hills roads, within the 4,200 unit master - planned community of Canyon Hills. As shown in Table IV -2, there are several retail projects in various -planning stages, none of which are located within the Downtown Master Plan boundary. The most notable is the Shoppes at Central Crossroads, a 127,000 square foot retail center anchored by two major retailers and 9 CIC Research, Inc. Downtown Historic Lake Elsinore Market Feasibility Study, February 21, 2006. Economic a Planning Systems, Inc. 57 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79. 2009 two dozen smaller retailers and located along the I -15 and Highway 74 corridor. The retail center will increase the retail options available outside of the Downtown area and reinforces the notion that Downtown retail must reflect a unique tenant base to continue to attract patrons. The project, however, was scheduled to open in Fall 2009 or Spring 2010, but is being postponed until 2011 because of current economic conditions.70 Including this project, retail projects totaling 156,000 square feet of space have been either approved or are pending approval. Downtown Retail Market Conditions The central business district (CBD), or Historic District, is the heart of downtown and resembles a typical "Main Street." Although the Historic District boasts the elements of a successful and thriving retail center (e.g., pedestrian - friendly, landscaped sidewalks), factors such as inconsistencies in downtown merchant's days of operations and business hours, the perception of inadequate or inconvenient parking, a perception of high crime in Downtown, and a high cost of operations have resulted in numerous vacant storefronts and marginal sales performance. Based on projected population growth and trends in increased household incomes, the Historic District, in addition to other districts in the Downtown Master Plan has significant potential to attract and retain additional retail tenants. Current Retail Market The Downtown Master Plan boundary contains a mix of residential, commercial, and civic land uses. In the Historic District, the mix of tenants is diverse but limited and includes antique retailers, small professional users (e.g., graphic design), civic and cultural uses (e.g., City Hall), and restaurants offering a range of cuisines. The pedestrian - friendly Historic District resembles a typical "Main Street" and features: small, primarily single -story retail outlets and small office space; a distinctive architectural style; diagonal on- street parking; wide, landscaped sidewalks with mature trees; and a narrow 2 -lane street. Most retailers located in downtown are owned and operated independently and not affiliated with a national or regional chain. As shown in Table 11-10 in Chapter 2, retail jobs in the City's downtown (roughly equivalent to a 1/2 mile radius surrounding the intersection of Main Street and Peck Street) account for approximately 9 percent of total jobs downtown. Employment at retail businesses in downtown is concentrated in food - related industries (e.g., food stores, eating and drinking places), miscellaneous retail establishments (including specialty retail such as sporting goods and jewelry), and gas stations. Table I1 -11 in Chapter 2 provides a listing of businesses located within the Downtown Master Plan Boundary. Currently, there are 43 businesses associated with retail categories. Correlating with the highest number of jobs, the highest concentration of individual businesses in downtown are food - related followed by miscellaneous retail, comprising such businesses as antique dealers, book dealers, a consignment shop, a jeweler, and specialty retail (e.g., sports, party supplies). 71 "Lake Elsinore shopping center's opening postponed." The Press Enterprise, August 18, 2008. & Planning Systems, Inc. _ 58 i- m m K a m � h T W a m o c N Q O m m m w m m o m in O ¢ y0 'z z ¢ a a a £ r oN J Z Z Z n Z Z 2 o r W N W � � F 0 V d `a 0 A n 4 W a m d m m K T W a - C C m W 7 O W V 0 V d d O d (11 @ U W C (n a` z z ¢ zuiU w a c Q m a m c c c LL L C II O m Z N N J m d ° N F d Q 6 U m. m a d U o rn m r m 3 m J ' N EL d U c c C �j RJ W W C [y] U) J d W o m m �' d N d 6 m W °- E 'C y p II •'� f m d d ai `to K'o mt: aU �$ c m 'om a °c ° CL K QU DU) m W ILL W a V V O E R th N W o Z O U K 0' � Of K w O_ m"° O U U U U U U U an d 't p r N N O in O m O r O rn O 02 p, W R ui W- 0 O O O O O R R ` m II Y O O O O O r Q p p I-• J d d N N N N N N N w U F- U) 59 `a 0 A n 4 W a m d Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 An adequate amount of parking is integral to the vitality of downtown_ The Historic District offers a limited amount of free parking in the form of on- street spaces, and city -owned lots located behind Main Street storefronts, as well as on cross streets 1 to 2 blocks from Main Street. According to various stakeholders interviewed in conjunction with this analysis, there is a perceived dearth of parking options downtown. Business owners prefer their customers to have convenient access between their car and the business they are patronizing. Stakeholders' opinions were varied, however, regarding potential solutions to providing additional parking; some stakeholders advocated construction of a centrally located parking structure while other stakeholders supported securing additional lots by the City for public parking usage. Most stakeholders concurred that parking in downtown should remain free, although many recognized it may be necessary to fund the repayment of constructing a parking structure with user fees. Vacant and underutilized parcels permeate downtown. Within the Downtown Master Plan boundary, 46 percent of parcels have been identified by the City as vacant. In the Historic District, approximately 16 percent of parcels have been identified by the City as vacant. Further, there are several underutilized parcels: parcels with existing but unoccupied structures in the Historic District. Map IV-1 provides an overview of vacant parcels within the Downtown Master Plan boundary. As of December 2008, lease rates for Historic District retail outlets are approximately $1.00 per square foot per month, a full $1.00 to $1.50 below average monthly lease rates elsewhere in the Inland Empire retail market." Although lease rates are reasonably low in comparison to average lease rates elsewhere in the region, several stakeholders indicated that the high vacancy rate may be, in part, attributable to extraordinarily high City water fees in particular for restaurant uses_ One business owner reportedly closed a popular new restaurant - the Main Street Pub, open for approximately 1 year - because operating costs, including City water fees, far exceeded revenues. According to stakeholders, one significant challenge facing downtown is the perception that downtown has a high crime rate. Indeed, as discussed in Chapter 2, the property crime rate per 1,000 residents significantly exceeds neighboring jurisdictions, Riverside County, Los Angeles and San Diego metropolitan statistical areas, and the statewide average. In addition, the violent crime rate also far exceeds proximate communities, nearly double of the violent crime rate in Corona, Murrieta, and Temecula. Downtown business owners indicated that undesirable activities including drugs and prostitution, coupled with a substantial homeless population and vandalism all contribute to diminished demand downtown. The City Park that bookends the southern boundary of the Historic District has attracted a 24 -hour population of homeless, drug addicts, and prostitutes, deterring residents from using a valuable City amenity. Further, the neighborhood to the east of downtown is in decline. The housing stock is older and consists of a majority of renter - occupied units (55 percent). As indicated by stakeholders, many owners of these renter - occupied units reside outside of Lake Elsinore and have not placed ongoing maintenance as a high priority. 11 LoopNet, Inc. Retail Listing Report, ]anuary 14, 2009. Economic & Planning Systems, loc. 60 Map !V -1 City of Lake Elsinore Downtown Masterplan Project � r� �,' ;0^� a f IQ• / f 2 ] i / 1 a If ti � ` �,.• <3` 30I to / © Histori ties Single Fami Multi Family - Mixed Use - Commercial - Commercial Office - Industrial Public Institution Public Utility Vacant OMain Street Overlay z s4 n� 4`m B 3 An M N\\\ wua+y CITY OF .m a nrs Existing Uses in Downtown Masterplan LAKE L§LSIIYOIZE (includes Vacant Parcels) �a UmAAE EA.EME 1.Vn�jLUVaNG,3 GYbldebaaeG6 aele�tlrc M' OW take E /sinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 It is of paramount importance both to the City and current owners to revitalize downtown and increase demand for downtown shops and restaurants. However, inconsistencies in downtown merchants' days of operation and business hours, especially in the evening, in addition to limited retail options and vacant storefronts have prevented the goal of revitalization from being achieved_ The City, Downtown Merchants Association (DMA), and Chamber of Commerce have spearheaded several events to attract additional demand including: a farmers' market; monthly car show (between the months of April through November); monthly Art Walk; 4th of July Celebration; Safe Candy Night; and Winter Fest. In the last five years, the number of events downtown have increased and successfully attracted additional people to downtown. However, stakeholders suggested improved coordination, increased budgets, and a unifying vision to tie these events to downtown have the potential to attract a still greater number of potential shoppers to downtown to support existing and new businesses. Future Retail Market Demand Increases in citywide and downtown population and household income growth will influence demand for retail in downtown Lake Elsinore. As shown in Table 11 -2 in Chapter 2, Lake Elsinore is projected to add over 45,000 residents (representing an annual growth rate of 2.5 percent) by 2035. The household incomes of individuals residing in the City and downtown are also likely to continue to rise, thereby increasing total spending power and demand for additional retail in downtown. As described in Table IV -3, the population growth anticipated in Lake Elsinore may increase support for downtown retail and service commercial development by 16 percent in 5 years (by 2013) and 61 percent in by 2035. Currently, annual sales per square foot for existing - retail and service commercial businesses in downtown are estimated to be about $140 (refer to Table 11 -11). However, it is likely that new retail businesses would require higher sales per square foot to remain fiscally solvent.12 A range of $200 to $300 in sales per square foot would result in demand for approximately 9,000 to 13,000 square feet of retail in five years (2013). By 2035, a range of $200 to $300 in required sales per square foot would result in demand for approximately 63,000 to 95,000 square feet of retail, reflecting an average annual absorption of 2,300 to 3,500 square feet. Various factors could influence additional retail demand beyond what is estimated in this market analysis. These factors are summarized as follows: • Demand for future downtown retail is a direct result of estimated future population growth and their buying power. Thus, demand for additional retail could be achieved with increased local population growth and higher spending per capita on retail goods downtown. • The introduction of a boutique hotel in the Waterfront District coupled with unique tenants, and unique site and architectural design will attract additional consumers who reside locally and outside of the City thereby increasing demand for additional retail space. 12 Estimated sales per square foot assumptions of $200 and $300 were derived from the 2008 Urban Land Institute Dollars & Cents of Shopping Centers based on future tenants likely to locate downtown (e.g., coffee shop, bookstore). . Economic & Planning Systems, Inc. 62 LL Q N O N r a T � .O N 3 R N y C s c `m 3 c c o � c � m o � O j mLL O a m � W c ° m 9 Y � F J U « m � Em L O O y m N j m U � 7 E IL a IL m � �y m m Q m N V m° E m Mrn oio� o v m r NNNIh w r r W m � O W f9 v m m m O V O IF N m�tnW� N N M N V O N V V7 O cov om o V3 O O CD M W N � 0 0 0 0 0 m N o 0 O l0 N O N p N N C f q O r N O N V Od NN1: r�l� my a �nm m F9 fA fR Vl N Q m 11 U R m m a a r F 3 3 � O O , w C C 0 0 N c 3 v m C O C � m ro- ° m O V N a E 1< <! u c o `m m m OE o M o% o m E m m E 3 c 3 c E m o m 'SUN m mwppo U 0=a1 330 dmc o'c5cE0 > E > Eyo E 0 c UV3 m —mole m c Y c mcm3 m mNm pW. 2 m m m a «¢m«m wm310 mc... -- a=� Ems= m E J ° m J N 3 y W OJW W m m u of wo W W 0 0 0 0 0 0 (7 N (O OI 0 0 O O O O V (O O O O O v N N (7 O O O �O O O O O O Of l0 10 N m.- 0O N W - O O m m � F F , w N LL v m m E m rj a E 1< <! 0 U O m m ti u N m O m ac E 3 m E m ° m z LL d.:Ev °"mod m QU N c Y c c O O a do a� mw� ro Ex'xo E 3°a W 53 O m w m n m « � V C m U C y p) a O U O U O O Q o O C w m L T m Eo n N 0 C L m O m w U m W - R M i m R 0 3rnm U p m .6 q m O L m C m O O Ct 2y � m 22 n m 0 m N T O p E C C N O Op rn t ma m m 4- ° m E O �a =m m m b a w m U : TOpm m y Uj N R c c c m 3 U C O m'_' 2 ° w 3 m 3 E U N m 9 m U m U V O Z C O y O T m N m T m @a C = C o u Eo d. m — a ? p Z 0 O U y mtm. y o. U m N m o y o anCcE o p n > m m J W a `o d big T W n m o a m ti m w amm c d y y E d m y rn 7 y *6 y L m a w o y ro m E m m m O m m C U U H m N Y 6 D E g 8 0 5R S g a m 4 W a 0 a Cake Elsinore Downtown Master Plan Market study Revised Draft Report March 79, 2oog • A high -speed rail station located near the Main Street exit of 1 -15 has the possibility of significantly influencing additional retail demand, provided there is convenient access from the rail station to the Historic District. Retail Market Conclusions The City of Lake Elsinore has a significant amount of potential to attract and retain retail tenants in downtown. Within the Downtown Master Plan boundary, the Historic District features solid elements of a thriving downtown. It's narrow, tree -lined Main Street, and pedestrian- friendly urban design aesthetic offers a canvas for revitalization, with a focus on connectivity between other draft Downtown Master Plan districts, the lakefront, and other proximate amenities (e.g., the Lake Elsinore Storm Class A baseball stadium). As the commercial core of the City's downtown, the Historic District should capitalize on its unique charm as an authentic "Main Street." Nationally and regionally, developers are constructing retail centers that are designed to mimic the feel of shopping along "Main Street." Urban design guidelines imposed by the City in the Downtown Master Plan and in particular the Historic District should complement the existing style of architecture, street furniture (e.g., benches), and landscaping, though strict adherence to past architectural styles and materials is not recommended. Future projections of population and household income growth as described in Chapter 2 indicate there will be retail demand in the City and in Downtown. This analysis estimates between 9,000 and 13,000 square feet of retail (and accompanying service commercial) development may be demanded over the next 5 years (by 2013) within the Downtown Master Plan boundary, By 2035, it is estimated that between 63,000 and 95,000 square feet of retail and service commercial space may be demanded. Demand for additional retail space could be achieved through higher growth in population and retail spending power than what is estimated in this study. Tenants unique to the City or region may influence the ability of the downtown to compete with proximate jurisdictions and competitor markets (e.g., Temecula, Murrieta) and capture additional consumers locally and regionally. In addition, the development of a boutique hotel in the Waterfront District and a high -speed rail station at the Main Street exit of I -15, The Historic District presents opportunities for enhanced retail offerings. Currently, there is a concentration of jobs and individual businesses in food- related tenants (both food stores and eating and drinking establishments): The Historic District has accommodated two successful, recently opened food - related businesses: an upscale Italian restaurant; and a high -end bakery. Both businesses are thriving and have been able to attract business from outside of Lake Elsinore, bringing new patrons into the Downtown area. Capitalizing on the success of these two businesses, the Historic District might be well by additional, similar food -related tenants, creating a niche of upscale, quality dining options that attracts additional local, as well as regional patrons. At least in the short term, it is anticipated that retail development will cater to the current and future residential population in Downtown and throughout the City. Retail development will likely Economic & Planning Systems, Inc. Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 be primarily local- serving, providing everyday goods and services required by local residents. As discussed in Chapter 2, the current population surrounding downtown is composed of lower income families with young children and this population is anticipated to continue to influence the retail goods and services offered in downtown (e.g., demand for family and value- oriented businesses such as a toy store or child care services). A successful example of a typical "Main Street- revitalization effort is Park Street in Alameda, California. With a population of roughly 80,000 people, Alameda is similar in size to what Lake Elsinore is expected to become in coming decades. Although surrounding demographic characteristics differ from those in Lake Elsinore, the types of tenants found along Park Street might serve as a benchmark for which Lake Elsinore could strive to create a thriving Main Street of their own. Park Street, like downtown Lake Elsinore, includes several antique- oriented retailers, but also includes hundreds of additional local- serving businesses offering retail goods and services. Retail and service commercial tenants found on Park Street, that are limited or absent from the current tenant mix of Lake Elsinore's downtown include: • New book store • Toy store • Drug store • Bath and skincare shop • Specialty food store (e.g., wine, cheese) • Dry cleaners and alterations shop • Fitness /yoga /martial arts studio • Craft /fabric store • Shoe store • Women's /children's apparel These Park Street businesses compete with other more traditional shopping centers elsewhere in Alameda, including Power Centers such as those developed in Lake Elsinore. Park Street has a newly constructed off - street parking garage, as well as public surface parking lots and on- street parking. The City has recently completed a publicly subsidized historic movie theater renovation and expansion, and Alameda's City Hall, main library, and similar civic facilities are one block off of Park Street. This example highlights the success of some of the features that Lake Elsinore has considered in revitalizing their Downtown. Although mixed use projects are an untested prototype in the City, this type of development is gaining traction in the region and is highly appropriate for downtown. Residential mixed use projects that comprise ground floor retail and upper story residential dwelling units should be focused in the Garden District and directly south of the Historic District. Commercial mixed use projects, combining ground floor retail with upper story office spaces should be focused in the Historic District along the Main Street frontage. Given the mixed use project is an untested product in the City and lease rates for retail development are low relative to retail lease rates in the region, it will be important to evaluate the financial feasibility of such a product to determine if achievable rents exceed the cost to construct this type of development. As discussed previously in this chapter, the Downtown is faced with a significant challenge of crime, vandalism, and an evident homeless population. Efforts to revitalize downtown should include a strategy to address these challenges. One such strategy is the implementation of a business (or property) improvement district improvement district), in which business or property owners pay an annual assessment in return for enhanced municipal services such as public safety and ongoing maintenance (e.g., graffiti abatement, litter removal). In addition, an improvement district could facilitate the creation of marketing and public relations materials that Economic& Planning Systems. Inc. 65 ,,,., m,,.,...,,,.., ..„,.,,,.�,,,w,b�.. = „ao.�no..� Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 present a unifying vision for downtown retailers and events. Further feasibility analysis is required, however, to determine if the additional operational cost would be a bearable financial burden for downtown businesses. Economic & Planning Systems, Inc. 66 / E M R E SSESSME As described in Chapter 2, because of its proximity to I -15, the Gateway District of the Downtown Master Plan envisions the eventual development of Class A office space. The office tenant types likely to locate in this district include locally serving businesses concentrated in health, educational, finance, and business services. Other districts of the Downtown Master Plan will likely accommodate future office tenants similar to existing office- related businesses. Regional Office Market Conditions As of 3`d quarter 2008, the Inland Empire office market comprised 25.9 million square feet of office development. The South County submarket, which includes the City, as well as proximate jurisdictions to the south (e.g., Murrieta, Temecula), accounts for about 8 percent of total office supply in the region with 2.1 million square feet. As shown in Table V -1, the South County submarket incurred the highest vacancy rate of all submarkets at nearly 23 percent, and the region as a whole also had very high office vacancies (20 percent). High vacancy rates throughout the Inland Empire, which are anticipated to surpass 24 percent in 2009, are largely attributed to a continued pattern of tenant space consolidation in addition to tenant vacancies resulting from the economic downturn.13 High vacancy rates have shifted the market power from landlords to tenants, which has yielded additional concessions and tenant - friendly lease terms (e.g., higher tenant improvement allowances, discounted lease rates, free rent) and reduced effective lease rates in the region. Indeed, regional trends indicate that Class A lease rates have declined nearly 3 percent since 2007, while Class B lease rates have declined approximately 7 percent.14 15 These declining lease rates though have attracted several office tenants including local insurers, credit unions, and government agencies who expanded their presence in the region and helped offset negative absorption. As of 3rd quarter 2008, average monthly lease rates for Class A office product were $2.19 per square foot for the region as a whole, while the South.County submarket average monthly lease rate was slightly lower at $2.15 per square foot. Average monthly lease rates for Class B office space were slightly higher for the South County submarket ($1.81 per square foot) compared to the regional average ($1.76 per square foot) (refer to Table V -1). 13 Office Market Trends, Inland Empire. Grubb & Ellis Research, Fourth Quarter 2008. t4 Ibid. 15 As defined by Urban Land Institute, Class A space can be characterized as buildings that have excellent location and access, attract high quality tenants, and are managed professionally. Building materials are high quality and rents are competitive with other new buildings. Class B buildings have good locations, management, and construction, and tenant standards are high. Buildings should have very little functional obsolescence and deterioration. Class C buildings are typically 15 to 25 years old but are maintaining steady occupancy. . Economic a Planning Systems, Inc. 67 1 1 m°' 1° 1 ° —"__ Table V -1 Lake Elsinore Downtown Market Study Inland Empire Office Indicators DRAFT Total 25,919,829 19.9% (24,366) 1,593,132 $2.19 $1.76 Sources: Gmbb & Ellis Office Market Snapshot Inland Empire Q3 2008 and EPS. Office [1) Monthly average asking full service lease rate per sq. ft. [21 Lake Elsinore is located within the South County submarket Preparedby EPS 112312009 W %f Hp�'q 18f 09lske flNmm gn„r:own yN Sf Wy1NMek V Bf p3 mMel t.f ).03.rts Quarterly Net Submarket Total Office Vacancy Absorption Sq. Ft. Under Avg, Lease_ Rate [11 Sq. Ft. Rate (Sq. Ft.) Construction Class A Class 6 Airport Nigh Desert 7,707,731 19.4% 3,979 568,964 $2.18 $1.86 Riverside 700,782 8,285,728 19.0% 21.8% 7,665 13,854 N/A $1.65 San Bernardino - 5,635,793 17.2% 35,665 (31,714) 687,383 0 $2.44 $1.82 South County 121 2,129,171 22.6% (28,861) 292,659 $1.82 $2.15 $1.58 $1.81 West 1,460,624 18.6% (11,100) 30,272 $2.46 $1.71 Total 25,919,829 19.9% (24,366) 1,593,132 $2.19 $1.76 Sources: Gmbb & Ellis Office Market Snapshot Inland Empire Q3 2008 and EPS. Office [1) Monthly average asking full service lease rate per sq. ft. [21 Lake Elsinore is located within the South County submarket Preparedby EPS 112312009 W %f Hp�'q 18f 09lske flNmm gn„r:own yN Sf Wy1NMek V Bf p3 mMel t.f ).03.rts Lake Elsinore Downtown Master Flan Market study Revised Draft Report March 79, 2009 Reflecting the conditions of the national economic recession, the region's unemployment rate reached 9.5 percent in November 2008, surpassing the average statewide and national unemployment rate of 8.4 percent and 6.3 percent, respectively. Thus, demand for new office space in the region is low. With 1.6 million square feet of office under construction, there are just a few projects remaining in the pipeline and there were no new major construction starts in 4`h quarter 2008.16 Riverside and Ontario - the heart of the region's office market - may weather the current economic conditions better than elsewhere in the region. Both cities boast an established office district, a large, well - educated labor pool, quality-of -life amenities attractive to prospective office tenants (e.g., cultural and retail amenities), and convenient accessibility to other Southern California communities. Economists predict a slow recovery for the office market as factors such as regional home prices and employment levels are projected to continue to worsen through late 2010 or early 2011. The future of the office market in the region is anticipated to be driven by office tenants who cater to the local population's 4.2 million residents (e.g., insurers, for - profit educators, lawyers). In addition, significant demand for medical office and healthcare- related tenants is projected as the first wave of baby boomers turn 65 in 2011 resulting in a swelling of the region's senior population over the coming decades. As discussed in Chapter 2, there were almost 1.3 million jobs in Riverside County as of 2006 (see Table 11 -9) according to the State's Employment Development Department (EDD). The highest percentages of office - related jobs in the County were concentrated in the government, professional and business services, and educational and health services industries. By 2016, the County is projected to add about 212,000 new jobs (approximately 21,000 jobs annually). The current economic environment may have an impact on the total jobs added to the region but it is important to note the key growth industries for the region over the next ten years are the same industries as those composing the region's highest concentration of office - related jobs. As shown in Table 11 -9 in Chapter 2 the office- related industries of government, professional and business services and educational and health services industries are estimated to experience the highest growth, both in absolute jobs and on a percentage basis, corresponding to the regional forecast described previously. Local and Downtown Office Market Conditions Current Office Market Office space in the City of Lake Elsinore is composed of buildings that house office tenants only (primarily located outside of the Downtown area) and small, professional, office users housed in Downtown and neighborhood strip centers. According to several brokers contacted in conjunction with this analysis, there are nine office buildings in Lake Elsinore (categorized as Class B and Class C office space) comprising approximately 123,000 square feet of space (excludes office space located in Downtown and neighborhood strip centers). These office buildings, which are largely characterized as older structures some of which have obsolete functionality, have a vacancy rate of over 60 percent and a monthly lease rate of $1.60 per 16 MarketView Inland Empire Office, CB Richard Ellis, 41h Quarter 2008. Economic& Planning Systems, Inc. 69 ., ,.�,..�.,�tr..�•�+���e� <�m���w+� Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 square foot. Excluding the two most recently completed office structures in the City, the vacancy rate is lower (40 percent) but the average monthly lease rate is also lower ($1.22), which is substantially lower than the regional average lease rate of $1.76 per square foot." A review of office space for lease indicates a total of 50,000 square feet of Class B office space is available in the City, a majority of which is represented by the newly constructed office and medical office space, The Plaza at Lakeview. Completed in October 2008 and with convenient access to I -15, The Plaza at Lakeview offers 67,000 square feet of office and medical office space in two structures. These two buildings are concrete tilt -up construction that resembles Class A office space from the exterior. Pre - leasing has been available since 2006 but, currently, the office space is 20- percent leased or sold and the medical office space is 40- percent leased or sold. Although there has been considerable interest from potential tenants of this space, the listing broker estimates it will take at least 12 months to fully lease or sell the remaining space under current national, regional, and focal market conditions. As described in Table 11 -10 in Chapter 2 the City contains approximately 3,600 office- related jobs, concentrated in local- serving educational, finance, and personal services industries. Downtown office - related jobs totaling nearly 500 jobs represent about 15 percent of total citywide office jobs. In downtown, public administration employment accounts for about 35 percent of total office - related employment downtown, given City Hall's location on Main Street in the Historic District. Similar to the City as a whole, other major concentrations of office- related employment downtown include educational, business, and financial services. As shown in Table 11 -11 in Chapter 2 it is estimated there are 23 businesses categorized as office- related tenants that occupy approximately 175,000 square feet of space in downtown. These businesses, a majority of which (60 percent) occupy small offices comprising less than 2,500 square feet, include: finance, insurance, and real estate; public administration; social services; health services; and engineering, accounting, research and management businesses. One notable exception is the city government office currently located in the Historic District, which occupies greater than 80,000 square feet of space. Downtown includes several locally serving office tenants, but there has been no recently developed office space within the Downtown Master Plan boundary. In an effort to revitalize the Downtown area and support the entrepreneurial endeavors of local businesses, the Redevelopment Agency has spearheaded and contributed funding towards the construction of a 13,250 square foot business incubator office building at the corner of Heald Avenue and Main Street in the Cultural District. The business incubator office space is estimated to begin leasing to tenants at the end of construction in 2013. The space is envisioned to accommodate a revolving set of 10 to 15 start-up businesses and will offer below- market lease rates (approximately $1.75 per square foot) to support their initial development. Future Office Market Demand Future demand for office space is a direct function of employment growth. Thus, to quantify the potential demand for office space within the Downtown Master Plan boundary, this analysis 1-1 Austin- Brockett Commercial Real Estate Services, LLC, January 22, 2009. Economic a Planning Systems, Inc. 70 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 evaluated trends and projections of office - related employment by industry. Because there are no data sources that provide employment estimates at the geographic level necessary for this study, this analysis used two data sources: Claritas and EDD employment projections. Under this methodology, employment projections used projection data from the State EDD for Riverside County (see Table 11 -10), the smallest level of geography available, and current employment estimates from Claritas for the 1/2 -mile radius surrounding downtown (see Table 11 -9). As depicted in Table V -2, this analysis estimates demand for approximately 12,000 square feet of office space by 2013 in Downtown Lake Elsinore and approximately 80,000 square feet of office space by 2035. Various factors could influence additional office demand beyond what is estimated in this market analysis. Specifically, there could be demand for up to 100,000 square feet of additional office space (in addition to the demand for office space presented in Table V -2) if the City and Downtown experience higher employment growth than projected. Further, specific location and site characteristics directly. affect the ability of an area to attract office tenants and capture desired market rents an occupancy levels. Development of a high -speed rail station located adjacent to the Main Street interchange of I -15 has the possibility of significantly influencing of additional demand for office space. A high -speed rail station near office space in the Gateway District would create added convenience for commuters. Office Market Conclusions Current economic conditions have resulted in increases in the regional and local unemployment rate. With unemployment at 9.5 percent and businesses tightening their operations, demand for new office space is low at the present time. Additional indicators of a contracting economy include high vacancy rates, declining lease rates, and negative net absorption. Economists are predicting demand for office space may continue to be low through early 2011, although even when the office market rebounds the Downtown area is unlikely to be a prominent location for office space beyond local- serving tenants. Following the expected recovery of the national and local economy, EPS projects that the Downtown market area is expected to be able to absorb roughly 12,000 square feet of this space through 2013, and 80,000 square feet through 2035. With a successful downtown revitalization effort, and especially if high speed rail service is provided to Downtown Lake Elsinore, these absorption projections could be increased substantially. It is likely that most office development occurring within the Downtown Master Plan boundary will be located in the Gateway District given its freeway access and proximity to a potential high -speed rail station. Economic& Planning Systems, Inc. 71 LL MQ Y1� 72 m — c �o > _ d c Nnr�n mm � C N m r Ar[+iTwN mmrwwm .v 4. N F m E � a mwm�mv a L N_rmm _T q N yW N mmt7A rN N a O;� i wN �'nmm r°H r N C� d 0 O OIr m� NN m� n m �C S O 1.2 C N ° - � D7 r m d) A N D 6 m w O W m d d y N � w O m w m N N m N m E d Q<o o Q 3 n o a E E m r n a a N, m�cl `m Eo d _ rmrnin W A y a a 0 cli O w Q y a m o o iri N w A m C 0 d N. w O�NAAN II m m> m =) y Q Q O r N W m m y d •- w o y J N Q�° N 0��01 aN @C UU O U Q7w _ Q m 3 d m y a o U U y y ..: c rn 0 E S 28 Q 0 a w W.N w ' O O w A O N O m m p N LL W Q N (O fh �- A NMQ. -'9Vim W ❑ m D w j a N N � C m`o o d dm vii m ` c mw^ U Z y O W O '% O O 'O m o Id (OQv QO a d L II W II E d m o vi�oi w N0 Q d m , E m `m `oE a. E v ai my 0 �ca mo O m E O m m ` O ^L. u m y= N O d - d j "C .0 E N O 0 0 m O N N d d m C O a o c d O c d.2 kj o 0 m¢ - C C C d O C E m O m C OOt D O O O p C m 00 d C O C C H w. 'mC E d c m c W o 3 m m o p3 donm w 'ZS o d °' 3�ddi`no�p` II9c Z E nE:4 .o 20WO o a c oK n ¢ EC60myy.0 AEw w d —�¢m2 wdEto J O oy. "in Jm jL^« EaoU `o ��moQmpoo 3 �j UOoa ma w w e w c c o o n o 0 Z m o m w R N W c E c s0 E A 'o= o��.JO �m o� =° m o'a2MB,mam'� f��U m FUD oiimw¢ �1- z o y 72 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 7$ 2009 As discussed in Chapter 4, mixed use projects are an untested prototype in the City but this type of development is highly appropriate for future development in Downtown. Commercial mixed use projects, combining ground floor retail with local- serving upper -story office spaces should be focused in the Historic District along the Main Street frontage. Given the mixed use project is an untested product in the City and lease rates for office development are low relative to office lease rates in the region, it will be important to evaluate the financial feasibility of such a product to determine if achievable rents exceed the cost to construct this type of development. Economic &Planning Systems, Inc. 73 6. HOTEL MARKET ASSESSMENT The current economic recession has had a significant impact on the national hotel market. There are several key indicators for hotel market performance including occupancy rates, revenue per available room (RevPAR), average daily room rates (ADR), supply of hotel rooms, and demand for hotel rooms. Smith Travel Research (STR) reported that the national hotel market experienced declines in occupancy in 2008, combined with weak growth in RevPAR, a decline in demand, and increase in supply. STR anticipates that the national hotel market will continue to experience negative trends through 2009 and into 2010, mainly driven by the diametrical trend in supply and demand. It is also important to note that experts anticipate that the overall market should begin to see positive indicators in 2010, positioning the market for opportunities in hotel development at or around that time. The following sections provide information on hotel trends in Lake Elsinore and the surrounding region. In the case where specific performance indicators are evaluated, EPS focused the analysis on midscale and upscale hotel market trends. The selection of this focus was driven by information gathered from existing concepts for hotel development in Downtown Lake. Elsinore. Midscale and upscale hotel development appears to be the most appropriate and complimentary type of hotel development when considering the vision of the City's downtown. Regional Hotel Trends Visitor and tourism spending has a direct relationship with the hotel market. Between 1992 and 2006, the County experienced average annual growth in direct visitor spending (4.7 percent annually) above the State average (4.3 percent annually). This indicates that the County has been able to foster a healthy tourism and travel industry driven by recreation opportunities in the region, including: • Riverside historic Main Street. • Riverside museums and galleries. • Casinos (Lake Elsinore, Temecula, and San Jacinto). • Amusement parks. • Balloon and Wine Festival (Temecula). • Wine tasting and wine trolley /train tours (Temecula Valley). • 3 State parks (including Kabian, Lake Skinner, and Santa Rosa Plateau Parks). • Sporting Venues (including the Lake Elsinore Storm Single A Baseball Stadium). • Extreme sports (e.g., off - roading, motocross, sky diving, climbing, hang gliding). • Golf courses. The unique recreation opportunities available in the region set them apart from several of the other recreation destinations in Southern California. Communities directly to the west of the Inland Empire offer recreation opportunities that focus on ocean - related activities and resort accommodations. Los Angeles and Orange Counties to the north and west and San Diego County to the south offer such opportunities as: major theme parks; high -end shopping; and other urban recreation options including major music venues and national sports teams. While Y yxerns, Inc. 74 Cake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 these communities have a wide variety of urban recreation options, the Inland Empire's parks and open spaces are unmatched in neighboring urban communities. In addition, the wine tasting and tour opportunities are rapidly increasing in popularity as the region is marketed as the 'Southern California Wine Country. "t8 In addition to existing recreation opportunities, several efforts are being pursued to boost the travel and tourism industry, including these: Creation of a Temecula Business Improvement District in 2007 to assist the Convention and Visitors Bureau with marketing and promotion and to provide funding for a variety of events and festivals.19 • Additional focus and investment by the Temecula Valley Visitor and Convention Bureau to bolster web marketing with an emphasis on branding the desert as "Southern California Wine Country. "20 • Creation of a marketing plan by the Temecula Valley Visitor and Convention Bureau that focuses on boosting tourism and convention business and specifically, occupancy and average daily rates of lodging facilities.21 • Creation of the Lake Elsinore "Dream Extreme" brand and logo to market the City's culture and amenities to businesses, developers, residents, and visitors 22 As evidence of the success of some of these tourism marketing efforts, Temecula saw a major boost in tourism in 2007. The City saw robust growth in transit- oriented tax revenues, 6,000 tourism - related jobs, and more than a half a billion dollars in visitor spending.23 The unique recreation and tourism opportunities are the region's greatest tools for sustaining a strong hotel market. Increases in demand for recreation activities generate additional demand for hotel rooms. While significant increases in hotel supply will likely not be feasible in the next few years, the leverage available from the travel and tourism industry can assist in improving the existing market and position it for future development as the national economy recovers. To evaluate specific hotel information in the region, hotels within a 25 -mile radius surrounding the City were evaluated. There are approximately 51 hotels (4,400 rooms) in the regional market comprising a variety of types ranging from economy to upscale (see Table VI-1). The majority of rooms available are at independent hotels including resorts, lodges, and bed and 1s "Bleak Tourism Figures Forecast," Press- Enterprise.com, December 24, 2008. 1s Ibid. 20 City of Temecula website 21 "Temecula Valley Convention and Visitors Bureau Marketing Plan Sets the stage for Growth," Temecula Valley Convention and Visitors Bureau, January 11, 2007. 22 City of Lake Elsinore website 23 "Tourism a $538 Million Business in the Temecula Valley ", Temecula Valley Convention and Visitors Bureau, May 23, 2007. - Economic & Planning Systems, Inc. 75 >."° ��°"°°'°••° ^TM^°°^'°° " °°°'�"°°" " °'°"° ° " °°°° DRAFT Table VI -1 Lake Elsinore Downtown Market Study Hotels Located Within 25 Miles of City of Lake Elsinore [1] Page 1 of 2 Miles From Number Date Hotel Name Downtown [2] of Rooms Open Economy Hotels Rodeway Inn & Suites Canyon Lake Super 8 Sun City Americas Best Value Inn Sun City Extended Stay America Temecula Motel 6 Temecula Rancho California Rodeway Inn Temecula Rodeway Inn Falibrook Extended Stay America Lake Forest Americas Best Value Inn Laguna Inn & Suites Americas Best Value Inn San Clemente Subtotal Independent Hotels Travellnn Lake Park Resort Glen Ivy Hot Springs Spa Rancho California Inn Temecula Creek Inn Pala Mesa Resort Hotel South Coast Winery Resort Falibrook Country Inn Laguna Hills Lodge Falibrook Lodge Mission Inn Bed & Breakfast Tiffany Inn San Clemente's Little Inn Country Inn Pechanga Resort Subtotal Midscale w/ Food & Beverage [3) .Best Western Lake View Inn & Suites Quality Inn Lake Elsinore Quality Inn Wine Country Temecula Best Western Country Inn Ramada Inn Temecula Best Western Capistrano Inn Holiday Inn San Clemente Prepared by EPS 1232009 76 6 34 Jun 1975 11 59 Apr 1995 11 52 N/A 13 107 Apr2002 14 135 Oct 1988 15 39 Jun 1983 19 50 Jun 1975 19 119 Sep 1997 20 33 Jun 1987 20 31 Jun 1987 659 2 6D Sep 1989 3 27 Jun 1945 13 4 1913 14 24 Jun1983 17 129 Jun 1969 18 133 Jun 1962 18 76 May 2004 19 28 Jun 1979 19 122 Jun 1968- 19 36 Jun 1990 20 20 - 20 25 - 20 18 Jun1967 20 100 Jun 1985 20 522 Jun 2002 1,324 2 71 Ju12007 2 55 Jun 1992 13 74 Sep 1989 14 74 Jan 1987 15 70 Nov1989 20 108 Jun 1972 20 72 Oct 1989 P,11�ISIWL 0 B � µq$pMyWpy1C1810m 1.1I.W. Table VI -1 Lake Elsinore Downtown Market Study Hotels Located Within 25 Miles of City of Lake Elsinore [1] DRAFT Page 2 of 2 Hotel Name Miles From Downtown [2] Number of Rooms Date Open Midscale w/o Food & Beverage [3] 16 115 May 2000 Holiday Inn Express & Suites Lake Elsinore 2 73 Sep 2008 Comfort Inn & Suites Murrieta 9 65 Sep 2003 La Quinta Inn & Suites Temecula 13 56 Mar 2008 Fairfield Inn & Suites Temecula 13 94 Mar 2007 Holiday Inn Express Penis East 13 105 Jul 1993 Holiday Inn Express Temecula 13 90 Jun 1999 Hampton Inn Suites Temecula Valley Wine Country 14 99 Jun 2004 Comfort Inn Fallbrook 18 41 Jun 1987 Fairfield Inn Mission Viejo Orange County 19 147 - May 1987 Hampton Inn Los Angeles S Orange County 19 - 84 Aug 1998 Comfort Suites Lake Forest 20 60 Oct 2002 Candlewood Suites Orange County Irvine East 20 122 Oct 1997 Subtotal 1,036 Upscale Ayres Suites Mission Viejo 16 115 May 2000 Ayres Suites & Spa Mission Viejo 17 90 NIA Courtyard Foothill Ranch Irvine Spectrum 18 156 Feb 2004 Staybridge Suites Irvine East Lake Forest 19 128 Mar 2006 Hilton Garden Inn Irvine East Lake Forest 19 103 Mar 2004 Residence Inn Corona Riverside 20 95 May 2005 Subtotal 687 Upper Upscale Embassy Suites Temecula Valley Wine Country 14 176 Jun 1990 Subtotal 176 TOTAL 4,406 "reg_ hotels' Source: Smith Travel Research and EPS. [1] Includes hotels located in the City of Lake Elsinore. [2] Distance measured from a central point in downtown Lake Elsinore. ]3] Market segments represents a method by which branded hotels are grouped based on the actual average room rates. Independent hotels, regardless of their average room rates, are included as a separate chain scale category. The chain scale segments are: Luxury Chain, Upper Upscale Chains, Upscale Chains, Midscale Chains with Food and Beverage (F & B), Midscale Chains without F & B, Economy Chains, and Independents. PmparedbyEPS 723 12009 1.11 aiefosiamrex,ore oa .+imW„uusmarw�ear+rerm�an+.novau 77 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 breakfasts. The majority of national brand hotels are midscale hotels without food and beverage. It is important to note that, while there are several upscale hotels within 20 miles of the City, the closest upscale hotel is the Glen Ivy Hot Springs Spa, located approximately 14 miles away. The Glen Ivy Hot Springs Spa provides minimal cabana -style lodging. This absence of upscale hotels near Lake Elsinore and Temecula suggests opportunities exist for upscale hotel development in or around the City that would serve the growing recreation and tourism industries. Lake Elsinore Hotel Market In past decades, Lake Elsinore was a significant travel destination for Southern California residents, who came for the lake activities and natural hot springs. Several hotel facilities in Downtown reflect this past. However, as the area's water quality deteriorated and as encroaching urbanization made Lake Elsinore more a residential location than a "getaway," the local hotel industry diminished. - Today, the City has approximately 423 hotel rooms located in eight hotels. Four of the hotels are national brand motels while the remaining are independent specialty lodgings comprising one RV resort and motel, one hot springs motel, and one casino resort hotel (see Table V I -2). The national brand motels offer standard limited- service room and property amenities, such as swimming pools and continental breakfasts. Rates range from around $65 to $200 per night. Those hotels reporting seasonal price differentials show room rates increasing as much as 100 percent during peak season (the traditional tourism peak season of the summer months). The specialty lodging places vary in amenities and pricing. The Lake Elsinore RV Resort and Motel is unique in that it provides an RV campground in addition to traditional lodging, pools, and recreation rooms and activities. The remaining specialty lodgings focus on resort-type amenities including hot springs and spas. Rates at the Lake Elsinore RV Resort and Motel are $55 nightly while the resort lodging rates range from $60 to $90 nightly. Future opportunities for hotel development would be driven by the demand of visitors seeking recreation opportunities unique to the region and local area, as well as the needs of an increasing population and employment base. The latter groups may be best served by midscale hotels and, indeed, several recent hotel developments are addressing this locally derived demand. The destination market, however, is not being fully capitalized, and could be served by a combination of midscale and upscale facilities. As mentioned previously, the Glen Ivy Hot Springs Spa is the closest upscale hotel to the City and offers only four rooms. This lack of supply indicates that upscale development in the City could, under favorable hotel market conditions, supply an under -served hotel market and capture tourism and recreation visitors that would normally find lodging in a neighboring community. Economic s Planning Systems, LL. & 0 �( 79 \ / � \ It e ! � / } \ } S « : \\ \ 2\ 16 16 16 . \ &\\!r! \)\ - _ - � ts \ G \ } \ / \ \ } \ 79 \ / � \ It e ! � / } \ } S « : \\ \ 2\ 16 16 16 . \ &\\!r! take Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 Hotel Performance Indicators Because the Lake Elsinore hotel market is small, EPS evaluated hotel performance trends in the regional hotel market, defined as a 25 -mile radius around the City's downtown, to assess overall hotel market performance. As mentioned previously, EPS focused its analysis on midscale and upscale hotels to reflect the type of hotel desired for development in the City's downtown (Waterfront District). Occupancy and Room Rates Midscale hotels experienced positive performance trends over the last six years, with growth in revenue and rates slowing since 2006. Midscale hotel occupancy grew tremendously between 2003 and 2004, leveled off between 2004 and 2006, and has declined since 2006. The ADR for the midscale hotel sector has grown consistently over the last six years but growth has slowed since 2006 (refer to Table VI-3). RevPAR also continued to grow after 2006, but at a significantly slower rate. As with midscale hotels, upscale hotel performance declined within the last couple of years, after several years of growth. Table VI -4 shows that occupancy declined by 2.9 percent in 2007 and by 5.5 percent in 2008. The ADR for the upscale hotel sector did not experience a decline but did see slower growth from a 2006 high of 7.4 percent. ADR growth has still been higher than growth before 2006. RevPAR, as in the midscale hotel market, saw a significant slowing of growth, with a decline RevPAR in 2008. Supply and Demand Trends The supply and demand of hotel rooms are key indicators of potential for additional hotel development in a market area. A healthy, balanced hotel market should see increases in demand matched by increases in supply. If supply increases while demand decreases, the hotel market is likely to suffer from a significant surplus and existing hotels will begin to see declines in occupancy and ADRs. It is important however, to differentiate the factors of a hotel surplus. A small surplus in hotel rooms may be attributed to hotels that see significantly low occupancy because of the quality of the hotel. A large surplus is an indicator that supply growth has outpaced demand, and market adjustments are required to restore the balance, either through supply reductions or demand increases. The regional Lake Elsinore midscale hotel market has overall seen greater average annual growth in demand (3.9 percent) compared to growth in supply (3.7 percent) over the past 6 years (see Table VI-3). This is mostly attributable to an 11.5- percent increase in demand between 2003 and 2004. Since 2004, annual demand changes have fluctuated between 0.5 percent and 4.3 percent growth. Marginal demand growth, combined with increases in hotel supply over the past 2 years, has caused a significant rise in the surplus of hotel rooms. Because the average annual growth in surplus over the last 6 years is still minimal, the surplus is likely driven by the negative impacts of current economic conditions. Economic & Planning Systems, Inc. SU .,,.�•,,.,�,,,. .� w.�e��•��.a�.�•A..- ■,ff fL d � 1]J i � I L' m N t9 f d m . H E . 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C � m v>wE -@ n 0. _ O Q f- Q Q co Q C] Q El) O Z Z-., IT m n R M Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 The regional Lake Elsinore upscale hotel market has also seen greater growth in demand (3.7 percent) compared to growth in supply (3.4 percent) over the past 6 years (see Table VI-4). This is mostly attributable to average annual growth above 10 percent between 2003 and 2005. Since 2006, growth in supply has leveled to near zero growth while demand has decreased. Like the midscale hotel market, hotel room surplus has grown significantly since 2006 compared to declines in surplus through 2005. Unique to the upscale hotel market is a decline in the rate of supply growth, compared to an increasing rate of supply growth in the midscale market. Hotel Market Conclusions The growth in demand before 2006 indicates that the region has been successful in marketing tourism and recreation opportunities in the Region. Travelers leery of the current economic conditions will likely increase their travel spending once the economy improves. While the region has traditionally been a strong tourism draw, current hotel market conditions are not favorable for additional hotel development in the regional Lake Elsinore hotel market. As discussed previously however, it is anticipated that national hotel markets may see positive performance indicators as early as 2010. In the regional Lake Elsinore hotel market, if hotel supply growth does not continue to increase, it is likely opportunities for hotel development will exist once the economy improves and demand for hotel rooms reverses the current declining trends. The greatest opportunity for hotel development will be in the upscale hotel market. While the upscale hotel market saw greater declines in occupancy and demand than the midscale market, these trends are to be expected in an economic downturn when travelers choose less expensive accommodations. The significant growth in demand through 2006, coupled with slower growth in supply, and a decline in the surplus of hotels in this market are the strongest indicators that future upscale hotel development may be viable in the market. In addition, current efforts to increase marketing for the region's recreational attractions and the absence of upscale hotels and resorts in and around Lake Elsinore position the City for future upscale hotel development. Historically strong performance in the region also indicates potential will exist for midscale hotel development once the economy improves. Midscale hotel development would serve tourists and visitors seeking less expensive lodging options, plus the lodging needs of the local population (for weddings, reunions, etc.). Downtown redevelopment will not only boost the tourism and recreation markets, but also the local business sector. New and revitalized Downtown businesses, attracting local and regional clients and customers, would contribute to an increase in demand for midscale hotel accommodations. Indeed, if future hotel growth in Lake Elsinore occurs merely in proportion to projected population and job growth, it could be expected that Lake Elsinore's current supply of roughly 420 rooms could increase by an additional 200 to 400 hotel rooms in the City through 2035 (roughly 50 percent growth based on jobs, and 100 percent growth based on population). Accounting for the potential replacement of older hotel properties, another 100 to 200 new rooms might be added, bringing the total demand for new rooms to 300 to 600 through 2035. Economic& Planning Systems, Inc. 83 .,,• e�•.....•., ..•„�.,.•n.ry.,w��•,•,.•,•,_,.w� Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79 2009 To the extent that Downtown's image and amenities improve, it is possible that half or more of these additional hotel rooms could be accommodated in Downtown (40 to 80 rooms by 2013 re and 150 to 300 rooms by 2035). Downtown has a few older lodging facilities, and historically was a popular destination for leisure travelers. Today, the perception of crime and proximate poverty, and a perceived lack of retail and recreational amenities, make it difficult to attract leisure travelers to this area. Attention to public safety issues, aesthetic improvements and maintenance, and improved access to leisure destinations - most importantly the lake itself, but also cultural activities - can dramatically improve the prospects for Downtown hotel development. The Draft Master Plan anticipates the development of a hotel in the Waterfront District of downtown. This is an ideal location for future upscale hotel development because of the proximity to the Lake, the downtown, the baseball stadium, and future recreation space in the Waterfront District. Midscale hotel development is also an option in the downtown and should be considered when planning for the identified downtown districts. It is also important to note that a unique opportunity exists for Lake Elsinore to develop and market its historic hot springs. The first hot springs resort, Crescent Bath House in downtown, was built in 1887 and has been registered a national historic site. Throughout the first half of the 20a' Century, the City was known as a resort community for celebrities and residents of Hollywood. The existing Glen Ivy Resort Spa, built in 1913, is an example of a hot springs spa that continues to draw people from all areas of southern California. Reclaiming the City's historic hot springs reputation through the development of other spas and resorts would contribute to the redevelopment of downtown and growth in tourism, visitor spending and demand for hotel lodgings. Economic & Planning Systems, Inc, 84 7. FINANCIAL FEASIBILITY ANALYSIS This chapter describes the results of a series of pro forma analyses conducted to test the financial feasibility of prototypical development envisioned in the Downtown Master Plan. The objective of these analyses is to assist the City towards the identification of projects that have the greatest potential for near -term feasibility. The pro forma analyses, which are based on a "static pro forma model that assume development costs and revenues after stabilized operations have been achieved, utilize conservative assumptions and findings from the market analysis presented in the previous chapters. Pro Forma Analysis The pro forma analyses estimate the "minimum threshold value" (sales price or lease rate) required to cover the cost of developing and operating a given building prototype. The minimum threshold values calculated per square foot have been compared to similar sales prices and lease rates in Lake Elsinore and the surrounding region. Refer to Table V1 1 -1 for a summary of the minimum threshold values per development prototype as compared to comparable products. To be considered financially feasible, the minimum required pricing levels must be less than or commensurate with fair- market rents of recently- constructed and similar products. - Building Prototypes The pro forma analyses compare the feasibility of different development prototypes per land use and tenure type (for -sale and rental) under current market conditions. To test a wide range of product types, this analysis utilizes eight building prototypes based on the land uses identified in the draft Downtown Master Plan. The prototypes include four single -use buildings and four mixed -use buildings as described below. Single -Use Prototypes The financial feasibility assessment includes four single -use projects: two types of residential buildings and two sizes of office product. These single -use prototype scenarios are described below. • High Density Residential: Garden Townhomes. This for -sale residential prototype assumes a two -story attached townhome design with individual garages. The average density assumption is 20.0 dwelling units per acre (du /acre) and the average unit size is 1,200 net square feet. High Density Residential: Apartments. This for -rent residential prototype assumes a three -story apartment building design with surface parking. The analysis assumes an average density of 35.0 du /acre and an average unit size of 1,000 net square feet. Gateway Commercial: Three -Story Class A Office. This office prototype assumes a three -story Class A building design with surface parking. The analysis assumes a floor area ratio (FAR) of 0.40. Economic &.Planning Systems, Inc. 85 I-- !L Q a m E W E m s m m N a � r m 3 m¢ C 0 - a Zi a `O m LL r LL E LL m d y nm o 00 e o 0 0 M O f0 CJ r0 N N N N N N N N N m uei`rn o °o om W ��9 K^ r�FNy• .Nf9 m r0 V O O N O N O O � �j C� N N cs m C4 z YM r N� N'. m M N O N O � m C4 z YM r N� N'. 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K a a a 0 a A m E. E ^ @ a R n b 0 g 3 i O p@ W M Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 Gateway Commercial: Six -Story Class A Office. This office prototype assumes a six -story Class A building design with structured parking. The analysis assumes a FAR of 1.00. Mixed -Use Prototypes The financial feasibility analysis includes four mixed -use projects, which comprise a mix of rental residential, retail, office and hotel development. The mixed -use prototypes are described below. Residential Mixed Use: Apartments over Office. This prototype assumes a modified "mansion- style" building comprising six apartment units over ground floor office and podium parking. This prototype represents a multi -story design with an average residential density of 30.0 du /acre. Commercial Mixed Use: Apartments over Retail. This prototype incorporates rental housing constructed above ground -floor commercial uses and podium parking. This mutti- story design assumes an average residential density of 18.0 du /acre. • Downtown Recreational: Mid -Scale Hotel over Retail. The first of two hotel prototypes, this building design incorporates two components: a 125 -room mid -scale hotel above ground -floor retail. The design utilizes surface parking. • Downtown Recreational: Up -Scale /Resort Hotel over Retail. The second hotel prototype incorporates a 125 -room up- scale /resort hotel with ground -floor retail and structured parking. This prototype tests the financial implications of a higher cost, higher revenue hotel in comparison to the previous mid -scale hotel prototype. Land Cost Sensitivity Analyses The base pro forma analyses test the financial feasibility of each development prototype described above assuming the land is provided at no cost. This could occur if, for instance, the City were to offer publicly owned land at no cost to entice developers to invest in Downtown. However, much of the land in Downtown is privately owned, and the property owners would require some level of compensation to sell their land. As a sensitivity analysis, EPS also estimated the impact of various land costs on the feasibility of each development prototype. The following list provides a breakdown of the sensitivity analyses performed for each development prototype: • Scenario #1: Land Cost at $500,000 per acre • Scenario #2: Land Cost at $1.0 million per acre • Scenario #3: Land Cost at $1.5 million per acre Each of these land cost per acre scenarios are assumed to reflect the cost of land plus any additional costs for lease buy -outs, tenant relocations, property assembly, infrastructure improvements, and environmental remediation. Financial Assumptions Numerous assumptions are required to analyze the financial feasibility of the selected development prototypes. In addition to EPS's own in -house data sources and published cost Economic & Planning Systems, Inc. 87 ..°°°°° gym"^°°^^ ^"""'" "•°" " °' °'""" °"'°` Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March ig, 2oo9 estimating reports, EPS conducted interviews with local developers and collected data on comparable projects in Southern California and the Western Riverside County region to ensure that the assumptions contained herein reflected the experiences of locally active developers. Assumptions and Calculations Development Costs To conduct feasibility analyses, it is necessary to estimate the costs of development for various building prototypes. Development costs typically include "direct costs" and "indirect costs." Direct Costs "Direct" costs include materials and labor for the construction of the buildings and the finishing of the interiors ( "tenant improvements' or "upgrades "), as well as the construction costs for the building's parking spaces. Land acquisition costs and infrastructure costs are also frequently considered direct costs, but in the base feasibility analyses, EPS solved for the minimum threshold sales prices or lease rates assuming the land is provided at no cost. As a sensitivity analysis, however, EPS tested the impact of various land costs on the feasibility of each development prototype as described previously. The direct cost estimates used by EPS in these feasibility analyses were derived from R.S. Means, Square Foot Costs 2008. That publication provides general costs for construction from development projects nationally, and provides adjustment factors to account for differences in costs among metropolitan areas_ Since the direct cost estimates provided by RS Means are often conservative, EPS corroborated the direct cost assumptions with real estate professionals active in development in the Inland Empire. According to feedback received, some adjustments were made to the cost estimates. Indirect Costs "Indirect costs" include a variety of charges inherent in the development process beyond the labor and materials for construction. Examples include: • Architectural and engineering services • Impact fees and costs to secure development entitlements • Project management and general overhead, such as employee salaries • Construction financing Indirect costs are frequently expressed as percentages of direct costs. For example, architectural and engineering services may be estimated at six percent of direct costs. Such relationships are fairly standard in the development industry, and EPS has used a general industry standard of thirty percent of total direct costs to estimate indirect costs. Total Development Costs Developers will typically include a "contingency" factor to cover unanticipated cost overruns. EPS has used a five percent contingency in the pro formas to account for unknown factors such as Economic & Planning Systems, Inc. 88 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 construction delays and increased direct or indirect costs. This contingency factor is added to the sum of direct and indirect costs to derive the total development cost estimate for each building prototype. The pro forma analyses also include an assumed developer profit margin where applicable. The profit margins sought by developers were assumed by EPS based on industry standards, and corroborated by locally active developers. A developer will seek to realize a return on the investment in land acquisition and building development. For "income" properties such as apartments, retail, or office, these returns and profits are captured in the operating income over time as well as the future sale value of the building. Thus, the developer profit margin for these development prototypes is zero percent. For for -sale housing, however, the profit margin must be captured at the initial sale, so developers typically assume that sale prices will be at least 15 percent higher than the costs of development (including land acquisition). EPS has used "unleveraged" profit margins, which means profits are estimated based on the total costs of development and land acquisition rather than on only a partial equity contribution, with the remainder of costs being financed. The uncertainty of long -term interest rates, loan -to -value ratios, and other factors for various product types and market areas suggested that the unleveraged approach would be more practical for this level of feasibility analysis. Parking Costs Each development prototype assumes a specific parking format: garage, surface, podium, or structured. Each prototypical for -sale garden townhome is envisioned to include a garage, the -cost of which is factored into the direct cost per gross square foot. Surface parking spaces for lower- density development is estimated to equal approximately $4,000 per parking space. On the other hand, structured parking is the highest -cost parking format envisioned in the draft Downtown Master Plan. The materials required to construct both podium and structured parking spaces are estimated at approximately $30,000 per parking space. It is worth noting that the relative impact of higher cost parking formats is greater for retail than for residential or office uses. This is because retail requires more parking spaces per 1,000 square feet than do residential or office uses. Key Revenue Assumptions The operating cost and revenue assumptions described in the following sections account for the general nature of lease terms in various building types. The cost and revenue assumptions and resulting minimum threshold values estimated in these analyses are characterized according to the following guidelines: • Residential townhome (for - sale). homeowner is responsible for all expenses related to homeownership including: mortgage, taxes, insurance, and maintenance. • Residential apartment (for- rent). Tenant pays rent and utilities; management pays taxes, insurance, and maintenance. • Retail. "Triple -net" leases, tenants pay rent plus maintenance, utilities, taxes, and insurance. Economic & Planning Systems, Inc. 89 take Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 • office. "Full service' leases; property managers pay maintenance, utilities, taxes, and insurance. Hotel. Guests pay average daily room rate plus other charges (telephone, food and beverage, etc.), management pays utilities, taxes, insurance, maintenance, and departmental expenses (food and beverage, housekeeping, etc.). Operating Revenues Different land uses may use different means of projecting revenues. For instance, a for -sale home simply generates its sale value, while a hotel's revenues are based on achievable average daily room rates, the percentage of occupancy, and other sources of income such as food and beverage departments and conference space leasing. With the exception of the hotel uses, the pro formas assume there are no operating revenues beyond lease revenues (the minimum threshold values for which the pro formas seek to solve). For the mid -scale and up- scale /resort hotel uses, EPS assumes other operating revenues derived from food and beverage sales and conference space leasing is fifteen percent and forty percent of the minimum threshold values, respectively. Revenue periods shown in the pro forma analyses reflect the time period in which the minimum threshold value is characterized. For example, the minimum threshold value for -sale garden townhomes is characterized as a one -time sale of the property. Thus, the revenue period is equal to one. In contrast, the minimum threshold values of the income properties (retail and office) are characterized as monthly lease rates and therefore have a revenue period equal to twelve months per year. Likewise, the minimum threshold value of the hotel prototypes are characterized as average daily room rates and therefore have a revenue period equal to 365 days per year. Operating Costs For most income properties (i.e., buildings leased rather than sold), there are typical relationships between operating costs and achievable revenues. Buildings will typically have some vacancy, which represents revenues unachieved. EPS used standard vacancy assumptions for each of the income property prototypes. The building managers also incur operating costs. Some of these costs, such as utilities and common area maintenance, may be passed on to tenants, while others are absorbed by the managers and are not typically passed through. These operating costs often can be estimated as a percentage of total achievable revenues, or may be presented as a given amount per leasable building square foot. Income properties also typically withhold a certain amount of annual revenues for purposes of funding necessary repairs as the building ages. These "replacement reserves" are a small fraction of overall achievable revenues, and EPS has used an industry standard of 3 percent. For -sale and income properties alike typically involve marketing costs and commission expenses. For all building prototypes, EPS has assumed that these costs amount to 6 percent of the total building value. This amount is subtracted from the capitalized value to derive the net revenue from the building's sale or capitalized value. Economic & Planning Systems, Inc. 90 Cake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 Capitalization Rates Building values for for -sale properties are straightforward - the price the buyer pays for the building. For income properties, a 'capitalization rate' is used to reflect the value of an ongoing annual revenue stream, given the risk profile of the building. Investors will divide the stabilized annual net operating income by the capitalization rate to derive the building's total value. For instance, a building that generates $1 million in annual net operating income would be sold for $10 million to an investor using a 10 percent capitalization rate. lower risk projects have lower capitalization rates, and therefore higher values than a higher risk project with the same net operating income_ EPS has asserted capitalization rates for each of the building prototypes, based on information from the Fourth Quarter 2008 Korpacz Real Estate Investor Survey. Because for -sale properties do not have annual net operating incomes, the capitalization rate is shown as 100 percent, meaning that there is no multiplier to derive the total building value. The total building value for for -sale properties is simply derived by multiplying the sales rate per building square foot by the net building area. Minimum Threshold values The minimum threshold values calculated in these feasibility analyses should be regarded as the amount the developer would require to cover the cost of developing and operating a given building prototype assuming the land is provided at no cost. The sensitivity analyses show the minimum threshold values for each development prototype assuming three land price per acre scenarios, which comprise the cost of land plus any additional costs for lease buy -outs, tenant relocations, property assembly, infrastructure improvements, and environmental remediation. To consider a project feasible, a developer must achieve revenues from operating or selling the building that exceeds the cost to develop that building by a sufficient margin. If the margin is too small, the developer can invest the same money in other development projects or in non- development investment vehicles that have a greater risk /reward profile. Feasibility Findings The feasibility analyses examine the minimum pricing level thresholds (i.e., unit selling price, apartment or commercial lease rates, and hotel room rates) for the eight prototypical development projects. As summarized in Table V11 I -1, all of the single -use development prototypes and nearly all mixed -use development prototypes require a threshold value that is higher than the achievable values in the City or Historic District under the currently poor market conditions. In other words, these development prototypes are estimated to be infeasible given current market costs and rents, even if land is provided at no cost. Additional detail regarding the assumptions for each development prototype is found in Table VI 1 -2 and Table V11 -3 for single -use and mixed -use prototypes, respectively. 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NN ne d° p b 9OOO� _ 2Z2 _ C OCJOO O� 00 66 'ON Oe c oYm i9y � .nwmo'b o.-«� vy� I m w u c o 3x P= moom ¢a°o `ug$ama'��o Boom° ��3'00` cN o "O�zo 0 o.o moo 0o m �1OOmo m n °'m O-O m nN n �NM� � SOHO �J ��100m W MNN W P tz J 95 T i y °w b 4 G O F o a U ti m a° 2 y? v h o u H x z mW m Em` U 0 ® O 1. y n K m W 0 9,9 y °c 4Q a UI Q.: VN aQ Q O Q �W Vp [�wWy m Oi OV1 J n w d' x.000 =SUZu 0.mw °gyp O0=00 m> C (%0 aq� cVEN NK TM�H' a wjJD$2¢�m 02 Ecu�YO� �umi��o �m m\wc�o cacao (° °n m'8 D 0 2 ry =O c V �m wd n° F=-''n E m 2'0 0_ n� 2 0&6 m w 'm W nou my�U O z m m m O c m m O' c a m06.m c O o- o m g c c 6 S WcE'Lc @E mom wom`m `m= aCiQaY'�� «�F Cm>s�m!0 s.a °Am c> J OmZdQZQ WI°- v5o�~��°- Uq�"~�aa1° O -O am-. wK0 >OM20 nm iQ minty N 0 pm i 95 T i y °w b 4 G Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 The results of the financial feasibility analyses conducted as part of this Market Study indicate the following findings. • The current economic conditions make it very difficult to develop real estate. As in much of the country, Lake Elsinore is currently suffering from high foreclosure rates, a have lack of credit for developers and prospective homebuyers, and increasing unemployment. These conditions ve caused many prospective projects to be put on hold, as the developers and investors do not anticipate profitability in the near term. These broad conditions, combined with the generally low price points found around Downtown Lake Elsinore, pose major challenges to development feasibility in the near term. Both single -use residential development prototypes may be feasible in the medium - term. To achieve feasibility, garden townhomes require a pricing level that is approximately 70 percent greater than comparable condominiums in the City and 15 -40 percent greater than comparable condominiums in nearby Temecula. Prototypical apartments require rents approximately 40 to 50 percent greater than recently- constructed apartments in the City. It must be noted, however, that the residential market has borne unprecedented declines in recent years, with the median prices of new and existing homes in Lake Elsinore falling 30 to 40 percent between 2006 and 2008. The eventual recovery of the housing market will significantly close the feasibility gap for these projects, and they should be supportable in the mid -term (five -plus years). Both single -use office development prototypes are currently infeasible, and face significant future challenges. This analysis indicates that both the three -story and six - story office development prototypes are financially infeasible under current market conditions. The required lease rate for Class A three -story office with surface parking is approximately 20 percent higher than the lease rate for the newest office space constructed in the City as well as Class A office space within the South (Riverside) County submarket in which the City is included. A general economic recovery will close some of the feasibility gap for low -rise office space in Downtown Lake Elsinore in the mid -term (five -plus years). The threshold value for Class A six -story office with structured parking even more greatly exceeds the lease rate for the newest office space constructed in the City or proximate cities or submarkets. Indeed, real estate brokers contacted in conjunction with this analysis indicated that this particular prototype is not financially feasible, and thus, not being constructed anywhere in the Inland Empire. Unless a high -speed rail station is constructed nearby, EPS considers this taller office prototype to be only a long -term prospect for feasibility in Downtown Lake Elsinore (ten -plus years), after significant improvements are made to the area's desirability. The residential mixed -use and commercial mixed -use development prototypes may be feasible in the medium -term. The podium parking component for both represents a significant cost that is one of the factors increasing the threshold values of these development prototypes. The eventual housing market recovery will improve the feasibility Of mixed -use development with housing in the mid -term. While the feasibility of the overall projects for "residential mixed -use" and "Commercial mixed use" prototypes are largely driven by the feasibility of their housing components, it is worth noting that the ground -floor Economic & Planning Systems, lnc. ..i mem,.� � w.� o,..am �.. A•.w�avum.d ov..o..a.. Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 commercial (office or retail) space incorporated into the mixed -use developments also appears to require higher lease rates than the market can currently bear. A mixed -use prototype including a mid -scale or up- scale /resort hotel with ground - Floor retail may be feasible in the medium -term. A mid -scale hotel prototype is estimated to require an average daily room rate of $135, comparable to the prices currently achieved during the peak season, but above the average annual room rate being achieved currently. EPS concludes that it is likely that a mid -scale hotel's ability to achieve an annual average daily room rate of $135 could occur in the medium -term (e.g., 5 -7 years). With the addition of a structured parking facility and higher construction costs, the threshold values of an up- scale /resort hotel and accompanying ground -floor retail are significantly higher than the first prototype but may be achievable also in the medium -term, especially if the City forms a partnership with private development to help fund this type of use. Assumptions related to land costs and the type of parking can contribute to a lack of financial feasibility for development in the Downtown Master Plan. Potential solutions to increasing project feasibility include: providing parcels the City owns outright to private development at no cost; reducing the number of parking spaces for each land use type; developing shared parking requirements; or obtaining governmental funding to construct centrally - located structured parking. Over time, as the general economy and Lake Elsinore's marketability improve, many of the currently infeasible prototypes are likely to become feasible. In addition to improvements in the regional and national employment, real estate, and credit markets, improvement of the overall image of Lake Elsinore through proposed infrastructure, streetscape, signage, and parking investments are likely to increase achievable prices in the Downtown Master Plan, reaching the threshold pricing levels required for construction. Economic & Planning 8. CASE STUDIES In January 2009, Economic & Planning Systems, Inc. (EPS) presented the key findings of the City of Lake Elsinore (City) Downtown Master Plan Draft Market Analysis to the City. Based on discussions regarding key issues identified in the Draft Market Analysis, the City and consulting team of Cooper Carry and EPS identified three potential strategies the City could employ to assist in revitalizing Lake Elsinore's downtown. These strategies include: • Implementing a Business Improvement District (BID). • Approaches to providing and funding adequate parking for existing and future development in downtown. • Mechanisms to incentivize downtown businesses to offer consistent hours and days of operation. - To inform these measures, EPS conducted case study research on successful revitalization strategies employed by other jurisdictions in their downtowns. Though EPS attempted to contact localities with characteristics similar to those of Lake Elsinore, jurisdictions described in this memorandum vary in geographic location, market context, and local government context_ Information on the selected jurisdictions was gathered primarily through telephone interviews with administrators and other participants in the revitalization process, as well as from a review of relevant literature. Business Improvement Districts Business Improvement Districts (BIDS) in California have emerged as a key tool for local governments seeking to revitalize aging downtowns. This section provides a brief overview describing BIDs, their financing authority, and typical services they provide. In order to gain a stronger contextual understanding of the operational characteristics of BIDS, this memorandum presents several BID Case studies to address the following questions: • Why and how was the BID established? • What are the characteristics of the BID assessment (amount, assessment methodology, total revenues)? • What types of services do the BIDS provide? This section also evaluates the viability of implementing a BID in downtown Lake Elsinore. Business Improvement District Definition and Financing Authority BIDs in California are governmentally- administered districts where local businesses or property owners, comprising the district's membership, finance programs that promote the commercial well -being of the district. To institute a BID, a government must propose a new district in a - uc ar - anrung zo Srerns. inc. Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 formation notice, and include in that notice the district's boundaries and scope of activity. The BID has authority to collect assessments from its members at a rate and for purposes described in the district's formation notice, and may perform a variety of services benefiting the business district. The creation of a BID is authorized under either of two laws. The Parking and Business Improvement Area Law of 198924: This law grants jurisdictions and joint powers authorities the authority to levy assessments upon businesses for improvement, maintenance, and marketing activities. The district is established through a public hearing which is subject business owner protest. Absent a majority protest (more than 50% of affected businesses oppose the formation of the district) the jurisdiction can form the improvement area and levy assessments. • Property and Business Improvement District Law of 199425: This law allows jurisdictions and joint powers authorities to establish a district within which they may assess real property to finance maintenance and improvements including security and tasks such as demolition. In addition, the 1994 Act also allows financing of streets, rehabilitation or removal of existing structures, and security facilities and equipment. Costs must be apportioned according to estimated benefit within the district. In accordance with Proposition 218, the creation of this type of district requires 50% of ownership support weighted in proportion to assessment liability, and extends over a maximum five -year period. Business Improvement District Services BIDs provide a- variety of services aimed at improving the vitality of downtown districts. BIDS offer many of the functions typically provided by localities but rather than duplicate city services, BIDS offer enhanced services concentrated within a defined district boundary. These services are described below. • Maintenance. BIDs provide maintenance services over and above those provided by local government, including frequent sidewalk sweeping, trash and debris removal, periodic power washing of sidewalks, and immediate removal of graffiti from buildings and public amenities. • Security. BIDS provide extra security to augment services from local police departments. Types of security services range from conventional security patrols to downtown "ambassadors" who have extensive customer service training to help consumers navigate through downtown. • Marketing and Promotions. Marketing programs aim to improve the overall image of downtown by forming collaborative promotional strategies, undertaking market research and working with the media. • Special Events. Special events reinforce downtown's drawing power as a destination, often targeting consumer markets that typically under - utilize the downtown. Z4 Streets & Highways Code §36500 et seq. 25 Streets & Highways Code §36600 et seq. Economic & Planning Systems, Inc. 99 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March ig. 2009 • Parking and Transportation. Where possible, BIDS manage and /or expand the parking supply within a central business district. BIDS also provide validation programs, management of municipal garages and advocacy for transit. • Economic Development. Many BIDS are providing services to attract jobs and investment to downtown business districts, including undertaking market analysis, developing data bases and structuring public /private financing for redevelopment projects. • Social Services. In larger cities, BIDS have become active partners with social service agencies to reverse the causes of homelessness, panhandling, and other street populations. For example, several cities have established maintenance programs that hire homeless people. • Capital Improvements. Long -range infrastructure investment projects are possible for BIDS with longer terms. Streetscaping projects or reclamation of green spaces have been financed through BIDS. Case Studies City of Corona: Corona Mall Business Improvement District Background The City of Corona is located in Riverside County, 19 miles northwest of Lake Elsinore, and has 148,000 residents as of 2008. The City of Corona first established a business improvement district in the 1970's as an assessment upon local business owners, part of a larger redevelopment effort focusing on urbanizing an under - developed downtown. While the district was successful during years in which the economy was robust, revenues waned significantly during downturns, leading the city to seek a basis for assessments that would produce more consistent revenue streams. Altering the district to assess real property, instead of businesses, appeared to be one method of accomplishing this goal. Re- forming the district required a vote from local property owners, who were at first unwilling to support the district's reformulation. By agreeing to construct or upgrade several parking areas, the City was able to gain support for a district, leading to its ultimate establishment in 2005. District Characteristics Objectives and Services The City of Corona's business improvement district, the Corona Mail Business Improvement district, spans 13 acres in the City's downtown. The district incorporates 45 parcels, containing approximately 70 businesses. The objective of the district is the maintenance of common areas within the district. Common areas are predominantly district parking lots, and common upkeep activities include pavement maintenance, cleanup, and lighting upkeep. As of Fiscal Year (FY) 2004 -05, the district collected approximately $273,000 in assessment revenues. BID Assessment Assessment levels are determined by the increase in the Los Angeles- Orange County- Riverside CPT over the base year (2004/2005) maintenance budget /assessment level, or based on an independent contractor's estimate of the cost of maintaining the district if the CPI adjustment is deemed insufficient. All businesses within the district were found in the engineers report to Economic& Planning Systems, Inc. 100 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 benefit similarly from the district, so that assessments were levied on a square foot basis, at around $0.85 per square foot per year during FY 2004 -05. Since the inception of the district, assessments have been levied only two out of the district's four years of operation, because of unexpectedly low levels of maintenance costs that made it possible for second year assessment revenues to fund maintenance costs over the last three years. City of Temecula: Temecula Valley Business Improvement District Background Incorporated in 1989, the City of Temecula, with a population of 95,000, is located in Riverside County, almost 17 miles southeast of Lake Elsinore. The City first initiated proceedings to create a business improvement district in 2005 in response to a study funded by the Visitor's Bureau that demonstrated significant potential to attract tourism to Temecula. District Characteristics Objectives and Services The district, named the Temecula Valley Business Improvement District, has the goal of sustaining and increasing the City of Temecula's visibility and attracting tourism through marketing efforts. Revenues are remitted to the City of Temecula's Visitor's Bureau, which determines marketing strategies and manages activities for the upcoming year. The district boundaries conform to those of the City, and membership is composed of all hotels operating in the City, of which there are currently 14. New hotels are automatically integrated as members into the district. BID Assessment The district raises revenue through an assessment that is based upon 2 percent of the rent charged by hotel operators per occupied room per night. Of these revenues, all are directed to the Visitor's Bureau except for 2 percent, which are kept by the City for administrative purposes. At the beginning of each year, the Visitor's Bureau constructs a budget for its activities based upon the previous year's revenues. These budgets are reviewed and receive comments from members of the district. At the end of each budget review, district members must vote to reauthorize the assessment by approving the budget. City of Monrovia: Myrtle Avenue BID Background The City of Monrovia, with a population of 39,000, is located in Los Angeles County, about 50 miles northwest of Lake Elsinore. As one of the oldest cities in Los Angeles County, the City experienced a period of rising crime and economic decline in the mid- 1960's providing the impetus for establishing the Myrtle Avenue BID by local merchants to revitalize the city's traditional "Main Street" downtown. District Characteristics and Objectives With the goal of promoting local businesses and revitalizing the downtown, the BID focuses its efforts and funding on promotions and marketing. There are about 210 businesses located on the twelve square blocks in the BID boundaries. The district is governed by an Advisory Board of five business owners, which are appointed by the Mayor and serve two -year terms. District Economic & Planning Systems, Inc. 101 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79 y009 revenues are collected by the City along with the business license tax. The BID is operated by city staff, which carries out advertising efforts and hiring based on the Advisory Board's recommendations. BID Assessment The BID enjoys annual revenues of about $6o,500, with assessments totaling approximately $40,000 and the remainder comprised of filming permit fee revenue passed through by the City. All funds are used for marketing and promotions, beautification, holiday decorations, and special events (i.e. movie nights and parades). Retailers and restaurants are assessed a small percentage of total sales as reported by the business owner and service- oriented businesses are charged a Flat rate of $25 to $50 per year. City of Burbank: Downtown Burbank BID Backoround The City of Burbank, with a population of 108,000, is located in Los Angeles County, about 66 miles northwest of Lake Elsinore. District Characteristics and Obiectives The Downtown Burbank BID (the Media City Center Mall) was formed in 2003 by downtown Property and business owners in partnership with the City of Burbank. It was formed to replace the Burbank Village BID. The Village BID, which was merchant -based and assessed business owners rather than property owners, was replaced because it failed to accomplish its goal of revitalizing the 30 -block downtown area. In order to realize this goal, the property -based BID will focus on providing better street signage, holiday decor, paseo upgrades and marketing and promotional activities. BID Assessment In 2007, the district had an annual budget of $720,000. Of the total budget, about 35 percent funded marketing and promotions, which included branding the district as an entertainment and restaurant destination through advertising, special events, and public relations. Specifically, general leasing support was provided in order to attract retailers, lamppost banners were created and mounted, and a website and 200,000 full -color brochures were designed. Another 33 percent of the annual budget funded capital improvements, which included efforts to ease traffic flow from the freeway to the downtown and efforts to fill parking structures more efficiently. Other services provided by the district include maintenance and security (15 percent of annual budget), advocacy and administration (13 percent), and savings to the district's contingency reserve (4 percent). In 2007, commercial property owners are assessed $0.16 per lot square foot per year, and $2.00 per linear frontage foot along San Fernando Boulevard between Magnolia and Verdugo. Industrial properties are assessed at 50 percent of the standard rate, and residential and non- profit properties are exempt from the assessment. According to the Downtown Burbank Partnership's 2007 Annual Report, since the formation of the property-based BID, property values have increased 34 percent and retail sales have grown 36 percent. Economic & Planning Systems, lnc. 102 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 City of Palm Springs; Main Street Palm Springs Business Improvement District Backaround The City of Palm Springs, with a population of 47,000, is located in Riverside County, almost 45 miles east of Lake Elsinore. Main Street Palm Springs, the business association for downtown and uptown areas, initiated the process of establishing a BID in 2006. District Characteristics Objectives and Services The district was established to create a funding mechanism to enhance marketing efforts and promote local businesses. Currently, there are about 700 members, which include local retail and professional businesses. Residential development is exempt from paying the district assessment. BID Assessment The district collects annual fees, which are charged based on the size of the business. The fees range from $250 to $500 and vary based on square footage or number of seats, in the case of restaurants and theaters. The Business Improvement District's fee is collected when the City collects the business license fee. For the past two years, annual revenues have equaled approximately $150,000, which have exceeded the cost to provide services authorized by the BID. The BID includes a business committee, which is authorized to decide how funds are spent annually. - City of Redlands: Downtown Redlands Business Association Background The City of Redlands, with a population of 71,000, is located in San Bernardino County, almost 26 miles northeast of Lake Elsinore. The Downtown Redlands Business Association (DRBA) was established in 1988 and comprises 10 blocks along State Street in downtown Redlands. District Characteristics Objectives and Services The Downtown Redlands Business Association's aim is to promote public events taking place in the downtown area; decorate public places within association boundaries; promote downtown retail activities, including acquisition, construction or maintenance of facilities to increase safety, convenience and appearance; and to provide the administrative services and facilities to assist with the above promotions and activities. The DRBA is managed by a Board of Directors of eleven members serving four -year terms. There are several committees established in order to oversee various association goals. Specific committees include the Ads and Events Committee, the Beautification Committee, the Market Night Committee, and the Parking Committee. BID Assessment The association charges assessments on all businesses located within the boundaries of the DRBA. This assessment is levied in addition to the ordinary license fee imposed on all businesses in the City of Redlands. For retail businesses, assessments vary based on the location of the business. The area is broken into three different zones of benefit. The assessment is calculated Economic& Planning Systems, Inc. 103 .�.bw.�o.�..=..�.a..- ...��•�o�� ^•�••+•� Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19. 2009 based on the amount of the business license tax paid by the business and the zone of benefit. For example, if the business is located in Zone 1, then the business must pay twice the business license tax to the DRBA. If the business is located in Zone 2, the business must pay one and a half times the business license tax to the DRBA. Charges differ for professional businesses, non- profit organizations, and financial institutions, public utilities, and miscellaneous space users. City of Escondido: Downtown Business Association of Escondido Background The City of Escondido, with a population of 142,000, is located in San Diego County, almost 41 miles south of Lake Elsinore. District Characteristics and Objectives The district was established by downtown business owners in 1989 in order to- promote and revitalize the area. Escondido's business improvement district is about 70 square blocks in size and includes about 700 member businesses. The BID provides security, promotions and marketing, and new business recruitment services. BID Assessment The City of Escondido collects annual assessments from businesses within the BID at the same time that business licenses are renewed. The assessment funds are forwarded to the Downtown Business Association and used for activities promoting local business in the district. Annual revenues generally total about $140,000. Fees vary based on the type of business and in which zone the business is located. City of Chula Vista: Third Avenue Vi /rage Association Background The City of Chula Vista, with a population of 228,000, is located in San Diego County, about 73 miles south of Lake Elsinore. The Third Avenue Village Association is comprised of a BID, established in the early 1990s and a PBID, established in 2001 and renewed for a ten -year cycle in 2006. District Characteristics and Objectives _ The BID and PBID comprise about 18 square blocks surrounding the city 's main street, Third Avenue. The district includes membership of about 300 businesses and uses its revenues to fund special events with the Third Avenue Village Association, promote local businesses, and attract customers downtown through marketing collateral. Additionally, the district maintains ten parking lots and employs a crew responsible for maintenance and street cleaning. BID Assessment Through the BID, the district generates revenues from local businesses, which are collected by the City along with the business license fee. The PBID, a property -based assessment, has an assessment equal to $10.77 per linear foot of frontage for residential and nonresidential properties located along Third Avenue ($1.84 per linear foot of frontage for properties not located along Third Avenue) plus $0.087 per land square foot. Additionally, the district IU4 ..v.mou.�<m........,.,,M.... Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 generates revenues to fund operating costs from activities such as farmers' markets. This year (FY 2008 -09), the district has an operating budget of $457,000 and expects that revenues will total $324,000, which, because of the economic downturn, is less than revenue collected in previous years. Generally, costs are budgeted so that they do not exceed revenues. But, in order to ensure that expenses can be covered, the district maintains reserves of 15 percent each year. Implications for Lake Elsinore Existing Downtown Merchant's Association Downtown Lake Elsinore currently supports a merchants association, the Lake Elsinore Downtown Merchant's Association (DMA), which performs — at a smaller scale — similar functions to that of a BID. The DMA was formed to preserve the historic character of downtown as well as create a forum where local merchants can discuss issues and voice them to the City. The DMA primarily sponsors community events such as the farmer's market, car show, and holiday celebrations. The association has between 10 and 12 member businesses and all downtown businesses may voluntarily join the DMA. The association is run by Board Members who are elected by the DMA's active members. General meetings and board meetings are each held once a month. The organizational structure recently changed such that the DMA is led by a governing body rather than a president, which encourages each member to take more responsibility rather than leave action to the president. Revenues are generated by quarterly membership dues, which are $45 per quarter, as well as funding agreements with the City and Chamber of Commerce. The City and the Chamber of Commerce co- sponsor many DMA events in exchange for publicity. The City helps facilitate DMA events by helping with license fees for the farmers market and providing funding for advertising. But, for the most part, the DMA organizes downtown events on its own with limited support from City staff. Despite the success the DMA has been able to achieve in regard to attracting patrons to events downtown, the DMA is unable to address many of the significant challenges facing downtown, including crime, vandalism, and an evident homeless population. In addition, there is a perceived dearth of parking options downtown, and downtown events could be bolstered by improved coordination between the City and DMA, increased revenues, and a unifying vision tying these events to downtown. Capitalizing on the established structure of the DMA and coordinating with the City as part of the implementation of the Downtown Master Plan, a BID could be formed to provide enhanced municipal services such as public safety and ongoing maintenance (e.g., graffiti abatement, litter removal). In addition, a BID could facilitate the creation of marketing and public relations materials that present a unifying vision for downtown retailers and events. Potential Assessment Revenue and Financial Feasibility As evidenced by the case studies, there are multiple methods of assessing downtown properties. Assuming a basic assessment methodology of $.50 per building square foot per year, existing commercial properties (office and retail) within the Downtown Master Plan boundary could Economic & Planning Systems, Inc. 105 Lake Elsinore Downtown Master plan Market Study Revised Draft Report March 19, 2009 generate approximately $195,000 annually.26 By 2035, downtown properties (office and retail) could generate between approximately $265,000 and $280,000 annually based on the retail and office projections shown in Table IV -3 and Table V -2, respectively. Additional revenues could be collected by assessing residential properties as well. The feasibility of businesses or property owners incurring this additional cost depends on the extent to which the BID increases rent or sales revenues in an improved downtown. Currently, rents in downtown Lake Elsinore are approximately $12.00 per building square foot per year. An annual assessment of $.5o per building square foot represents an increase of 4 percent above current triple -net lease retail lease rates of $1.00 in the Historic District - an increase that EPS believes should be achievable if Lake Elsinore's BID has an impact even a fraction of that found in Burbank (described above). Downtown Parking Strategies As downtown Lake Elsinore prepares to accommodate significant new residential and commercial development over the next thirty years, the Downtown Master Plan envisions the provision of additional parking through additional surface lots and structured parking facilities. One method by which downtowns have addressed providing and funding parking to serve current and future development is through the establishment of a parking district. This section provides a brief overview describing cities that have established parking districts. The case studies that follow sought to address the following questions: • When and why was the parking district established? • What types of development does the parking serve? • What amount and type of parking is provided by the district? • If parking structures were developed, how were they Financed and how was the timing of their construction planned? • What other types of funding does the parking district receive? Parking district Definition and Financing Authority In the State of California, Vehicle Parking districts are used by local governments to finance the costs of building and operating public parking facilities. To finance the costs of the project, the government may levy assessments and issue bonds. These districts are initiated by a petition of landowners and approved through a public hearing unless a majority of landowners (51 percent) submit written protest. Once formed, the districts are managed by an appointed commission. The authority for the establishment of parking districts was created with the passage of the following two laws: 26 Based on estimated square footage within the Downtown Master Plan boundary as shown in Table IV -3 (retail) and Table V -2 (office). Economic & planning Systems, Inc. 106 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 • Parking District Law of 1943.27 This law allows Cities and Counties to form a district and levy assessments to finance the acquisition of land and the construction, operation, and maintenance of parking facilities and garages, as well as the costs of engineers, attorneys, and other staff needed to complete the project. Additionally, it authorizes the use of meters and user fees to raise funds for parking expenditures. • Parking District Law of 1951.28 This law allows Cities to form a district and levy assessments to finance the acquisition of land, the improvement and construction of parking lots and facilities, and the costs of employee salaries. These parking districts can also issue bonds to finance improvements. Case Studies City of Stockton Backoround The City of Stockton's Central Parking district (CPD) was originally established in 1967 as a benefit assessment district to fund the acquisition, improvements, and maintenance of off- street vehicle parking. However, it was changed to a Community Facilities district in 2001 due to constraints associated with the prior benefit assessment district. Assessments within the new district are based on factors such as parking - deficiency, building square footage, parcel acreage, and the proximity to existing parking. The City owns all of its parking structures and lots, but contracts its maintenance services to another vendor. The CPD is operated by an Advisory Board appointed by the City Council. Parking Inventory The CPD currently has three parking structures and seven surface parking lots. The Channel Street Garage was built in the 1960s and has 318 spaces. The Market Street Garage was built in the early 1990s and has 782 spaces. The Essential Service Garage was built in 2001 and has 700 spaces. Two additional garages, Coy and Arena, were constructed in 2004. The Coy Garage has 575 spaces, and the Arena Garage has 600 spaces. Surface lots make up a total of approximately 1,300 spaces. Land Uses in the District The CPD serves a multitude of uses, including retail, office, and entertainment. Future uses will include residential. Most of the Parking district's lots and structures are situated in the government and central business district of Downtown Stockton serving the nearby office, retail, and entertainment park. The entertainment core consists of the proposed Downtown Cineplex complex enveloped by a variety of existing and proposed retail and restaurants uses. 27 California Codes Streets and Highways Code Section 31500 et. seq. 28 Ibid. Economic a Planning Systems, Inc_ 107 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 Financing All of the CPD's parking structures were financed with bond proceeds. Two additional structures are under construction, and will also be financed with bond proceeds. Capital improvements, maintenance, and operating expenses of the CPD are funded by an assessment on all property located within the district, charges for monthly and hourly parking privileges, and other income from contract agreements with other entities. Uses include public parking, hourly, monthly and daily use. Parking permits are $32 to $56 per month, and $1.00 per hour for hourly usage. City of Santa Cruz Background The City of Santa Cruz's Downtown Parking district was established in 1957 under the State Parking District Act with the purpose of developing and operating public parking in the downtown business district. There are four garages in the downtown,. and the City controls about 65 percent of the parking supply in the Downtown Parking District area. Parking Inventory There are currently a total of about 4,600 parking spaces in the Downtown Parking district area, including about 3,000 City- operated parking spaces and 1,600 privately operated spaces. The privately operated spaces are primarily no- charge spaces with about 425 spaces for private use and 1,175 spaces for public use, primarily for use by business customers only. The City- operated spaces include a wide variety of parking types dispersed throughout the district. Land Uses in District The Downtown district serves retail, residential, office, and nighttime entertainment. The district includes about 400 residential units and over 1.5 million square feet of nonresidential building space, including over 500,000 square feet of office space with the remainder retail space. The retail space includes a broad range of businesses including specialty retail, apparel, eating and drinking options, and entertainment venues. Office space is occupied by a range of public and private employers. Financing The Downtown Parking district receives revenues from property owners, parking deficiency assessments, meter collections, parking space rentals, and building rentals within the district. These revenues finance (1) the maintenance, enforcement, and collection associated with parking meters within the district; (2) enforcement and maintenance on parking lots and garages in the district; (3) attended parking in the Locust and SoquelJFront Garages; and (4) debt service for downtown parking facilities. For fiscal year 2003 -2004, the revenue generated within the district was approximately $30,000 from property assessments, $700,000 from deficiency fees, $417,000 for monthly parking permits, and $287,000 from attended garages. Parking rates are (1) $.15 to $.75 per hour for meters; (2) $.50 for the first three hours, $.75 per hour for next two hours, $1.00 for the following two hours up to a $5.00 daily maximum for garages; (3) $1.00 per day or $.15 per hour up to a 12 hour maximum for lots; and (4) $16 to $25 per month for permits. Economic & Planning Systems, Inc. 108 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 2009 City of Monterey Background The City of Monterey has four parking districts which were designed to purchase parking lots and finance the construction of parking garages to improve parking and traffic flow in the City. The four parking districts, which are also community business districts, are Cannery Row, Downtown, South Cannery Row, and New Monterey_ Cannery Row and South Cannery Row are tourist - oriented retail and restaurant districts; Downtown is an office, residential, retail and restaurant district; and New Monterey is a neighborhood retail and office district. The City also has four parking adjustment districts, which implement an equitable fee system for any landowner who wishes to develop or redevelop property in such a manner that increases the need for parking within the district. The Downtown district and the Downtown Parking Adjustment districts were established in 1979 to pay for the Downtown parking structure. Businesses that could not develop their parking on site paid into the Parking Adjustment district to have use of the downtown garages. The South Cannery Row Parking district was established in 1981, and New Monterey Parking district was also established in the 1980s. Parkino Inventory and Land Uses in the District The lots and garages service visitor parking to community business districts throughout the City. The City currently operates 31 parking facilities. The facilities range in size from 10 space parking lots to the 1,003 space state -of- the -art award winning Cannery Row Parking Garage. These facilities total 3,504 off- street parking spaces. In addition to the off- street spaces, there are 3,312 on- street spaces in the Downtown, Cannery Row, and Lighthouse areas of the City. Financing The parking districts and parking adjustment districts are financed with revenue bonds, fines, and permits and parking meter revenue. The Cannery Row Parking district was established in 1974 when an Assessment district was established to buy land to develop a parking lot. A charge was levied on the assessed value of surrounding businesses to pay for the land until the district had enough funds to pay off the debt with its own income. After three years, the district had sufficient cash flow to pay the debt. Thereafter, property owners were relieved of the payments. In 1988 revenue bonds were sold to finance the development of the Cannery Row Parking Garage. Since then, the district has been able to retire the debt with its own cash flow. City of Mountain View Parkino Inventory and Land Uses in the District Through a prior bond issue, the Downtown Parking district has provided approximately 1,022 parking spaces supporting roughly 530,000 square feet of nonresidential floor area. Downtown Mountain View is largely perceived as the four blocks on either side of Castro Street between Evelyn Avenue and Mercy Street, comprising the historic retail district of the City. It is characterized by a concentration of activities, including civic functions and cultural events, as well as a vital residential and commercial district, including office buildings projects and mixed - use complexes. Economic & Planning Systems, Inc. 109 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 79, 20o9 There are single - family residential neighborhoods adjoining the downtown area. The single - family residential area will be separated by multifamily residential or mixed residential and office uses. developments. Financino The in -lieu parking provisions in the Downtown Precise Plan are intended to support shared Public parking facilities. Properties within the Parking district are allowed to satisfy some or all of their required parking for new construction through payment of an in -lieu parking fee rather than constructing the parking on -site. The in -lieu fee is a one time fee that is paid to the Parking district and is used to construct new public parking. The amount of permitted in -lieu pa ng varies depending on the location of the property. The in -lieu- parking allowance is highest for properties fronting on Castro Street, where renovation is encouraged, and it is most difficult to provide on -site parking. city of Napa Backoround In downtown Napa, nonresidential development within the Parking Exempt district is not required to provide on -site parking. Rather, businesses within the district pay a surcharge on their business license fee, and this surcharge is intended to pay for the construction and maintenance of parking garages. However, the surcharge is no longer adequate to construct new parking facilities. In 2004, the City Council adopted new parking standards for the Downtown Commercial zoning district, otherwise known as the Parking Exempt district, to cover the costs associated with new parking facilities in downtown Napa. These standards provide a more "urban" standard for Downtown in order to promote a more efficient use of land and good design by encouraging consolidation of parking into future parking structures. Par in Invento and and Uses i the District The downtown Parking Exempt district encompasses approximately 24 blocks. There are 574 spaces in 13 public parking lots, 869 spaces in 3 parking structures, and 965 on- street spaces, totaling over 2,400 public parking spaces. The parking services office, retail, and visitors to the downtown area. In the future, new parking structures and surface lots will support mixed -use projects for commercial and residential uses. Financing The City will soon implement impact fees as financial leverage to build parking garages, which, when constructed, would be available to serve both new and existing businesses and their customers. Because constructing on -site parking is costly and utilizes land that could otherwise generate revenue for the property owner, impact fees will shift the administrative burden of parking requirements from developers who do not want to provide the required parking spaces to the City. The impact fees will likely be structured to provide sufficient revenue to the City to leverage other resources to build future parking structures and to encourage future redevelopment activity. A variety of financing mechanisms and sources will need to be utilized to bridge the funding gap including local transportation funds or revenue bonds. Economic a Planning Systems, Inc. 110 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19. 2009 Implications for Lake Elsinore In the short term, it is likely that pursuing a parking district strategy may not be financially feasible for businesses or properties within the district, especially if the City establishes a business improvement district. Rather, in the short term, the City should utilize a portion of the numerous vacant parcels currently in its ownership for the provision of public parking. While some of these vacant parcels should be designated for catalytic development sites to spur additional development within Downtown, some vacant parcels can be designated as surface parking lots, an expense that is significantly less burdensome than the cost of a structured parking facility.29 In the longer term, as the number of businesses and civic amenities in the Downtown increase and result in a requirement for additional parking capacity, a parking district would be a viable strategy for Downtown. Specifically, an in -lieu parking fee program could be established to meet the following objectives: • Reduce or eliminate the driveways or other urban design features related to the provision of on -site parking (e.g., "dead spaces "), which improves the pedestrian shopping environment along the commercial blocks, • Aid redevelopment efforts by providing owners of smaller properties in particular with the flexibility of meeting parking requirements off -site; • Through the creation of public parking that is shared among various uses in the district, it is possible to reduce the overall parking needed to support future development; and • In conjunction with a coordinated signage program, establish an easily understandable parking program for visitors. - The likelihood of success in establishing a parking district with an in -lieu parking fee is increased when a community is anticipating a rapid rate of development in a concentrated area, as Lake Elsinore will experience as the Downtown Master Plan is realized. Major development projects are more likely to generate sufficient revenues that can be collected to finance centralized parking facilities. The funding generated, however, should supplement the City's existing resources (land, capital; personnel), and complement an existing program of municipally - constructed off -site parking.30 Mechanisms for I ncentivizing Standard Hours of Operation Successful shopping districts often feature a concentration of businesses that operate on a similar and consistent schedule, an operations practice that ensures customer access . to a variety 29 On average, surface parking lots cost approximately $4,000 per space while structured parking facilities cost approximately $20,000 to $30,000 per space. 30 Smith, Thomas P. Flexible Parking Requirements, American Planning Association, Planning Advisory Service Report No. 377, August 1983. Economic a Planning Systems, Inc. 111 take Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 Of retail stores. Once established, this practice can provide a stable and increased source of customers for participating businesses. This section describes some of the key characteristics of having standardized hours of operations, as well as the challenges associated with incentivizing Participation by business owners and implementing the practice on a district -wide basis. Consumers are generally motivated to limit the number of separate shopping excursions required to purchase their goods. As a result, standardizing hours of operation across businesses in an area can encourage consumers to spend more of their retail dollars in a single shopping district that offers a variety of goods, thereby increasing district -wide revenues. To support the potential for additional retail dollars, some jurisdictions have implemented incentive programs or other mechanisms to standardize retail business hours of operations. For example, the City of Alameda, California has incorporated operating standards including minimum hours of operation into lease agreements for storefronts on city-owned parcels, and required food service tenants to be open seven days per week for both lunch and dinner service. However, individual businesses do not always concur with the value of the benefits offered by district -wide standard hours of operations. Certain types of businesses may find it difficult to justify the cost of opening early or remaining open later on a given day compared to the typical visitation hours of their target customers. For example, if a book store generates most of its sales on evenings and week -ends, it may be cost- prohibitive to conform to district wide hours that begin at 9 am on week -day mornings. As a result, many incentive programs have met with little to no adherence to standardized hours and days of operation. • In the City of Redlands, members of the local business district agreed in principle to synchronize hours for the district's benefit, but in practice many storefronts departed from this agreement. When the City sought out property owners to discuss integrating standards into lease agreements, tenants responded in strong opposition, with the most vocal businesses claiming that they would be unfairly burdened by the imposition. • In the City of Monrovia, local businesses espoused a willingness to operate their businesses in the evenings if the City would provide better street lighting, but then did not significantly adjust their hours after improved lighting fixtures were implemented. Case studies such as these imply that standardization may require additional incentives or penalties beyond the purported intrinsic benefits. Since its initial attempts to promote uniform hours downtown, the City of Redlands has recently instituted an innovative loan /grant incentive program in which restaurants are offered $100,000 if they agree to operate 6 days a week, until at least 9PM. The city instituted this program as an economic development effort to attract quality restaurants to downtown, but this type of program could be used to also enforce standardized operations for other types of retailers. The City of Monrovia is contemplating two discrete measures to enforce standard business operations. The first measure, implemented through city ordinance, is to mandate minimum days. and hours of operation as a condition of receiving a business license. The second measure, in coordination with the Myrtle Avenue BID, is to waive the annual assessment in Economic & Planning Systems, Inc. 112 Lake Elsinore Downtown Master Plan Market Study Revised Draft Report March 19, 2009 exchange for adherence to standardized days and hours of operation. The city currently favors the second measure, which is a voluntary program, over the first measure, which could encounter legal issues regarding a mandatory operational schedule. • Some cities have used incentives, such as the construction and funding of off-site customer parking, to motivate businesses to alter their hours. Other potential incentives include the provision or support of expanded public transit, public safety services, and marketing efforts. Implications for Lake Elsinore Many cities face the issue of downtown merchants operating their businesses according to an inconsistent schedule. However, there are few formal and successful programs cities have implemented to incentivize businesses to operate according to a consistent and similar schedule. Similar to the City of Monrovia, the City could establish a business improvement district, and through this mechanism offer financial incentives (e.g., assessment waiver) in exchange for the merchant to agree to operate according to a standardized schedule. For the vacant parcels current within City ownership, the City might choose to retain ownership and administer a master lease agreement, similar to the mechanism used in Alameda, which specifies days and hours of operation. However, this approach is dependent upon the City's desire to retain ownership, as well as administer and enforce a master lease agreement. While not every business may be incentivized through any programs the City may choose to implement, it will be important for the City and private landlords to target current and future key businesses that have the ability to attract patrons during a wide range of business hours, including weekday evenings and weekends. Economic & Planning Systems, Inc. 113 DOWNTOWN CODE DOWNTOWN MASTER PLAN April28, 2009 Introduction The Lake Elsinore Downtown Master Plan will have three elements; a vision plan, an economic element and a development code. Cooper Corry has included downtown solutions in the Master Plan team to prepare the development code. The approach that will be used by downtown solutions (a division of Civic Solutions) will be to prepare a downtowncode. About the Devglopmgnt Code downtowncode is a hybrid type of regulatory control developed by downtown solutions which uses some conventional zoning, form -based zoning, municipal (non- zoning) ordinances and some SmartCode regulations and blends . several of the missing ingredients seamlessly into a specific regulatory approach which is custom designed for your historic downtown environment. downtowncode recognizes that regulations for a downtown must extend beyond zoning and must: • Address permitted and prohibited first -floor uses • Provide for unique and historically appropriate signage types • Provide reduced parking requirements • Provide for the appropriate building forms and frontages based on the specific building typology of your downtown. • Provide for the specific storefront design parameters dealing with solid to void ratios, design basics and sign locations. • Mandate maximum allowable square footages for some ground floor retail uses • Provide a mixed -use ordinance that articulates how much and what kind of commercial activity may be on the first floor, allowable density and parking regulations. The regulations must also deal with the issues of noise, odors and hours of operation. • Stipulate "build-to" lines for storefronts at the back of the sidewalk. • Consider how first floor use restrictions will be mandated over time to avoid storefront vacancies • Contain ordinances for the provision of mixed use projects and their special regulatory needs. • Consider ordinances dealing with formula -based business enterprises and how to best control them • Regulate outdoor dining and how it impacts the pedestrian environment • Address sidewalk "A" frame signs. • Address the placement and design of public art including murals. • Regulate Outdoor Sales • Provide for Mid -Block Poseo's or Walkways • Address Historic Preservation • Provide for densities and building types that accommodate affordable housing os needed. The Lake Elsinore downtowncode The downtowncode for Lake Elsinore will be an important influence in the implementation of the Downtown Master Plan. The code will address new development on private property, describe how it will relate to the public realm, regulate permitted uses, and will include standards for ensuring compatibility of the differing uses in what is planned to be an urban environment. The document will be organized as indicated in the attached Table of Contents, which lists the topics that will be addressed in the form of development regulations. When adopted, the code will be the single regulatory document for development within The Master Plan area. The downtowncode will supercede the zoning code, and other development standards and guidelines, in the downtown, although it will make reference to the zoning code wherever appropriate. The code will be presented with graphics and illustrations to guide and direct the City and landowners to produce the vision as embodied in the Master Plan. For example, the following At- A- Glance page excerpts: The code will also address permitted uses for each General Plan land use in each of the five Master Plan Districts (Gateway, Garden, Cultural, Historic and Waterfront). The uses permitted in each area will be those that promote the implementation of the Master Plan and will not allow uses that would defeat the goals of the plan. in order to make the determination of permitted uses "user friendly" the document will present this information in a matrix or chart that classifies uses by district or use category. Excerpt pages of the use matrix are shown on the following page. Lake Elsinore downtowncode -2- downtown solutions ' -- Counlw "vgCa Special Provisions When the downtowncode is presented for City review, it will include certain special provisions that are aimed at ensuring implementation of the goals of the vision document. These provisions will include the following: t. Protection for Non - Conformina Uses and Structures, The Master Plan is a blueprint for the future downtown Lake Elsinore, and as such it clearly implies change. The downtowncode Will support the changes envisioned through its numerous development code provisions. This raises the issue of the right of existing owners and businesses to continue with uses and structures already in place. The code will provide that existing uses may continue indefinitely, and owners will be allowed to make. limited additions, remodel -and fully maintain their property during the interim_ It will only be when an owner proposes to put new development on their property that the development code requirements will apply. 2. Mjnimum Development Site. In order to ensure that new development occurs at a scale that will produce the urban environment envisioned in the Master Plan, the code will require a minimum of one half acre in order to provide for development of sufficient scale to support the intensity of use specified by the FARs or residential densities of the plan. Further, it will offer an incentive to larger development sites by setting a threshold of one acre, together with standards for high quality, to qualify for redevelopment agency assistance. This requirement will not be a minimum lot size; it only affects the size of a single development project, which will usually be achieved by combining several smaller lots into a building site. This may occur when a single entity purchases adjacent lots or when adjacent neighboring owners enter into a partnering arrangement. Lake Elsinore downtowncode -3- downtown solutions 3. Main Street Gardens. The code will require the gardens along Main Street in the Garden District to be established under a mechanism for private common ownership and maintenance. 4. Project Entitlement. The downtowncode will provide for a streamlined development review process that relies on the code to establish the essential standards for desired development. Proposals that meet or exceed the downtowncode requirements will be on a fast track for approval through the DRC. Coordination with the Master Plan Process The downtowncode has many interrelated parts, each of which must be carefully correlated with the Master Plan vision document, the City Zoning Code and other City standards and policies. The final administrative draft will be the result of close collaboration between consultants and City Staff and will be presented to the Planning Commission and City Council for adoption along with the Master Plan vision document and other elements of the Master Plan. La Ke eismore aowntowncode -4- downtown solutions TABLE OF CONTENTS 1.0 DowntownCode - Land Use and Development Regulations 1.1 Administration 1.1.1 Purpose 1.1.2 Applicability 1.1.3 Administration 1.2 General Provisions 1.2.1 Purpose 1.2.2 Definitions 1.2.3 Interpretations 1.2.4 Amendments 1.2.5 Severability 1.2.6 Establishment and Maintenance of the Land Use Districts • • Gateway District • • Garden District • • Historic District • • Cultural District • • Waterfront District 1.2.7 Review of Projects 1.2.8 Reference to Design Criteria 1.2.9 Non- conforming Uses and Structures 1.2.10 Conditional Use Permits 1.3 Development Standards 1.3.1 At- A- Glance Sheets • Key Map • Building Placement & Size • Density/ FAR • Principally Permitted Uses • Potential New Development • Parking Requirements • Allowable Building Types • Allowable Building Frontage Types • Allowable Sign Types • Street Sections Descriptions: 1.3.2 Building Placement 1.3.3 Potential New Development 1.3.4 Principally Permitted Uses 1.3.5 Parking 1.3.6 Allowable Building Types 1.3.7 Allowable Building Frontage Types 1.3.8 Allowable Sign Types 1.3.9 Street Sections 1.4 Detailed Land Use Matrix 1.5 Standards for Specific Land Uses 1.5.1 Applicability to Lake Elsinore Municipal Code 1.5.2 Mixed Use Projects 1.5.3 Residential Projects 1.5.4 Downtown Commercial Projects 1.5.5 Dt Business /Professional Projects 1.5.6 Dt Public /Institutional Projects 1.5.7 Dt Recreation and Open Space 1.5.8 Outdoor Retail Sales 1.5.9 Parking Structures 1.5. 10 Public Art 1.5.11 Additional provisions 1.6 Downtown Amenity Requirements and Incentives 1.6.1 Matrix/Table 1.6.2 Incentive Zoning 1.6.3 Downtown Amenities Table (description) 1.7 Definitions 1.73 Applicability and relationship to Lake Elsinore Municipal Code 1.7.2 Additional Definitions Lake Elsinore downtowncode -2- downtown solutions i 8 a � � S G �1• �/ 0� �jw , „ � n � -