SUBJECT: REVIEW OF REQUEST FOR QUALIFICATIONS STATEMENT AND PROPOSAL (RFQ/RFP) TO PREPARE A DOWNTOWN MARKET STUDY

 

Recommendation:

That the City Council:

1. Select the firm of ERA to prepare the downtown market study.
2. Approve the Scope of Work in the attached proposal.
3. Appropriate $40,000 from the Downtown Enhancement Fund and authorize the City Manager to execute a contract with the selected firm.

 

Background:

On November 14, 2000 the City Council adopted a moratorium ordinance on the conversion of existing retail space to restaurant use with the intent of studying the potential uses which may locate in the downtown and to develop any regulatory measures or incentives that may be required to encourage retail development. The ordinance will remain in effect for 90 days.

On November 20, 2000 staff issued the attached RFQ/RFP to twenty firms. The goal of the market analysis is to:

• Define the downtown’s retail potential by analyzing market and land use conditions.
• Establish implementation programs to guide development or redevelopment which encourages retail activity.
• Establish guidelines or regulatory measures for attracting and retaining retail business.

The firms of Economics Research Associates (ERA), Downtown Main Street Visions (DMSV) and Sedway Group responded with proposals.

 

Analysis:

Economics Research Associates (ERA)

ERA is a national real estate and financial consulting firm with special expertise in revitalization and redevelopment. The firm has conducted similar marketing studies for the Cities of Mission Viejo, Sacramento, Agoura Hills and Camarillo and evaluated market potential for retail centers related to transportation corridors in Los Angeles and Orange County. The firm has also prepared marketing analyses for numerous retail centers and large redevelopment projects.

ERA is proposing to analyze the market area, through land use inventory, merchant, property owner shopper and tourist surveys and local and regional growth forecasts to determine the City’s potential to attract new downtown office and retail businesses.

ERA is also proposing to extrapolate from successful retail outreach programs used in Old Town Pasadena, Pine Street in Long Beach and the Santa Monica Promenade to develop retail strategies, incentives and regulatory measures.

The firm’s Senior Vice President, David Wilcox and Principal, Diane O’Brian will be involved in the project and an Associate will be involved in data collection. The project is expected to require ten weeks to complete and cost $40,000.

Downtown Main Street Visions (DMSV)

DMSV is a planning, economic development and revitalization firm which has prepared revitalization strategies for a number of municipal and private clients. The firm is proposing to work with Land Use Economics to prepare the market analysis. DMSV has prepared economic development strategies for the Cities of Brea, Santa Monica, Encinitas, Santa Paula, San Luis Obispo and Los Angeles which are relevant to the City’s RFP. Land Use Economics which is collaborating with DMSV has prepared market analyses for the Cities of San Luis Obispo, Perris and Truckee and marketing analysis for several retail centers.

DMSV is proposing to identify the specific market which complements existing desirable businesses as a strategy for attracting new retail businesses. Specific sites will be identified for retail uses and a business retention program will be prepared. The DMSV Principal, Ronald Cano and Dennis Wambem of Land Use Economics will be involved in the project which is anticipated to require 12 – 16 weeks and cost $19,500.

The Sedway Group

Sedway Group is a national real estate consulting firm providing services to municipalities and the private sector. Among the municipal clients listed as relevant to the City’s project are the Cities of Lake Forest, San Bruno, Oakdale, La Quinta, San Jose, Cupertino, Redwood City, Downey, El Monte, Inglewood, Forest City and Santa Rosa. A number of private sector clients involved in shopping center developments are also listed as relevant to the RFP.

Sedway Group is proposing to identify the downtown’s retail market potential by conducting a general overview of area land use, evaluating existing small business conditions through interviews with real estate brokers, conducting interviews through shopper intercept and merchant surveys utilizing the firm of Opinion Research to conduct the survey work and prepare a retail and office absorption analysis to identify annual demand for office and retail land uses. Implementation strategies will be prepared drawing on the experience of other successfully revitalized communities. The firm’s Senior Managing Director, Thomas Jirovsky, Managing Director, Carol Fredholm, Principal, Amy Herman will be involved from the firm. The project is expected to take eight to nine weeks to complete at a cost ranging from $57,500 to $69,500 depending upon the level of service involved in the shopper and merchant intercept survey. The survey work is budeted at $20,000 to $32,000 with a survey of between 300 to 600 shoppers at five locations for seven days.

The City’s scope of work called for:

1. An inventory and expected rate of absorption of downtown office and retail business by size, type and use over the next ten years.
2. A shopper intercept survey and merchant survey to assess existing retail strengths, development constraints and opportunities for business expansions.
3. A market analysis and summary of survey findings of downtown market conditions and recommendations for attracting and retaining retail businesses.
4. Report of implementation strategies and presentation to City Council.

ERA is proposing to create a shopper data base through survey of 400 shoppers, whereas, DMSV has not specified the number to survey and Sedway Group proposes to contract this work to Opinion Research to survey between 300 to 600 shoppers and merchants. ERA and Sedway Group have specified an office market analysis to provide the required office absorption forecast, however, DMSV has not. ERA has specified a detailed business inventory to provide a profile of business types, services, office and visitor accommodations as does the DMSV proposal, however, the Sedway Group proposal indicates that a general analysis of land use conditions and a business license survey will be the basis to prepare the business profile for use in the market analysis. This task would require that the City provide mailing labels with business owner names, addresses and telephone numbers.

The Sedway Group has the most costly proposal at $57,500 to $69,500. The ERA cost is $40,000 which is $20,500 higher than the proposal of DMSV. Some of the variation in cost between the ERA and DMSV may be due to a reduced work scope in DMSV’s proposal (no office market analysis relative to office market forecast, and no specification on shoppers surveyed.) The cost difference in the two proposals for these items may be $14,000. ¹ The ERA and Sedway proposals provides greater detail outlining the work involved in each task of the project and staff rated their proposals as stronger. The three proposals are similar in inventory and analysis work , but for the shopper survey and office market analysis items noted above ,and the firms all have similar levels of experience in dealing with municipal market studies and retail retention and attraction strategies.

Agendas / Minutes Menu           Agenda