benning minnesota study

8/3/2019 Benning Minnesota Study

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SWOT Analysis, Retail Demand Analysis, Strategy and Preliminary Planning DiagramsBenning Road - Minnesota Avenue

DC Retail Action Strategy

December, 2009


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Benning Road - Minnesota Avenue SWOT Analysis


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Currently, this submarket is perceived as economically challenged, with lagging socioeconomic

indicators and aesthec appeal. Despite this appearance, the area around Benning Road and

Minnesota Avenue is experiencing signicant redevelopment and has the potenal to become

a more robust and integrated submarket. It is a true transional community with various

community assets, including a strategic locaon: it is proximate to a D.C. government oce

building (currently under construcon) and the Parkside development and it has excellent

access via two Metro staons, as well as East Capitol Street, Minnesota and Kenilworth

Avenues, and Benning Road.

Minnesota Avenue is zoned as commercial forthe enrety of the submarket. Running parallel

to Minnesota Ave is a disnct commercial-

light manufacturing corridor along Kenilworth

Ave/Metro rail tracks. Benning Road is zoned

sporadically as commercial major areas include

the East River Park center near the intersecon

with Minnesota Avenue, as well as the second

node by the Benning Road Metro stop. The

surrounding area is otherwise residenal, with

several large parks including Anacosa Park, Fort

Dupont, and the Naonal Arboretum, as well as

smaller parks such as Forts Chaplin and Mahan.

Zoning

Overview

Introduction

Boundaries

Node 1: Minnesota Avenue from Grant Street

NE to East Capitol Street; Benning Road and Dix

Street, both from Minnesota Avenue to 40th

Street NE.

Node 2: Benning Road from Blaine Street to A

Street, SE

= Core commercial area


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Retail Opportunity

Minnesota Avenue

The intersecon of Minnesota

Avenue and Benning Road marks

the major retail node of this

submarket. Compared to other

commercial areas in the vicinity,

it has more potenal to become a

neighborhood-serving, and perhaps

even a regional, desnaon. This

area has crical mass, especially

around the East River Park

shopping center, which currently

has mulple anchors like CVS,

Safeway, and Murrys. The majority

of retail is price-point sensive,which is consistent with the areas

economic indicators. Change in

this submarket is parcularly

evident in this node; a large-scale

redevelopment is currently being

considered for both sides of the

main intersecon anchored by East

River Park (see 1B on map).

Benning Rd and E. Capitol StThe area around Benning Road and

East Capitol Street is more limited

as a retail desnaon compared to

Node 1. Blocks here have limited

depth and less crical mass because

of adjacent housing. Parkland also

makes much of Benning Road feel

residenal. Retail, which begins

around 44th Street, is local and un-

anchored by a major retail tenant.

1

1A

2

NODE 2

KFC

Food Mart

Dennys

Shrimp Boat

Popeyes

Footlocker

Subway

Yums Carry-Out

Hair and Wig

Liquor

1B 21C

NODE 1

H+R Block

Apex Pharmacy

New Garden Carry-Out

First Cash Advance

AutoZone

Shop Express

RainbowLocker Room

Yums Carry-Out

Susan Fashion

CVS

Safeway

Shoe City

Eddies Outlet

Lot Stores

Beauty Zone

Subway

99 Days

Murrys

Payless Shoe Store

Liquor shop

Shoe Stop

Foot Locker

McDonalds

Cibank

Wachovia

Bank of America

Pizza Hut

Laundromat

Dominos

Dannys Subs & Chinese

Discount Mart

1

2

Note: Tenant lists do not include all businesses located in the submarket.


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Retail Node 1: Minnesota Avenue

The Minnesota Avenue corridor can be divided into

3 sub-nodes: Upper Minnesota, Middle Minnesota,

and Lower Minnesota.

B - Middle Minnesota Avenue is more engaging,

with an old theater and a colorful mural in East River

Park. However, major retail anchors are not visible

from Minnesota Avenue. Fast-food and banks cluster

near Dix Street. The Chartered Family Health Center,

set far back on the west side of Minnesota Avenue,

breaks the retail streetscape. Good depths represent

a great opportunity for redevelopment.

C - Lower Minnesota Avenue gains a southbound

lane, has a starker streetscape, and is lined with gas

staons and carry-out shops. However, the east side

of the street is very residenal.

A - Upper Minnesota Avenue is anchored by the

Minnesota Avenue Metro and construcon of a D.C.

government building. Across the street is a shallow lot

with a strip mall and auto shops. The intersecon of

Minnesota Ave and Benning Road is a clear boundary,

as Benning Road slopes up to Kenilworth Avenue.

A

B

C

= Major Intersecon

= Minor Intersecon

= Neighborhood Intersecon

= Sub-node A

= Sub-node B

= Sub-node C


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Retail Node 2: Benning Rd and E. Capitol St

B - East Capitol Street and the

Benning Road Metro staon are

the center of this small retail node.

This part of Benning Road, which

is surrounded by houses, is doed

with gas staons and fast food

chains. There are a few vacant yet

eclecc older buildings which lend

charm and authenc appeal to the

node. The Benco Shopping Centercontains several marginal goods and

services tenants.

A - Fort Mahan Park (which separates

nodes 1 & 2) lines much of Benning

Road from Minnesota Avenue to 42nd

Street, giving the street a woodsy,

residenal feel. Buildings here

are community-orienteda public

library (undergoing renovaon),

the Marshall Heights community

development center, and a Bapst

church are all located here. Benning

is residenal unl 44th Street.

The smaller Benning Road corridor

can be divided into 2 disnct sub-

nodes: Fort Mahan Park and East

Capitol Street.

A

B

= Major Intersecon

= Minor Intersecon


= Sub-node A

= Sub-node B


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Retail Inrastructure

In general, the streetscape along

Minnesota Avenue is stark, with

wide concrete sidewalks that have

patches of brick and grass but fewtrees. Minnesota Avenue south of

Benning Road is the dominant retail

corridor; however, even in this

area, there are large gaps of non-

retail uses and parking lots occupy

signicant space by the street,

which gives the corridor a heavily

paved appearance. There are 2

lanes of trac in each direcon

unl Blaine Street, when the street

widens to 3 southbound lanes.

Along Benning Road, the street is

more residenal than Minnesota

Avenue. Fort Mahan Park runs

alongside a large stretch of Benning

Road; across the street, a narrow

sidewalk is surrounded by grass.

This residenal feel connues unl

44th Street, the beginning of thesecond retail node.

Streets & Blocks Intersections Buildings Alleys & Service

The main intersecon is located

at Benning Road and Minnesota

Avenue. Here, Benning Road

experiences a signicant elevaonchange leading to a raised

highway, Kenilworth Avenue. This

intersecon experiences major

commuter trac from the Maryland

suburbs because of limited bridge

crossings. The southern half of the

intersecon marks the beginning

of the areas major retail center,

while the northern half contains

marginal retail such as auto shops.

Minnesota Avenues intersecon

with East Capitol Street is large,

but the blank streetscape and

underulized corner lots do

not reect that. Another major

intersecon is located at Benning

Road and East Capitol Street.

This intersecon includes several

gas staons, as well as the BencoShopping Center.

Most of the buildings along

Minnesota Avenue are older 1-

story stone buildings. Typically,

the lower part of the facade is glasswith an awning overhead. There

are a few notable buildings in the

area: an old theater that currently

contains a Subway and Beauty

Zone, a mural on a building in the

East River Park parking lot, and

a bright pink restaurant at 4414

Benning Road. The residences

lining Benning Road and the lower

secon of Minnesota Avenue are 2-

or 3-story brick apartments. South

of East Capitol Street, new single-

family homes are in good condion

along Minnesota Avenue, but run-

down near Benning Road. There

are also several buildings under

construcon, most importantly a

350,000sf D.C. government oce

building adjacent to the MinnesotaAvenue Metro staon.

There is no dedicated space for

service and loading for most of the

submarket. The excepon is larger

anchors such as Safeway, whichhave a dedicated rear loading zone.

There are a few visible dumpsters

at the larger buildings (e.g.,

McDonalds and some apartment

complexes). The sidewalks along

Minnesota Avenue are lined with

trash cans, so the streets appear

to be relavely clear of lier. Trash

is more noceable along Benning

Road, which has a more isolated,

residenal feel alongside Fort

Mahan Park.


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Strengths

The construcon of a large D.C. government oce will bring new employees to the area and increase retail demand

The Benning-Minnesota submarket is expected to have signicant residenal growththe Parkside development in parcular, with its small retail

component, will help to build market credibility in this area of the District

Redevelopment along the rivers edge (ie. Baseball district, Poplar Point) is pung pressure on this upstream neighborhood to change The area has a large amount of open parkland, including Fort Mahan and Fort Chaplin Parks

It has easy Metro access to 2 stops: Minnesota Avenue and Benning Road

The area has access to 2 major arteries: I-295 (Kenilworth Avenue) and East Capitol Street

The future streetcar terminus has been proposed at Minnesota Avenue

There are many new development opportunies in the gaps along major commercial corridors

Weaknesses

Mulple ownership of commercial buildings translates into a lack of control and consensus among stakeholders

The streetscape is stark and there are several gaps

Pedestrians are secondary to auto traffic on Minnesota Avenue

Major retail anchors are hidden at East River Park, breaking retail rule of clear access and visibility

Lack of retail diversity shows there is no comprehensive merchandising strategy (there are 2 Foot Lockers and Subways)

Physical retail space is not in good condition

Railroad tracks impose a strict boundary, exacerbang the Anacosa Rivers physical/psychological barrier

Opportunities

Develop retail and other mix of uses appropriate for a future transit hub (with scale-appropriate Transit-Oriented Development), with Minnesota

Avenue as a clear main street

Create a main street, utilizing land all the way to the railroad tracks Create a merchandising strategy, especially to accommodate demand from an increase in employees

Brand the district to improve the poor-quality streetscape

Implement streetscape guidelines to promote a pedestrian culture on Minnesota Avenue

Redevelop underulized Discount Mart lot to establish a stronger corner at Minnesota Avenue and East Capitol Street

Plan for an evolving market (for example, a more auent Benning Heights)

Threats

Multiple ownerships might not work together to support the overall merchandising strategy and prepare/engage change

The success of Benning Rd - Minnesota Ave also depends upon improvement of neighboring areas (ex. Nannie Helen Burroughs)

There is no organization of the district to create an urban brand or fabric

SWOT Analysis


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Benning - Minnesota Preliminary Planning Diagrams


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Planning Analysis Node 1: Minnesota Avenue

General Observaons about Exisng Area:

1) A concentraon of retail exists near the

intersecon of Minnesota Avenue and Benning

Road; however, poorly maintained storefronts

and lack of visibility for anchor tenants areimpeding the success of retail in this node.

2) The major intersecon of Benning Road and

Minnesota Avenue has poor retail visibility and

inconvenient pedestrian connecons; these

problems are exacerbated by Benning Roads

steep grade change near where it is elevated

above the railroad tracks.

3) Currently, there are weak transions from

commercial zones to low-scale residenalneighborhoods.

Retail Planning Principles:

1) Focus on developing mixed-use buildings

where large site depths allow for opmal building

and parking footprints.

2) Cluster retail together to provide a more

consolidated shopping experience.

3) Create a more dened hierarchy of

intersecons, starng with the intersecon of

Minnesota Avenue and Benning Road as the

communitys focal intersecon.

4) Scale down building height and density as new

development approaches low-scale residenal

neighborhoods.

= Major Intersecon


= Node 1

= Minor Intersecon


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Planning Concepts Node 1: Minnesota Avenue

The following concept diagram is intended to be used as a general guide for retail improvement opportunies.

Actual building conguraons and mix of uses should be reviewed on a parcel-by-parcel basis.

HIGH-DENSITY, MIXED-USE AND MULTI-USE DEVELOPMENT

OPPORTUNITIES

The intersecon of Minnesota Avenue and Benning Road serves as

the prime corner to the neighborhoods retail experience. Engaging

all four corners of this intersecon with the built environment is

vital to creang an animated sense of place.

Deeper site depths along Minnesota Avenue allow for a higher

density mixed-use and mul-use program. A strong inial

oering in these areas is crucial, as it will drive the success and

direcon for the rest of the Minnesota Avenue. In these areas,

structured parking can be considered; however, this market is

primarily suburban and a parking strategy should therefore serve

consumers who drive. As the program moves closer to residenal

streets (especially east of Minnesota Avenue), the density should

decrease to a scale more appropriate to low-rise residenal

homes.

= Prime Corner

= Major Intersecon


= Minor Intersecon

= Mixed-Use Opportunity

= Single-Use Opportunity

= Mul-Use

= Consolidaon Opportunity

Redevelopment Opon 1


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Planning Concepts Node 1: Minnesota Avenue



REINVESTMENT/REPOSITIONING OPPORTUNITIES

Consolidang exisng properes will alleviate concerns about

the lack of control and consensus among mulple landowners.

Merging properes will also increase site dimensions and provide

more desirable leasing depths.

SINGLE-USE/TRANSITIONAL OPPORTUNITIES

Transional programming should reect the same character as

the denser mixed-use environment. However, it should be at a

smaller scale so as not to compete with quiet residenal streets.

Implemenng streetscape and storefront design guidelines will

ensure that the submarket maintains the goals of a successful

Main Street throughout its many years of growth.

= Prime Corner

= Major Intersecon


= Minor Intersecon

= Mixed-Use Opportunity


= Mul-Use Opportunity




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Planning Analysis Node 2: Benning Rd and E. Capitol St

General Observaons about Exisng Area:

1) The East Capitol Street and Benning

Road intersecon presents dicules for

pedestrian movement due to its expansive

width and heavy vehicular trac.

2) The Benning Road Metro Staon should

be an amenity to the neighborhood. As

it currently stands, however, the Metro is

disjointed from the street.

3) Due to shallow property depths and

mulple ownerships, the retail character in

this node is composed of small format inline

and pad retailers.

4) This node is more residenal and smaller

in scale compared to the Minnesota Avenue

node.

Retail Planning Principles:

1) Restore a sidewalk pedestrian experience

with buildings that embrace the streets

edge.

2) Create a retail merchandising strategy that

beer serves the needs of the surrounding

community.

3) Connect the Metro back with the

streetscape.

= Major Intersecon


= Minor Intersecon

= Node 2


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Planning Concepts Node 2: Benning Rd and E. Capitol St




= Prime Corner

= Major Intersecon


= Minor Intersecon



REINVESTMENT/REPOSITIONING OPPORTUNITIES

Larger leasing depths provide an opportunity to lease to anchor

tenants that will draw more consumers to this retail node.

Consolidang exisng properes can assist in increasing the

density of a site as future phases develop.

Signage and landscaping strategies that draw on the Main Streetconcept will e the Metro and surrounding open space back to

the community.

Clear signage and aracve landscaping is needed to help knit

together the fragmented retail oerings framing the intersecon

of East Capitol Street and Benning Road.

SINGLE-USE/TRANSITIONAL OPPORTUNITIES

Neighborhood-serving retail within single-use/transional zones

help link larger retail desnaons. Implemenng a Main Streettype of program can transform a typical suburban shopping strip

into an integrated retail experience that serves as a community

desnaon.


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Benning Road - Minnesota Avenue Retail Demand Analysis


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Submarket and Trade Area Boundaries

The Retail submarket has two separate nodes:1) Along Minnesota Ave. rom Grant St. NE to E Capitol St. and Benning Rd. to Dix St. NE;2) Benning Rd. rom Blaine St. to A St. SE and along East Capitol St. rom Texas Ave. to 46th St., SE

Trade Areas

Tradeareasassessresidentsand

other potential customers that could be

drawn to the site

Theprimarytradeareaencompasses

the block groups within a mile o the

retail submarket; the secondary tradearea includes the block groups within a

mile o the retail submarket (reason-

able walking distances or pedestrian

shopping)

Primarytradearearesidentsare

expected to be requent customers,

with a ocus on those living closest to

the site; secondary trade area residents

are expected to be consistent, but notrequent customers

Potential customers who are not pri-

mary or secondary trade area residents

are accounted or by an inow actor;

this is a percentage applied to potential

expenditures at the site


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Benning Road-Minnesota Avenue Trade Area Population

Moderateincreasesareprojectedin

population and housing units in the Ben-

ning Road-Minnesota Avenue NE trade

area over the next fve years

Newresidentialprojectsindevelop-

ment pipeline may add 1,861house-

holds or approximately 5,841 new

residents (based on average household

size in each trade area). This addition is

accounted or in the 2012 estimates or

population and households

Totalpopulationinthetradeareais

projectedtoincreasefrom27,537in

2007to33,378in2012;anaveragean-

nualgrowthrateof3.9percent

MajornewprojectsincludeLotus

Square, Parkside, and Woodson

Heights

Source:ESRIBusinessAnalyst;ERA2007



TradeAreaPopulationGrowth,2007and2012

TradeAreaHouseholdGrowth,2007and2012


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Benning Road-Minnesota Avenue Trade Area Households Income & Ethnicity

Medianhouseholdincomeintheprimarytradeareais$37,041;

$28,868inthesecondarytradearea.Thisdierenceisalsofoundbetween the two areas in median amily income and median net

worth

Thelargerdierencebetweentheprimaryandsecondarytrade

areasinmediannetworth($68,462v.$34,362)maybeafunction

o home ownership

Theprimarytradeareahouseholdscouldbecategorizedas

middle and lower-middle income; the secondary trade area in-

cludes more moderate income households

Raciallyandethnically,thetradeareaismajorityAfrican-Ameri-

can(98%)*

*LatinoandHispanichouseholdsmayidentifyasblack,white,orotherincensus

data. Typically, Other includes mixed racial populations or sel-identifed as

such.ThegroupmayincludeLatinosorHispanicswhodonotidentifywith

anotherrace.LatinoandHispanicareethnicgroups,notracial,butmayinclude

people o several racial groups


IncomeStatistics,2007

RacialandEthnicGroups,2007


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Trade Area Population Age Cohorts

Agecohorts35through44willseeadeclineinpopulationover

the next fve years, a negative indicator or residential demand

Growthinthe55to64cohortwillincreasedemandforgoods

and services associated w/ Empty Nesters and those heading

towards retirement

Strongpopulationgrowthamongthe15to19and20to24age

cohorts indicates continued demand or amily-oriented goods and

services and young adult household ormation-oriented items such

as inexpensive urniture, quick service restaurants, bars, and pre-

prepared oods at supermarkets


AreaPopulationbyAge,2007and2012


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Benning Road-Minnesota Avenue NE Trade Area Household Profle

Ahigherpercentageofhouseholdsrenttheirhomes

(67%)thanown(33%)inthetotaltradearea.The

planned introduction o newer or-sale residential units

inthedevelopmentpipelinewillbegintoadjustthisratio

over time

Reviewingthetradeareashouseholdexpenditures

provides a snapshot o how households spend their

disposable dollars. In order to increase opportunities or

retail sales in the community, the retail submarket needs

to be able to capture more o the total expenditures

available

In2007tradearearesidentsspentatotalof$116mil-

lion on products and services in the categories repre-

sented on the graph. This is total spending everywhere,

notjustinthetradearea

Groceryrepresentsthehighestexpenditurescategory

in the trade area. Increasing the number o available ood

and drink establishments in the retail submarket may

oeranopportunitytoincreasemarketshareoftotal

available expenditures


HomeOwnership,2007

HouseholdExpenditures(InMillions)byCategory,2007


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DevelopmentPipelineofUnderConstructionandPlannedProjects

PipelineProjects

Plannedprojectsincludeatotalof:

1,861Residentialunits

44,480squarefeetofretailspace

712,553squarefeetofocespace

Inthefollowingprojects:

LotusSquare

285residentialrentalunits

ParksideMixed-UseDevelopment

500,000squarefeetocespace

1,500residentialunits(20%

aordable)

30,000squarefeetretailspace

MinnesotaBenningGovernmentCenter 14,480squarefeetofretailspace

212,553squarefeetofocespace

WoodsonHeights

76newresidentialunits



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Overview o Retail Market Demand Analysis

The purpose o the market analysis is to provide quantitative data that, combined with qualitative analysis in the Strengths-Weaknesses-Opportunities-

Threats (SWOT) section, inorm the retail development strategy or the submarket and provide a tool to DC government, private developers and retailers,

and community organizations or developing retail business opportunities.

Developing Estimates o Supportable Square Footage

A key component o the quantitative analysis is determining how much retail space is supportable in each submarket. To calculate this, retail demand or

spending within the trade area along with an estimate o the spending that the submarket could capture are measured. Various actors are taken into ac-

countindevelopingsubmarketcapturerates,suchasthequalityofexistingretailoeringsandtradeareacompetition.Retailspendingpotentialforeach

majorretailcategory(ConvenienceRetail,SpecialtyRetailandFood&Beverage/RestaurantsotherFoodService)isdividedbytheretailindustrystan-

dard or sales-per-square oot (sometimes called retail sales productivity) to arrive at an estimate o retail square ootage that the submarket can support.

Submarket demand is compared to supply by subtracting the existing retail inventory to determine the net supportable square eet or retail space.

Forpotentialfuturedevelopmentin2012,pipelineresidentialandcommercialprojects,andassociatedincreasesintradeareaexpenditures,arefactored

intofuturedemand.Onthesupplyside,thepipelineofunderconstructionandplannedretailprojectsissubtractedfromtheestimateofsupportable

retail space, as it is assumed that the new space will absorb an equivalent amount o space at the threshold productivity levels.

Generally speaking, retail market demand analysis should not be considered conclusive, as it combines typical and industry average perormance

measureswithprofessionaljudgmentbasedonlocalconditionsandknowledgeofthemarketandretailindustry.Thereareseveralfactorsthatwilldeter-

mine the success or ailure o any individual retail business; that is why the industry is constantly changing. This analysis is intended to guide the Retail

Action Strategy to opportunities to recruit potential successul retail categories based on estimated demand potential.

*Estimated retail spending potential is based on household spending patterns, household income and household composition as reported by the Consumer Expenditure Survey prepared

by the US Census or the US Bureau o labor Statistics. For retail sales productivity rates, ERA used a range o retail industry-based sales per square oot estimates based on the compa-

nysexperienceinurbancommercialdistrictssimilartoeachindividualsubmarket,asshoppingcenterindustrystandardsdonotalwaysreectcomparableperformanceineithermarket

orientation or fnancial structure by locally-owned businesses or by smaller/older commercial buildings.


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Retail Demand: Primary Trade Area Supportable Retail Space

Retailersmeasurebusinesssuccessbycomparingtheirsalespersquarefootorproductivityagainsttheircostsandrevenueobjectivesaswellasreport-

edretailindustrystandardsforcomparabletypesofstores.Theamountretailerscanaordtospendforrentisalsodeterminedbyannualsales(boththe

total amount and sales per square oot per year). Retail rents usually range between 8 percent and 12 percent o total annual sales. This industry stan-

dard is a benchmark by which retail perormance can be determined.

Localretailerswhosesalesfallbelowtheseindustrystandardsmaybeconsideredtobeunderperforming;thereasonsforunderperformancemaybe

a result o the size o the market, stronger competitors with better merchandise, merchandising, and/or better pricing, or undercapitalization. Under-

perorming retailers may cause the analysis o supportable square ootage to be underestimated. The higher perorming operators can capture market

share rom existing retailers as well as new customers not currently patronizing a commercial district. When considering a commercial location or district

such as the submarkets included in this analysis, retailers oten review the levels o rent achieved by property owners as an indication o the level o sales

that other retailers are generating.

Loweraveragerentlevelsalsoinuencetheamountthatpropertyownerscanaordtoinvestinpropertyimprovementstoretainexistingtenantsor

recruitnewones.Ifpropertyownersareunabletooertenantimprovementsbecauserentsaretoolow,theretailersarethenrequiredtoincreasethe

amount they must spend to prepare a building to become a store, ca, or consumer service business. The greater the amount the retailer is required to

invest in space improvements, the greater the fnancial risk, resulting in additional fnancial pressures during the early years while the retailer is becoming

establishedandbuildingacustomerbase.Districtspresentingahigherriskoffailurehavedicultyattractingwellmanaged,wellcapitalizedbusinesses.

Thisrelationshipestablishestheconnectionbetweenthetotalsalesthatretailerscanachieve,theamounttheycanaordtopayinrent,andwhetherthe

propertyownerswillbewilling(orable)toinvestinmajorneededbuildingupgrades(electricalsystems,HVAC,tenantimprovements)toattractorretain

retail tenants.


24/39

Trade Area Resident Spending

Retailopportunitiesaremeasuredusingtradearearetail

expenditures, which describe consumer spending patterns

Expenditurestypicallycoverresidentspending,buthave

beenadjustedtoincludeworker,visitor,andotherspend-

ing, as appropriate

Keycategoriesinclude:

ApparelandApparelServices

EntertainmentandRecreation

PersonalCare

HouseholdFurnishingandEquipment

Grocery

FoodandDrinkAwayfromHome

EntertainmentandRecreationincludesexpenditures

such as ees and admissions, TV/video/sound equipment,

pets, toys, recreational vehicles, sports equipment, photo

accessories, and reading

PersonalCareincludesstoressuchas,drugstores(ex-

cluding prescription drugs) cosmetic stores, and services

(nail salons, hair salons, shoe repair, etc.)

Grocery(foodanddrinkforconsumptionathome)

absorbs the most expenditures or the households in the

trade area


TradeAreaExpendituresByCategory(InMillions),2007

$116MillionTotal


25/39

Capture rates

A capture rate is calculated as a percentage o sales

expected rom households or inow shoppers in the entire

trade area.

Therateisdevelopedbyexaminingthetradeareasex-

istingretailoerings,qualityofretailers,thepotentialfor

increased sales with improved retail operations, size o the

tradeareaandaprofessionaljudgmentconsideringnearby

competition and other available retail purchasing opportuni-

ties or customers.

The analysis utilizes capture rates specifc to the trade area

to calculate likely on-site spending within the retail submar-

ket. For example:

A10%capturerate=$10ofevery$100spentwilloccur

in the retail submarket

Notethat100%capturerateisnotpossible,astherate

reects all retail purchasing opportunities available to the

shoppers in the trade area

Thecapturerateisgenerallyamajordeterminateofa

retailsubmarketsviability


Benning-Minnesota Submarket Capture Rates By Category


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Estimated Captured Spending within the Retail Market

CapturedspendingintheBenningRoad-MinnesotaAv-

enuetradeareawasestimatedtobe$19.8millionin2007

comparedtototaltradeareaspendingof$116millionin

the same year

CapturedspendingintheBenningRoad-Minnesota

Avenuetradeareaisexpectedtobe$22.8millionin2012

comparedtototaltradeareaspendingof$140millionin

the same year

ERAestimatesby2012thatGroceryspendingwillac-

countformorethan$12.2millionannuallyandFoodand

Drink(awayfromhome)willaccountformorethan$4.4

million annually

Capturedspendingintheretailtradeareaisexpectedto

increasebyalmost$3millionbetween2007and2012,due

mostly to changes in population and income levels


EstimatedCapturedRetailTradeAreaSpending,2007

Estimated Captured Retail Trade Area Spending, 2012

$19.9Million

$22.8Million


27/39

Productivity and Typical Store Size

Acalculationofstoreproductivityistypicallybasedon

optimal perormance o quality retailers, not actual opera-

tors

Howeverthelowerqualityoftheretailspaceavailablein

this retail submarket requires that a lower than optimal

productivityratemustbeusedtoadjustthesupportable

square ootage calculation

Thesquarefootageofretailtypedoesnotindicatenum-

ber o stores since stores sizes vary

Typical stores sizes might be:

Apparel3,500SF

Accessories2,00010,000SF

PersonalCare2,00010,000SF

HouseholdFurnishings3,50010,000SF

GroceryStores-30,000to65,000

Restaurants3,0006,000+SF

QuickServicefood1,2003,500SF

Theretailsubmarketoeringscouldbeanchoredbya

supermarket, a collection o restaurants, and neighbor-

hood-ocused goods and services

Thebestwaytoestimateasitesproductivityistoassessannuals

salespersquarefootforcomparableprojects

Thetypeofretailoftenimpactsthesalespersquarefoot(i.e.jewelry

versus urniture)

While the productivity rates used or this submarket were based onnational averages as reported by the International Council o Shopping

Centers (ICSC), ERA used the lower national rates to reect space limi-

tations and likely perormance in the submarket. The rate still reects the

minimum productivity that would be needed or a quality retail operation

return on investment.


Benning-Minnesota Submarket Comparable Productivity


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2007NetSupportableSquareFeet

Basedonthecurrentandprojectedlevelofhouseholdsspendingin

the market area, the Benning Road-Minnesota Avenue NE submarket

cansupportbetween52,100and69,300squarefeetofretailin2007

Theexistingretailinventorytotals450,026squarefeetwithintheretail

submarket. In order to take into account the lower quality space it was

discountedto283,516squarefeet(seedetailedexplanation)

Theretailsubmarkethasanegativenetsupportablesquarefootrange

between(231,416)and(214,216)in2007

Althoughadditionalresidentialunitsandemploymenthavebeenin-

cluded in the calculation, signifcant existing inventory creates a situation

o negative demand potential


EstimatedNetSupportableSquareFeet2007


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2012 Net Supportable Square Feet

Basedonestimatedtradeareaexpendituresandcapturerates,the

Benning Road-Minnesota Avenue NE submarket can support between

59,800and79,700squarefeetofretailin2012

Thereisapproximately44,480squarefeetofnewretailplannedfor

the trade area including retail at Parkside and the Minnesota Benning

Government Center

Theexistingretailsquarefootageandplannednewprojectsaresub-

tracted rom the subtotal to arrive at net supportable square ootage or

2012

Thereanegativenetsupportablesquarefootrangebetween(286,196)

and(248,296)by2012

Althoughadditionalresidentialunitsandemploymenthavebeenin-

cluded in the calculation, signifcant existing inventory creates a situation

o negative demand potential. Redevelopment, reconfguration and/or

selective reduction o existing inventory may help reduce the total nega-

tive net supportable square eet


Estimated Net Supportable Square Feet 2012


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What Does Negative Supportable Square Feet Mean?

Negativesupportablesquarefeetindicatesthat,atacertainpointintime,theremaybemoreretailspacethanthecurrentmarketexpenditure

potential can support

ManyexistingretailersinWashingtonDC

Operateinlowerpricedspacesthatcanbeconsideredfunctionallyinecient/obsolete(toosmall,tooshallow,inpoorcondition,etc.);or

Arenotwellcapitalizedtocompeteinanimprovedenvironment.ERAhasdiscountedthesquarefootageoftheseretailersinmany

areastoreectthequalitative/competitivedierencesinoperatingcapacity

Marketsevolveandshiftastheamountandtypeofavailableretailchanges;whattodaymayappeartobeoversupplycanattractnewspendersfrom

outsidetheimmediatetradeareaandbecomepositiveovertime(suchasAdams-MorganordowntownWashingtonneartheVerizonCenter).Anega-

tivesupportablesquarefootageestimatein2012doesnotmeananareaispermanentlyoversupplied

Retailsubmarketsmayhaveastoremiximbalanceandunfullledretailpotential.Theseareasmayhavetoomuchofonekindofretailandnot

enough o other types. An improved retail mix could increase demand and reduce the perceived oversupply o space.

Theretailsubdmarketstrategieswillincludeprogramsandincentivestoassistlocalretailersoperatingingrowth/expandingmarketswheresubstan-

tial new retail is being introduced


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Commentary on the Current Retail Inventory

According to CoStar Group Real Estate Inormation Services, there is

450,510 square eet o retail space in the Benning Road-Minnesota

Avenue retail submarket. To determine net supportable square eet, the

existing retail space is subtracted rom the gross supportable square

feet.Onemajordeterminantofopportunityreliesonthequalityofthe

existingspacehowcompetitiveisthespacerelativetotherestofthe

trade area and other competitive districts?

ArecentstudyofGreatStreetsneighborhoodretailfortheOceofthe

Deputy Mayor or Planning & Economic Development studied the quality

o the existing retail space in several commercial districts to determine

the easibility o a tax increment fnance ( TIF) district, including Benning

Road-Minnesota Avenue. While the study area did not coincide directly

with the trade area, the assessment o the relative quality o the existing

building stock suggests the general condition o the property inventory

in the area.

Thestudyconcludedthat37%oftheretailinventoryinthetradearea

was Grade C, or inadequate, or contemporary retailing needs. It also

statedthat30%ofspacewasclassiedasbuildtosuit(BTS),mean-

ing space constructed or a specifc purpose or tenant in such a manner

thatmakesconversiontoanotheruseortenantimpractical.Only9%

and24%wereratedClassAandB,respectively.Inordertocalculate

supportable square ootage, the existing space was discounted by

removing the Grade C inventory rom the equation.

Retail opportunities are limited in the retail submarket partially due to

poor quality o existing retail space, limited household incomes, and a

lower concentration o households.

Source:DCOceofDeputyMayorforPlanningandEconomicDevel-

opment


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Multiplefactorswillultimatelyaectthesupportablesquarefeetandsuccessoftheretailsub-marketsoeringsoverthelong-term

The success and appeal o a retail district is directly linked to its

merchandise mix and its unction as a destination.

Incorporating other uses and programs may limit retail space,

butcomplementoverallproject

The trade areas are capable o spending a certain amount. Imore$$arespentinonestoreless$$willbespentelsewhere

Astoressize,placementwithinthedistrict,interiorandstorefront

design are part o total appeal or customers

Price-points and merchandise should accurately reect the demo-

graphics and liestyle characteristics o the customers

Merchandise quality/price positioning/merchandising/mark-up

relative to cost o goods, as well as store size and other operating

factors,inuencearetailersprotability(Sales/SF)

FactorsAectingStoreSupportableSquareFeet,2007

FactorsAectingStoreProductivity

Well-formedMerchandise Mix

Higher Store Productivity

Incorporation of OtherUses

(231,416) (214,216) SF(225,716) SF

Stores Cater to MarketCharacteristics

Location, Design, &Configuration

Type of Store

Low Sales / SF High Sales / SF


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Detailed captured retail spending on site by category and market

2007PotentialCapturedSpendingonSite 2012 Potential Captured Spending on Site


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Benning Road - Minnesota Avenue Strategy


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Benning Road-Minnesota Avenue

Introduction

The area around Benning Road and Minnesota Avenue is experiencing redevelopment and has the potential to become a more robust and in-

tegratedsubmarket.ItisatransitionalcommunityandstrategicallylocatedontwoMetrolines(BlueandOrange),andwithmajorthoroughfares

runningthroughoraroundtheareaincludingEastCapitolStreet,MinnesotaandKenilworthAvenues,andBenningRoad.Theareaisproximate

toaDCgovernmentocebuilding(currentlyunderconstruction)andtheParksidedevelopment.Totalpopulationinthetradeareaisprojected

toincreasefrom27,537in2007to33,378in2012;anannualaveragegrowthrateof3.92%.

However,thesubmarketisfacingredevelopmentandretailgrowthchallenges.Theaveragehouseholdincomeinthetradeareaisjustunder$33,000,

indicating a low to moderate amount o trade area buying power. Income and median net worth is greater in the primary trade area than in the sec-

ondary because o a higher percentage o homeownership. The primary trade area contains stable neighborhoods, single amily homes and lower-

middle income amilies. The secondary market contains more single head o household amilies with children living in multi-amily rental apartments.

Highest household annual expenditures in both areas are or ood and drink away rom home.

The retail inventory in this submarket contains a substantial amount o lower quality space. According to the Retail Market Demand Analysis about37%ofthetotalexistingretailspaceisGradeC,orofdiminishedqualityandmaintenance.

The Benning Road-Minnesota Avenue submarket currently has signifcantly more retail than the consumer base can support, explaining the poor

quality o much o the existing retail. Signifcant new residential development is planned or the submarket over the next fve years, though not

nearly enough to absorb all the excess retail. The key to retail development in this submarket is to create a central location with a critical mass o qual-

ity retail that can serve both existing community needs and attract commuter/regional shoppers. Existing retailers capable o adapting their business

modelstothenewcentralshoppingdistrictshouldbesupportedintheireortstorelocatetothenewmixed-usedevelopmentpropertiesforim-

proved retail perormance.

Based on the SWOT Analysis, Retail Demand Analysis and Preliminary Planning Diagrams completed as part o this submarket analysis, themostecientapproachtomaximizingthevalue,mixandappropriatenessofretailinthissubmarketrequiresacknowledgingthefollowingbasic

assessments o the area and then taking the specifc actions listed below.

Merchandising Concepts

RedevelopmentoflargeparcelsattheintersectionofMinnesotaAvenueandBenningRoadoertheopportunitytoimprovetheoverallmerchan-

dising o the submarket by bringing retail tenanting decisions under control o ewer property owners. As a community shopping center, striving

to become a regional center, East River Park Shopping Center should recruit a mix o restaurants and large ormat retailers. To continue to serve

neighborhood needs, the best existing retailers rom throughout the submarket should be given the opportunity to re-locate to the new center.


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ThesuccessoftheBenningRoadDennysRestaurantsouthofEastCapitolStreethasdemonstratedthepotentialforotherrestaurantstocre-

ate a small cluster around the Benning Road Metro. This would be a positive enhancement o what is otherwise primarily neighborhood-serving

retail.

Thepositioningstrategiesforthetwonodesshoulddier,basedonthescaleoftheopportunitytorepositioneachsub-area,aswellasthecom-

petitive position o each. The opportunity to reposition the small commercial cluster at the Benning Road Metro station is constrained by both

the limited site capacity (shallower store depths and less land area) and more limited space to create a greater critical mass o retail and services.

Node 1- Minnesota Avenue: The concept or this node is to create a new destination shopping center that will serve North East DC and

adjacentPrinceGeorgesCountyneighborhoods.Thisnodehassucientparcelsizeanddepthstocarrylarge-formatandmid-formatretail.

Large-formatcategorydominanttenantssuchasPetcoorPetsMart(rangingfrom8,000to12,000squarefeet),and/ormid-formatprice-point-

sensitivefashionsuchasMarshallsorT.J.Maxx(15,000to25,000squarefeet)shouldanchorthisnodeforapparel,accessoriesandgifts.The

price point o these stores is appropriate or the income level and rental/ownership mix o the primary and secondary trade areas; there is little

retail in the two nodes today that would compete with these concepts. Additional tenants might include a well-known ftness center such as

GoldsGym,WashingtonSportsCluborResultsGym(typicalsizesrangefrom3,000to5,000squarefeetofspaceforcommercialgymfacilities);

a Curves gym uses less space, as little as 2,500 square eet. Additional space should be planned or quick-service and table-service restaurants

andacafe/bakerytoappealtobothresidentsandcommuters(suchasDunkinDonutsorJavaHut)andabroadrangeofneighborhoodgoodsand services such as a bank, dry cleaners, hair care or other service uses (see next paragraph). The number o rental units in the area may also

suggestadditionofanewLaundromatlocatednearfoodandbeverageandservicebusinesses.Additionoflargerformatstoresandrenovation/

re-tenanting o the existing (but underperorming) retail center properties at the intersection o Minnesota Avenue and Benning Road would ad-

dressbothresidentneedsaswellascapturingagreatershareofcommuterexpenditures,whichtodaymaybegoingtoPrinceGeorgesCounty.

Node 2- Benning Road Metro Cluster: The retail positioning strategy or this node should ocus on a selected range o convenience and

neighborhoodservingretailuses.Quick-servicerestaurantssuchasCluckU;abankwithATMaccess;independentorsmallchaincoeeshop

(suchasMayorgaCoeeorDunkinDonutsatabout850to1,200squarefeet);adrugstoresuchasCVS(approximately6,000to8,000square

eet) and a dry cleaners with tailoring to provide services to Metro passengers (at about 1,000 to 1,500 square eet) would serve both resident

and commuter spending needs, and would ft into the existing retail buildings and site capacities than larger tenants.

Urban Design Improvements

The East River Park Shopping Center and other developments along Minnesota Avenue south o Benning Road should be oriented to ace Min-

nesotaAvenuetoprovideaninvitingandvisiblefacetoallthepedestrianandautomobiletrac.Thiswouldalsotakeadvantageofthewide

sidewalks along this corridor to truly animate the area as a shopping location. Streetscape guidelines should be implemented to promote a

soter, pedestrian environment along Minnesota Avenue. At the southern end o the Minnesota Avenue node, the Discount Mart lot should be

redeveloped to better establish the corner o Minnesota Avenue and East Capitol Street.


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In the Benning Road node, the area is ar more residential with limited potential or retail expansion. Streetscaping should seek to improve the

pedestrian experience with planting, street urniture and other means o sotening the landscape while providing improved automobile access

to Benco Shopping Center and the restaurants surrounding the Benning Road Metro station. In both nodes, connections to the Metro station

should be improved to provide saer access or pedestrians.

Transportation Improvements

Several transportation inrastructure issues have already been raised as part o the Great Streets Initiative analysis o Benning Road. Benning

Road, with its raised approach to Minnesota Avenue rom the west, creates both a north-south barrier and a challenging pedestrian experience

even moving east-west across Minnesota. I the approach itsel can not be improved, the addition o a proposed streetcar line and better Metro

connection would still be signifcant steps.

Site & Market Capacity or Improvement

ThesubmarketiscomprisedoftwonodesalongMinnesotaAvenueandalongBenningRoadthathaveverydierentpotentialfordevelop-

ment based on their existing lot sizes and the retail ootprints they could support.

Minnesota Avenue, particularly surrounding the intersection with Benning Road, is home to large parcels that are, or could eventually be con-

trolled by single owners. In particular, the East River Park Shopping Center is a prime redevelopment opportunity. Its proposed redevelopment

as a mixed-use residential/retail center should be supported. The other corners o the Minnesota-Benning intersection could eventually be

assembledanddevelopedtocreateatrueregionalshoppingdrawthatwouldcapitalizeonthecommutertracandeachstageofnewresiden-

tialandocedevelopmentinthearea.EastRiverParkShoppingCenterisapriority;however,asitisnotencumberedbytheautomobileand

pedestrianchallengesposedbytheraisedBenningRoadasitapproachesMinnesotafromthewest.Qualitystorefrontdesign,signageand

wayfnding can modiy but not eliminate the challenge o the raised road.

Retail Support

TheDistrictthroughtheDepartmentforSmallandLocalBusinessDevelopmentorthereStoreDCprogram,shouldprovidetechnicalassis-

tance to existing retailers in the submarket to reposition their businesses to capitalize on market changes and to better serve the existing market.

Specifc assistance should be ocused on identiying retailers capable o competing and succeeding in newly redeveloped mixed-use centers,

with a program similar to that used in Columbia Heights to identiy local retailers or inclusion in new developments.Supportable Square Footage and Evolving Markets

The Benning Road/Minnesota Avenue NE study area is characterized by conditions that exist in many o the underserved areas o Washington

DC. There is a market or retail goods and services, but there is also a large concentration o existing retail space that is substandard, in need

o substantial reinvestment and a limited amount o incremental new market support. Approximately 44,500 square eet o new retail space is

proposedintheParksidemixed-usedevelopment(30,000squarefeet)andabout14,500squarefeetofretailspaceintheMinnesota-Benning

BenningRoadMinnesotaAvenue


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GovernmentCenter.Whenthesepipelineprojectsaretakenintoaccountalongwiththelargeamountofspaceinneedofsubstantialreinvest-

ment and improvement to be considered competitive, the Benning Road/Minnesota Avenue NE nodes will include more retail space than is

supportable under existing and near-term market conditions. This estimate, sometimes indicated by so-called negative supportable square

footage,shouldnotbeviewedasapermanentcondition,andwillbeaectedbybothnear-termimprovementsaswellaslonger-term(beyond

theve-yearstudyperiod)growththroughprojectssuchastheprojectsdescribedinthemarketanalysistheyareprimarilyresidential,and

would add approximately 4,400 new residents to the study area. Available expenditures and the rate at which retail businesses in both the Min-nesota Avenue node and the smaller Benning Road Metro station node can capture a share o those expenditures will depend on both potential

increases in median household income levels over time as well as by the quality and quantity o retail uses that are either retained or recruited to

the area.

To put into perspective the incremental resident demand needed within the primary and secondary trade areas to balance the planned under-

supported/negativespace,twoprimaryfactorswereconsidered.Usingadisposableincomeestimatebasedonpresentandprojectedmedian

household income levels or the primary and secondary trade areas and reasonable capture rates, expenditures rom approximately 55,500 addi-

tional households would be required to place retail supply and demand in balance, ar more than the 2,122 units currently proposed. The larger

conclusion which might be drawn is that there could be too much underutilized and underperorming retail space in this zone and the develop-

ment momentum will not be present in the near term to support all o it. It should also be noted that market balance is not solely dependent onresidentconsumers,althoughthatisthebenchmarkmeasurementused.Additionofover700,000squarefeetofocespacewouldalsoadd

incremental retail support or the same convenience, consumer service and ood service that would attract residents.

Based on capturing a reasonable percentage o household income spent on retail/dining/consumer services and an assumed rate o capture

reectingagood,typicalmixofavailableoerings,eachnewresidentinacommercialareasupportsbetweenfourandsevensquarefeetofretail

space. Each new employee will support between two and fve square eet o space. Because this study area does not contain destination visitor

attractions,thevisitormarketisnotexpectedtobeamajorfactorinsupportingretailineithernode.Inareasthatincludevisitorattractions,each

visitortypicallysupportsbetweenone-halfandoneandone-halfsquarefeetofretail,farlessthaneithertheresidentoroceworkermarketseg-

ments.Inallcases,therangeofsupportablesquarefootageisbasedonavailableretailoerings,thequalityofthepublicspacesandcontinuity

o retail within the corridor, and relative proximity to where people live and work.

KeyRecommendations

1. Treat the Minnesota-Benning submarket as two distinct retail nodes, with intensive, higher-density development o large ormat retail in the

Minnesota Avenue node and support or an improved mix o smaller-scale, neighborhood serving retail in the Benning Road node to serve local

needs around the Benning Road Metro station.

2.IntheMinnesotaAvenuenode,urbandesignanddevelopmenteortsshouldtargetthefollowing.


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a. Redevelopment o retail centers should orient stores to ace Minnesota Avenue

b. Streetscape guidelines should be implemented to promote a pedestrian environment along Minnesota Avenue.

c.TheDiscountMartLotshouldberedevelopedtobetterestablishthecornerofMinnesotaAvenueandEastCapitalStreet.

3.IntheBenningRoadnode,urbandesignanddevelopmenteortsshouldtargetthefollowing.

a.Makestreetscapingimprovementsvialightingandtraccalmingtoimprovethepedestrianexperiencewhileprovidingimprovedauto

mobile access to Benco Shopping Center and the restaurants surrounding the Benning Road Metro station.

4. Transportation Improvements should include the ollowing.

a. Improving street-level connections to Benning Road west o Minnesota Avenue

b. Implementing plans or a proposed streetcar line along Benning Road.

c. Improving pedestrian connections to Metro stations.

5.Supportexistingretailersbyprovidingtechnicalassistancerelatedtoadaptingtotheirevolvingmarketandtheareaschanging

demographics, including:

a. Revising their merchandise mix

b.EstablishingaprogramtoidentifyandassistlocalretailersinsecuringstorelocationsaspartofanymajorredevelopmentofEastRiver

Park Shopping Center.

benning minnesota study

Documents