HomeMy WebLinkAboutStaff Report 4.B 04/06/20094.13
CITY OF PGTALU6fA, CALIFORNIA April b, 2009
AGENDA BILL
Agenda Title: Public Hearing and Discussion of East Washington Place Meeting Date: April 6, 2009
Fiscal and Economic Impact Assessment Pursuant to City Council
Resolution No 2008-189 N.C.S., "Establishing a Policy and Procedure for
the Preparation. Review and Use of Fiscal and Economic hnpact Meeting Time: N 7:00 PM
Assessments for Specified Development Projects in the City of Petaluma",
adopted October 6, 2008.
Category: ❑ Presentation ❑ Consent Calendar N Public Hearing ❑ Unfinished Business ❑ New Business
Department:
Community
Development
Cost of Proposal: N/A
Amount Budgeted: NIA
Director: I Contact Person: Phone Number:
Michael Moore I Betsi Lewitter 707-778-4301
Name of Fund: N/A
Account Number: NIA
Recommendation: It is recommended that the City Council take the following action: Hold the required
public hearing, take public comment on and discuss the contents of the Fiscal and Economic Impact Assessment
(FETA) for the proposed East Washington Place Mixed Use Development in accordance with the provisions of
City's adopted FEIA policy (Resolution 2008-189 N.C.S.: attached)
Summary Statement:
On October 6, 2008, the Council adopted Resolution No. 2008-189 N.C.S. which required preparation of a Fiscal
and Economic Impact Assessment f'or projects involving general retail, grocery, hotel or building and landscape
materials that standing alone, or in combination with any other uses, has a total floor area of 25,000 square feet or
more. The Resolution required that the City Council hold a public hearing to consider and discuss the FEIA prior
to the granting of any Iand use entitlements. The purpose of the hearing is to have a public discussion with the
City Council, applicants and the public; it is not intended to require or result in separate findings, conclusions or
approvals regarding the project. The information in the FEIA can be used by the applicable City decision-making
bodies during the subsequent entitlement process for the project. The FEIA was prepared under the City's
direction by Bay Area Economics (BAE). A representative from BAE will be at the meeting to present the overall
conclusions ofthe FEIA and respond to any questions.
Attachments to Agenda Packet Item:
A. Resolution No. 2008-189 N.C.S. Establishing a Policy and Procedure for the Preparation, Review and Use
of "Fiscal and Economic Impact Assessments" for Specified Development Projects in the City of
Petaluma.
B. East Washington Place FEIA.
Reviewed by Admin. Svcs. Dir: Reviewed by City Attornev: Approved by City Manager:
(.Da e:
i` , = I --C - ��� %7 Date: Date:
Rev. # Date Last Revised: 3131/09, 12:15 PM File: S:1PlanninglCity Council ReportslEast Washington PEace
I I `FEIA staff rpt 4-6-09
CITY OF PETALUMA, CALIFORNIA
April 6, 2009
AGENDA REPORT
FOR
PUBLIC HEARING AND DISCUSSION OF EAST WASHINGTON PLACE FISCAL AND
ECONOMIC IMPACT ASSESSMENT PURSUANT TO CITY COUNCIL RESOLUTION NO 2008-189
N.C.S., "ESTABLISHING A POLICY AND PROCEDURE FOR THE PREPARATION, REVIEW AND
USE OF FISCAL AND ECONOMIC IMPACT ASSESSMENTS FOR SPECIFIED DEVELOPMENT
PROJECTS IN THE CITY OF PETALUMA", ADOPTED OCTOBER 6, 2008.
1. RECOMMENDATION:
Hold the required public hearing, take public comment on and discuss the contents of the Fiscal and
Economic Impact Assessment (FEIA) for the proposed East Washington Place Mixed Use
Development in accordance with the provisions of City's adopted FEIA policy (Resolution 2008-189
N.C.S.; attached).
2. BACKGROUND:
General Plan 2025 Goal 9-G-1 is to "establish a diverse and sustainable local economy that meets
the needs of the community's residents and employers". In order to ensure that new commercial
development will have a net positive impact on the community, Program "A" of General Plan Policy
9-P-2 recommended that the City consider the need for a "fiscal/economic impact analysis as a
component of the project's entitlement process".
Following a series of public discussions that began back in 2007, the City Council adopted
Resolution No. 2008-189 N.C.S. in October of 2008, which required the preparation of "Fiscal and
Economic Impact Assessments" for certain commercial uses of a given size and type that are likely
to have significant impacts on the local economy. The final version of the resolution was the result
of successful negotiating process over several meetings that included representatives from major
commercial developers, the Chamber of Commerce, the Living Wage Coalition, the Petaluma
Neighborhood Coalition, local independent business interests, and City staff. The purpose of the
negotiating sessions were to discuss, in depth, the various concerns and issues raised during the
various public discussions before the Council and to arrive at a policy recommendation that reflected
consensus and compromise among the various interests. As is typical of these kinds of deliberative
processes, none of the participating interests got all of what they wanted in the final
recommendations, but everyone recognized the value of the collective effort to arrive at a policy that
addressed all of the major components and procedures that needed to be included in an effective
FEIA. The final result of these sessions was embodied in Resolution 2008-189 N.C.S., which was
broadly supported by the participating interests and ultimately adopted by the City Council without
further amendment. The resolution outlines the information required from the applicants. the
process by which the FEIA consultant is selected and managed, the content and use of the FEIA, and
public hearing and noticing requirements.
The selection of a consultant to prepare the FEIA is modeled after the process used by the City for
selecting environmental consultants. In general, the consultant is selected and managed by the City;
however, the applicant is responsible for paying all costs associated with the preparation and
administration of the FEIA. In this particular instance, the consultant selected by the City was Bay
Area Economics (BAE). BAE is a multi -disciplinary real estate and urban development advisory
firm with extensive expertise in economic development and development advisory services to public
and private clients. BAE was selected not only for the fine's overall experience with other Bay Area
and Northern California communities in preparing FEIA's in their various forms (e.g., Tracy,
Eureka, Antioch, Morgan Hill, Windsor) but also because of their specific experience with the East
Washington Place project as the "economic blight" sub -consultant on the East Washington Place
draft environmental impact report. In addition, because of BAE's familiarity with the project and its
ready access to some of the data that would be necessary for the FEIA, BAE was selected by the
City without going through the typical "Request for Proposal" process. This was a staff decision
based on general agreement in the policy negotiating sessions that an important component of the
FEIA procedure was to minimize preparation time and cost to the extent feasible, without sacrificing
the scope and quality of the work.
As stated in the report, BAE used the most recently available information at the time of analysis
(December 2008) to establish baseline conditions. Of course, BAE recognizes that over the course of
the FEIA process, conditions may change rapidly, especially in the current economic environment.
The analysis assumes that the project will be fully developed and occupied by the beginning of 2011.
Per the Council Resolution regarding FEIAs, the analysis also looks at a point in time five years after
the assumed project opening date. The analysis also assumes that this will be a fully functioning
center, with the project's outlets achieving a level of revenue reflective of state and national averages
or benclunarks for each sector represented in the project. This is considered a reasonable and
defensible basis upon which to evaluate the potential economic, employment, and fiscal impacts of
the proposed project. Raymond Kennedy of BAE will be present at the public hearing to explain the
findings and answer any questions.
A public hearing on the FEIA is required to be held before the City Council prior to any land use
entitlements being granted for the project. As stated in Section 10 of the FEIA resolution, "The
purpose of the Council FEIA hearing is to have public discussion of project FEIA's with the City
Council, applicants and the public before project land use entitlements are granted." The hearing is
not intended to require or result in separate findings, conclusions or approvals for a project. The
FEIA may be used by deciding bodies during the normal course of project review and the
entitlement process "in determining project consistency with General Plan economic goals, policies
and programs, including whether the project will have a net positive impact on Petaluma's economy,
existing businesses, city finances and quality of life". During the entitlement process the deciding
bodies may accept and adopt the information, analysis, and conclusions of the FEIA as findings in
support of their action concerning the project. Therefore, no specific action is required or expected
from the Council at this time; and there is no requirement that the FEIA is subject to subsequent
amendments, responses to comments or further City Council review. Comments made during the
course of the public hearing on the FEIA are part of the record that subsequent decision -makers can
draw on during the consideration of project entitlements.
3. DISCUSSION:
A Leakage Analysis commissioned by the City of Petaluma in 2005 showed that Petaluma and the
trade area were under -retailed in many major categories. The leakage analysis done as part of the
FEIA carne to the same conclusion. The report also concluded:
• That the East Washington Place project has the potential to capture a sizable portion of these
sales, which are resident expenditures currently going elsewhere. While there may be some
disruption for existing retail outlets, growing overall retail demand linked to the area's
gradual population growth should allow for eventual re -tenanting of any short-term
vacancies.
• East Washington Place should result in a net gain in retail employment estimated at 593 jobs
in 2011. Within the project, there are projected to be 721 permanent jobs, with 667 of those
in the retail sector. The project is also estimated to generate 388 temporary construction
jobs.
• Taking into account local tax and fee revenues generated by East Washington Place and city
costs to provide services, the project will generate an estimated net fiscal surplus of
approximately $1.0 million annually to the City of Petaluma General Fund, owing largely to
the sales taxes generated.
Specific factors required by Resolution 2008-189 N.C.S. to be analyzed in the FEIAs are listed
below with a summary of where in the document each item has been discussed.
a) "The exisling local retail market conditions for uuarket sectors proposed.for the
project, including project primary and significant secondmy market sectors,
leakage of sales to other conununities in those market sectors, regional market
competition in the project market sectors and populations, demographic and related
data for the project market sectors. "
The trade area was defined as the area from which the retail uses in the center are
likely to draw customers. Since shoppers usually go to the store closest to their
residence, the trade area was based largely on the location of other nearby Target
stores and other retail centers in Novato, Rohnert Park and Santa Rosa. Thus, the
trade area was defined as Petaluma and surrounding areas, extending east through
the City of Sonoma, south to Marin County and a limited distance to the north and
west. BAE concluded that there are no "significant" secondary market sectors.
Table 6 on page 11 of the FEIA compares taxable retail sales for Petaluma, Novato,
Rohnert Park and Sonoma County. General merchandise, home furnishings and
appliance sales were found to be very weak in Petaluma. For general merchandise,
2007 taxable sales, when adjusted for inflation, were found to be lower than they
were a decade ago. Table 7 on page 24 of the FEIA shows taxable sales in Petaluma
as compared to Sonoma County in 2007 for other retail store categories.
Demographics, including population, household and employment trends, are
discussed on pages 6 - 9 of the FEIA.
b) "Estintaled retail sales bP project retail sectors or merchandise categories per
square foot, including estiniated captured leakage. "
The project's estimated sales per square foot in each merchandise category is shown in
Table 10 on page 30. Annual sales are estimated to be approximately $329 per square
foot. Table 11 shows the expected capture of leakage by the development, which is
estimated at 33 percent when combining all sales categories.
c) "Current and estimated retail supply and clenmand _for each project retail sector or
merchandise category. "
The significant amount of leakage in the Trade Area shows that there is a demand for
general merchandise stores, food stores, home furnishings and appliances, building
materials and other retail stores. This is discussed on pages 21-23 of the FEIA. Available
supply is discussed on pages 22 through 28 and is broken down by category.
d) Employment characteristics: the number and t}pes of fobs, including construction
related, permanent, part-time and firll-time; whether the project ii,ill result in increased
or decreased permanent part-time jobs, or fill -time jobs, or a combination of both
compared to applicable employment projects; estimated wages, benefits and employer
contributions.
The analysis of employment characteristics begins on page 44. Three hundred eighty-
eight temporary jobs will be created during construction. The consultants used a 2001
employment density study prepared by the Southern California Association of
Governments which estimated 900 square feet of retail store space per employee. Other
categories, such as restaurants and offices, have higher employment densities. Based on
this estimate, the project is expected to generate 721 new jobs, with 390 of those being
full time and 331 part time. Upon opening, the shopping center could result in a loss of
75 jobs in existing retail outlets in Petaluma, but by 2016, due to increases in population,
some of those jobs could be recovered.
Employee wages and benefits will vary depending upon the occupation. Table 17 on page
47 shows estimated wages for likely occupations within the center.
Petaluma's Living Wage Policy was adopted in January of 2007 to ensure that City
employees and employees of City contractors earn an hourly wage that is sufficient to
live with dignity and to achieve self-sufficiency. The Policy does to apply to private
sector employers, but was used by BAE as a standard to compare average wages for
relevant occupations.
The current living wage, which was updated on January 1, 2008, is $13.64 per hour
without an employee medical benefit plan and $12.14 per hour with an employee medical
plan. The average wage data presented in Table 17 does not provide information on the
level of medical and other benefits offered to employees in conjunction with their wage.
However, the average wages for sales and related occupations, office and administrative
support occupations, and construction and extraction occupations exceed the $13.64
living wage hourly standard for employees without medical benefits. Food preparation
and serving -related occupations have the lowest average wage at $10.47 per hour, but
food servers often earn tips that supplement their wages. The 25°i percentile wages,
however, are below the living wage levels for all but the office and construction
occupational categories, indicating that starting wages for new hires could be below the
living wage levels. The report concluded that employee earnings would likely be
comparable to prevailing market wages for similar types of employment throughout the
County.
e)
The estimated impacts of the proposed project on existing retail businesses, including
the polential.for opportunities for business renewal and groii,th clue to nem businesses
locating in the Petaluma community, as hell as the potential,for negalNe impacts such as
reduced sales or closures. "
The discussion on potential impacts on existing businesses begins on page 36. The
discussion includes impacts on types of merchandise as well as on the different shopping
centers and some specific stores in Petalnuna. The report concludes that East Washington
Place has the potential to capture a sizable portion of sales, which are currently lost to
other communities. Some disruption may occur at existing retail outlets, but growing
overall retail demand linked to the area's gradual population growth should allow for
eventual re -tenanting of any short-term vacancies.
J) The estimated project impacts on current mad projected public ren,e7ues.
This part of the analysis begins on page 50. Table 32 shows the revenues as compared to
the community costs and estimates that the proposed project will generate a net fiscal
surplus of approximately $1.0 million annually to the City of Petaluma General Fund.
The non -general fund revenues and costs discussion begins on page 63. Revenues from
Development Impact Fees are expected to be $10,481,097 and the Redevelopment
Agency will receive $472,067. The developer will also be required to improve and
dedicate Kenilworth Drive to the City.
g) The estimated cost of public contributim7s, services and infrastructure required by the
project.
This discussion is on page 66. The City is not planning to extend tax rebates or refunds,
land right -downs, below market or contingent loans, site acquisition or preparation costs,
fee waivers or payments, etc. to the East Washington Place development. Therefore, no
public contribution costs should accrue to the City.
Overall, staff has concluded that the contents and analysis in the East Washington Place FEIA
conform to the requirements contained in Section 6 of Resolution 2008-189 N.C.S. The FEIA further
complies with the policy direction and intent expressed by Section 2, and does "provide an objective
evaluation of the potential economic impacts of [the] specified retail/commercial project."
4. FINANCIAL IMPACTS:
As required by the FEIA policy resolution, the overall assessment of the proposed East Washington
Place development is that the project will generate an estimated net fiscal surplus of approximately
$1.0 million annually to the City of Petaluma General Fund, owing largely to the sales tares
generated.
FISCAL AND ECONOMIC IMPACT ANALYSIS
FOR
PROPOSED EAST WASHINGTON PLACE SHOPPING CENTER
IN PETALUMA, CA
Prepared for:
City of Petaluma
Prepared by:
Bay Area Economics
January, 2009
Bay Area Economics
Headquarters 510.547.9380
1285 66th Street fax 510.547.9388
Emeryville, CA 94608 bael@bael.com
bayareaeconomiaxam
Table of Contents
Executive Summary .............................................................................................. i
Background and Study Purpose .......................... ............. ................................................. i
KeyFindings..................................................................................................................... i
Introduction..........................................................................................................1
Background and Study Purpose....................................................................................... l
ProjectDescription........................................................................................................... l
Approach.......................................................................................................................... 3
Population and Employment Overview..............................................................4
Definition of the Trade Area............................................................................................4
Capture of Leakage by Proposed Project.......................................................................31
PopulationTrends............................................................................................................6
Capture of Sales from Outside the Trade Area..............................................................33
HouseholdTrends............................................................................................................7
Capture of Sales from Other Outlets in the Trade Area.................................................34
EmploymentTrends.........................................................................................................
8
Summary of Demographic and Economic Overview......................................................
8
Retail Sales Analysis.........................................................................................10
Potential Negative Impacts of the Proposed Project on Existing Retailers....................36
OverallRetail Sales........................................................................................................10
Overall Impacts on Retail Stores and Nodes..................................................................39
Per Capita Taxable Retail Sales.....................................................................................13
Potential Cumulative Impacts........................................................................................40
General Merchandise Store Sales..................................................................................14
Summary of Impacts on Existing Retailers....................................................................41
Home Furnishings and Appliances................................................................................14
EmploymentImpacts.........................................................................................44
RestaurantSales.............................................................................................................17
Employment...................................................................................................................
ApparelStores................................................................................................................17
Wagesand Benefits........................................................................................................47
OtherRetail....................................................................................................................18
Summary of Employment Impacts..........................................................................:......49
Retail Sales Elsewhere in the Trade Area......................................................................19
LeakageAnalysis...........................................................................................................21
Major Competing Retail Nodes in Petaluma.................................................................22
Inventory by Key Store Type.........................................................................................27
Inventory by Key Store Type.........................................................................................27
Summary of Retail Sales Analysis.................................................................................28
Retail Impacts Analysis.....................................................................................30
Estimated Sales at Project Opening...............................................................................30
Capture of Leakage by Proposed Project.......................................................................31
Capture of Sales from Outside the Trade Area..............................................................33
Capture of Sales from Other Outlets in the Trade Area.................................................34
Impacts of Proposed Project on Petaluma's Retail Environment..................................36
Opportunities for Renewal and Growth.........................................................................36
Potential Negative Impacts of the Proposed Project on Existing Retailers....................36
Overall Impacts on Retail Stores and Nodes..................................................................39
Potential Cumulative Impacts........................................................................................40
Summary of Impacts on Existing Retailers....................................................................41
EmploymentImpacts.........................................................................................44
Employment...................................................................................................................
44
Wagesand Benefits........................................................................................................47
Summary of Employment Impacts..........................................................................:......49
Fiscal Impact Analysis....................................................................................... 50
Overview........................................................................................................................
50
Projected General Fund Revenues.................................................................................51
Projected General Fund Costs........................................................................................57
Projected Net Fiscal General Fund Balance...................................................................62
Non -General Fund Revenues and Costs......................................................... 63
Development Impact Fees..............................................................................................63
Other Public Revenue Benefits......................................................................................64
Public Contributions to Proposed Project......................................................................66
Summary of Non -General Fund Revenues and Costs....................................................66
Appendices.........................................................................................................
67
Executive Summary
Background and Study Purpose
Regency Centers has submitted a proposal to the City of Petaluma for a large new mixed-use
project of approximately 380,000 square feet, including a region -serving retail center and
commercial/office space. This proposed project is located at the East Washington Street exit
from U.S. Highway 101, to the west of the highway and the south of East Washington.
Concerned about the size and scope of potential large-scale commercial developments in the
City, the Petaluma City Council recently passed a resolution requesting the preparation of a
Fiscal and Economic Impact Analysis (FETA) for projects such as East Washington Place, to
address issues of concern to the City and its citizens. These concerns fall into three areas: (1)
impacts on the retail market and other retailers in Petaluma; (2) types of employment generated,
including likely wages and benefits relative to a living wage; and (3) fiscal impacts, comparing
revenues generated with costs of services required by the new development.
Key Findings
The leakage analysis indicates that Petaluma and the Trade Area are significantly under -retailed
in many major retail categories. East Washington Place has the potential to capture a sizable
portion of these sales, which are resident expenditures currently going elsewhere. While there
is the possibility of some disruption for existing retail outlets, growing overall retail demand
linked to the area's gradual population growth should allow for eventual re -tenanting of any
short-term vacancies.
East Washington Place should result in a net gain in retail employment estimated at 593 jobs in
2011. Within the project, there are projected to be 721 permanentjobs, with 667 of those in the
retail sector. Sales losses at current retailers are estimated to lead to a loss of 75 retail jobs in
existing retail outlets in 2011. By 2016, however, overall retail sales at existing outlets as a
group would be above 2008 baseline levels, leading to overall retail employment also above
baseline levels, although in some retail sectors existing stores would still have lower
employment than in 2008. The permanentjobs in the project will be a mix of full and part-time
typical of retail and office employment. The Proposed Project is also estimated to generate 388
temporary construction jobs,
Target reportedly pays competitive wages that are set at or above the market average, and offers
a range of benefit packages. Starting wages for some new hires in certain components parts of
the project could be below the City's official Living Wage levels, but East Washington Place's
employment structure would not necessarily provide lower wages or benefits than are normally
found for retail workers in the area Average wages in Sonoma County for most of the typical
occupations in the project are above Living Wage levels.
Taking into account local tax and fee revenues generated by East Washington Place and city
costs to provide services, the project will generate an estimated net fiscal surplus of
approximately $1.0 million annually to the City of Petaluma General Fund, owing largely to the
sales taxes generated. This surplus could have a relatively significant positive impact on the
City's overall fiscal position. The City has no plans to make any public contributions to assist
in project development, and development impact fees estimated at $10.5 million should cover
public costs associated with the project. Because of its location in a redevelopment area, East
Washington Place will also generate property tax increment revenues estimated at $472,000
annually which the redevelopment agency can use for improvements in the area and to provide
affordable housing.
In more detail, the findings are as follows:
• Based on the location of competitors and the distance from which the anchor tenant
Target can be expected to draw the majority of its customers, the Trade Area is assumed
to include the City of Petaluma and surrounding areas in southern Sonoma County
extending east and including the City of Sonoma. This area is delineated in large part
by the location of other nearby Target stores.
The Trade Area is characterized by gradual population, employment, and income
growth over the long term. While the economy is currently in recession and extremely
unsettled, the Bay Area continues to see high housing demand, and Sonoma County has
not been as impacted as some other areas of the state by the crisis in the housing
market. The moderate population, household, and income growth all indicate that upon
recovery, retail sales are likely to grow over the long term, with increases in purchasing
power in Petaluma, the Trade Area, and Sonoma County.
• Petaluma and the Trade Area are losing retail sales to other communities for the
categories of General Merchandise Stores (the category encompassing the anchor tenant
Target), Food Stores, Home Furnishings and Appliances, Building Materials, and Other
Retail Outlets.
• Overall, "on the ground" retail conditions in Petaluma appear relatively healthy; there
are few vacancies, although the recent closures of Mervyns and Shoe Pavilion and the
impending closure of Yardbirds Home Depot will cause a rise in vacancy rates.
Limited new retail development in Petaluma in recent years has constrained the retail
market and kept vacancies low.
• At stabilized performance levels, the Proposed Project will achieve estimated total
annual retail sales of approximately $119.2 million. Sales at Target will constitute the
largest share, at slightly more than one-third of this total.
• Much of the new retail space in East Washington Place would be supported by
recapturing Trade Area resident sales currently going to other communities, especially
in the general merchandise store category. Some shoppers from outside the Trade Area
will also shop at the Proposed Project, for example, Novato residents wishing to
frequent a home electronics store, who might otherwise go to stores in San Rafael.
East Washington Place will also capture some sales from existing local retail stores.
For all retail sectors, this capture will lead to a net loss of $12.7 million, or less than one
percent of the 2008 baseline for overall retail sales at the existing outlets. Over time,
these losses will be offset by sales by generated through the overall gradual growth in
population in the Trade Area.
Existing apparel stores, general merchandise stores, home furnishings/appliance stores,
and some stores in the other retail outlets category may continue to have lower than
baseline sales, but overall demand increases in the Trade Area indicate the potential for
re -tenanting by other retail types of any vacated space.
Since they overlap in market niche, the store most likely to be impacted by the new
Target is the existing Kmart. However, even if the entire loss in general merchandise
store sales for 2011 is assigned to Kmart, this store would still have sales above
estimated national averages from Kmart, thus this store would not necessarily face
closure with Target in operation in Petaluma. While Petaluma Plaza North is somewhat
dated in appearance, it benefits from adjacency to Petaluma Plaza, which is completing
a major upgrade with the soon-to-be open Raley's, which will act as a major anchor,
attracting shoppers to both centers even if the Kmart closes, and making the Kmart
space more valuable to potential new tenants. While the approvals process could slow
re -tenanting, the center could end up with a stronger tenant than Kmart.
Based on their anchor tenants, Deer Creek Village (the other large project currently
under consideration by the City) and East Washington Place are targeted toward
somewhat different and complementary retail niches, and even slightly different
geographic areas. This will lessen any cumulative impacts in Petaluma, as the two
projects recapture resident retail expenditures in different market segments. While
individual outlets might be impacted, the overall capture of existing market share is
limited such that the overall retail market should be able to absorb these projects
without the prospect of long-term closures for existing retail outlets.
• While some sales may be captured from existing outlets, the project should result in a
net increase in the number of stores and in overall retail sales in Petaluma.
East Washington Place is estimated to result in a net gain of 593 retail jobs in the Trade
Area in 2011. The Proposed Project is estimated to generate 388 temporary
construction jobs, and 721 permanent jobs, with 667 of these in the retail sector. The
project is expected to capture some sales from existing outlets, and those sales losses
could result in reduced employment, estimated at a loss of 75 retail jobs in existing
retail outlets in 2011. By 2016, however, retail sales in the universe of existing retail
iii
outlets would be above 2008 baseline levels, leading to overall retail employment also
above baseline levels, although some sectors for existing stores would still have lower
employment than in 2008. Retail employment created by the Proposed Project alone
would be greater than the increase previously projected by the Association of Bay Area
Governments for the City of Petaluma for the 2010 to 2015 period_
Of the permanent jobs, slightly more than half are projected to be full-time jobs; an
estimated 250 of the total permanent jobs are associated with the Target store. Retail
employment in general is typified by a large component of part-time workers; the
Proposed Project is not extraordinary in its mix of full and part-time retail jobs. While
full-time work is often sought, and some part-time workers would choose full-time
work given the option, part-time work is more suitable for certain types of workers such
as youths still in school, parents balancing child rearing and careers, and retirees
seeking supplemental income.
Target reportedly pays competitive wages that are set at or above the market average for
jobs with similar skills and responsibilities. Employee earnings at Target and other
tenants at East Washington Place would likely be comparable to the prevailing market
wages in the area for similar types of employment. The average wages for most
occupations likely to be found at East Washington Place exceed the City's Living Wage
standard for employees without medical benefits. Food preparation and serving -related
occupations have average wages below the Living Wage, but food servers often earn
tips that supplement their wage income. Starting wages for new retail hires could be
below the living wage levels, but the Proposed Project's employment structure would
not necessarily provide lower wages than are normally found for retail workers in the
area
Target provides a range of benefits for employees, including paid vacation days, a
broad health care package paid for in part by the employer, a 401(k) plan with employer
matching contributions, an employee assistance program covering a variety of potential
employee needs, and discounts at the store for employees and their families. Benefit
packages for other tenants in the Proposed Project would vary by outlet and owner, and
could vary from extremely limited or no benefits up to or beyond the level provided by
Target.
Taking into account revenues generated and city costs to provide services, the proposed
project will generate an estimated net fiscal surplus of approximately $1.0 million
annually to the City of Petaluma General Fund, owing largely to the sales taxes
generated. This surplus represents 2.8 percent of the City's current General Fund
budget, indicating that the proposed project would have a relatively significant positive
impact on the City's overall fiscal position.
• The City's development impact fees have been recently updated, so estimated fees of
approximately $10.5 million should mitigate and cover public costs associated with the
iv
Proposed Project. Since the project is in the Petaluma Community Development Area,
the Petaluma Community Development Commission should also benefit substantially
from the estimated $472,000 in annual property tax increment, which can be used for
improvements in the area as well as for affordable housing. The City will also benefit
from the developer's plans to improve and dedicate Kenilworth Drive to the City.
Currently, the City has no plans to make any public contributions such as land write-
downs, tax rebates or refunds, below-market or contingent loans to the project, or to pay
for any other costs associated with the development of the project.
Introduction
Background and Study Purpose
The City of Petaluma has received a revised application for the East Washington Place
development, an approximately 380,000 square -foot mixed-use center comprising retail and
office uses at the East Washington Street exit from U.S. Highway 101, to the west of the highway
and the south of East Washington, on the site of the recently demolished Kenilworth Junior High
School. An Environmental Impact Report (EIR) under the California Environmental Quality Act
(CEQA) is currently being completed for the proposed project.
Concerned about the size and scope of this project and other potential large-scale commercial
developments in the City, the Petaluma City Council passed Resolution No. 2008-189 N.C.S.
requesting the preparation of a Fiscal and Economic Impact Analysis (FETA) for projects such as
East Washington Place, to address issues of concern to the City and its citizens. These concerns
fall into three areas: (1) impacts on the retail market and other retailers in Petaluma; (2) types of
employment generated, including likely wages and benefits relative to a living wage; and (3)
fiscal impacts, comparing revenues generated with costs of services required by the new
development. The City of Petaluma has retained Bay Area Economics (BAE) to undertake an
FEIA for this project. BAE aims to use the best available information to assess these impacts;
since BAE is also working on the urban decay/economic impact analysis as part of the EIR for
this project, much of the necessary information has already been gathered for the retail market
analysis portion of this report. In this report, BAE will supplement that analysis with additional
review of the employment and fiscal impacts that are beyond the scope of the EIR. It should be
noted that BAE's analysis uses the most recently available information at the time of analysis
(December 2008), and as a result the information here may vary somewhat from that found in
other studies. Use of the most recent information represents a reasonable effort to establish
baseline conditions. BAE recognizes that over the course of the FEIA process, conditions may
change rapidly, especially in the current economic environment; BAE attempts to take that into
consideration, but future economic conditions may vary from those assumed here.
Project Description
The East Washington Place project (also referred to in this report as the "Proposed Project")
consists of a mixed-use center of approximately 380,000 square feet at the East Washington
Street exit from U.S. Highway 101, to the west of the highway and the south of East Washington,
on the site of the recently demolished Kenilworth Junior High School. The Proposed Project
includes a mix of retail in several large spaces, with a major anchor with 130,762 square feet of
enclosed space plus an 8,089 square -foot garden center, for a total of 138,851 square feet of
anchor space. Other major tenant spaces range from 15,000 to 42,000 square feet; there are also
smaller shop spaces scattered throughout the project, ranging from 5,000 to 10,800 square feet.
Retail space in the project totals 361,951 square feet. In addition, the project contains 16,000
square feet of office space above two of the shop spaces at the corner of East Washington Street
and Kenilworth Drive.
At this time, the only tenant confirmed to BAE is the anchor store, Target. The project sponsors
also report as potential tenants an electronics store and a sporting goods store, although specific
retailers have not been confirmed. Additionally, based on its leakage analysis (see Retail Sales
Analysis chapter of this report) and a mix typical of centers of this type, BAE has made
assumptions about some of the other available space. It should be noted that the actual tenant mix
may vary somewhat from what is postulated here, but this assumed mix provides a reasonable
basis to assess the potential impacts of this project for this FEIA. For the purposes of this
analysis, the Proposed Project is configured as shown in Table 1.
Table 1: East Washington Place Proposed Retail Configuration
Total Center Area 377,951
All sizes are approximate, as reported on the most current available site plan. Tenant mix is
based on information from Regency Centers, potential gaps in the local retail mix highlighted by
the leakage analysis in this report, and typical tenants found in a center of this type.
Sources: Regency Centers; City of Petaluma; Bay Area Economics.
Square
Location Type
Feet
Tenant
At Anchor Indoors
130,762
Target
GC Garden Center
8,089
Target
Total Anchor Space
138,851
M1 Major
15,000
M2 Major
24,000
Home Electronics
M3 Major
20,000
M4 Major
20,000
Apparel
M5 Major
18,300
M6 Major
42,000
Sporting Goods
Si Shops
6,000
S2 Shops
10,000
S3 Shops
8,300
Furniture/Home Fumishings
S4 Shops
8,700
S5 Shops
6,000
S6 Shops
8,300
Restaurant
S7 Shops
9,000
S8 Shops
6,700
Home Electronics
S9 Shops
5,000
S10 Shops
5,000
Sit Shops
10,800
Specialty Food
Total Other Retail Space
223,100
Total Retail Area
361,951
01 Office (2nd Level)
6,000
02 Office (2nd Level)
10,000
Total Office Area
16,000
Total Center Area 377,951
All sizes are approximate, as reported on the most current available site plan. Tenant mix is
based on information from Regency Centers, potential gaps in the local retail mix highlighted by
the leakage analysis in this report, and typical tenants found in a center of this type.
Sources: Regency Centers; City of Petaluma; Bay Area Economics.
Approach
This analysis assumes that the project will be fully developed and occupied by the beginning of
2011. Per the Council Resolution regarding FEIAs, the analysis also looks at a point in time five
years after the assumed project opening date. The analysis also assumes that this will be a fully
functioning center, with the project's outlets achieving a level of revenue reflective of state and
national averages or benchmarks for each sector represented in the project. This is considered a
reasonable and defensible basis upon which to evaluate the potential economic, employment, and
fiscal impacts of the proposed project.
Population and Employment Overview
This section presents background information on current and projected demographic and
economic conditions in Petaluma and the East Washington Place Trade Area. Developing an
economic and demographic profile of Petaluma and the Trade Area will provide background
information that will assist in estimating future retail sales and in assessing the potential impacts
of the Proposed Project on other retail outlets and centers, as well as the employment and fiscal
impacts of the project. Data sources include the U.S. Census Bureau, the California Employment
Development Department (EDD), the California Department of Finance, the Association of Bay
Area Governments (ABAG), and Claritas, a private vendor providing estimates of current and
future demographic conditions.
Definition of the Trade Area
The Trade Area has been defined based on the area from which the Target anchor tenant is likely
to draw most of its customers. This area has been bounded based largely on the location of other
nearby Target stores, on the assumption that shoppers would tend to go to the Target closest to
their residence (see Figure 1). The Trade Area consists of Petaluma and surrounding areas,
Wending east through the City of Sonoma, south to the border with Marin County, and to a very
limited distance to the north and west due to the location of other Target stores nearby in Rohnert
Park and Santa Rosa. This Trade Area is used for all the retail uses in the center; because of
nearby retail nodes in Novato, Rohnert Park, and Santa Rosa, this is the area that would be served
by most region -serving retailers based in Petaluma in a center of this type.
The Trade Area is defined using Census Tracts, and a listing of the Tracts can be found in
Appendix A. This represents the level of geography providing the "best fit' within the
constraints of available demographic data -
4
Figure 1: East Washington Place Trade Area
;otali
-
Sonoma_
etaluma
City of Petaluma
C(ty.
-'116
Napa County Cities
-,
City of Sonoma
_j
Other Sonoma County Cities
Ar
i" w
0 2 4 8 Miles
I I i I I I
5
Project Site
-
Trade Area
City of Petaluma
Marin County Cities
Napa County Cities
-,
City of Sonoma
_j
Other Sonoma County Cities
0 2 4 8 Miles
I I i I I I
5
Population Trends
Short -Term Trends. The Trade Area is undergoing gradual population growth, as shown in
Table 2. Based on estimates from the Association of Bay Area Governments (ABAG), the Trade
Area gained 5,865 persons from 2000 to 2008, with additional growth of 2,605 persons expected
by 2011 (the assumed first full year of project operation), and growth of an additional 2,428
persons five years after the first year of project operation (2016). Slightly over half of the Trade
Area population lives within the City of Petaluma.
Table 2: Population Trends, 2000-2016
(a) Trade Area is 17 Census Tracts as shown in Figure 1 and Appendix A.
(b) Data point for this year is interpolated from ABAG data for 5 -year intervals assuming a constant annual
compound growth rate, with the exception of California, where data points are directly from DOF, Report E-5
for current year, and Race/Ethnic Population with Age and Sex Detail, 2000-2050, July 2007 for future
years. 2000 data from U.S. Census.
Sources: 2000 U.S. Census; Association of Bay Area Governments (ABAG) Projections 2007; California
State Department of Finance (DOF), 2007 & 2008; BAE, 2008.
Long -Term Trends. ABAG projections estimate that Petaluma and the Trade Area will continue
to show gradual population growth, as will Sonoma County (see Table 3). Nearby Novato in
Marin County is projected to show the same pattern. Petaluma's population is projected to reach
67,500 in 2030 and the Trade Area's population is projected to reach 111,279 that same year.
Table 3: Long -Term Population Projections
Average
Average
Annual
Annual
Annual
Change
Change
2000
2008 (b)
2000-2008
2011 (b)
2016 (b)
2008-16
Petaluma
54,548
58,925
1.0%
61,034
63,136
0.9%
Trade Area (a)
94,835
100,700
0.8%
103,305
105,733
0.6%
Sonoma County (b)
458,614
496,756
1.0%
511,713
524,855
0.7%
California (c)
33,871,648
38,049,462
1.5%
39,609,709
42,079,010
1.3%
(a) Trade Area is 17 Census Tracts as shown in Figure 1 and Appendix A.
(b) Data point for this year is interpolated from ABAG data for 5 -year intervals assuming a constant annual
compound growth rate, with the exception of California, where data points are directly from DOF, Report E-5
for current year, and Race/Ethnic Population with Age and Sex Detail, 2000-2050, July 2007 for future
years. 2000 data from U.S. Census.
Sources: 2000 U.S. Census; Association of Bay Area Governments (ABAG) Projections 2007; California
State Department of Finance (DOF), 2007 & 2008; BAE, 2008.
Long -Term Trends. ABAG projections estimate that Petaluma and the Trade Area will continue
to show gradual population growth, as will Sonoma County (see Table 3). Nearby Novato in
Marin County is projected to show the same pattern. Petaluma's population is projected to reach
67,500 in 2030 and the Trade Area's population is projected to reach 111,279 that same year.
Table 3: Long -Term Population Projections
Annual
% Change
2000
2005
2010
2015
2020
2030
2010.2030
Petaluma
54,548
56,500
60,600
62,800
64,500
67,500
0.9%
Novato
47,630
50,700
52,500
54,300
55,800
58,000
0.7%
Trade Area (a)
94,835
97,607
102,816
105,286
107,538
111,279
0.7%
Sonoma County
458,614
478,800
509,100
522,300
535,200
558,900
0.8%
(a) Trade Area is 17 Census Tracts as shown in Figure 1 and Appendix A.
Source: Association of Bay Area Governments Projections 2007.
11
Household Trends
Household Growth. As shown in Table 4, the rates of household growth in Petaluma and the
Trade Area mirror the respective population growth rates. The Trade Area contains an estimated
38,925 households as of 2008, with an increase to 40,041 households projected by 2011 and
41,461 households by 2016.
Table 4: Household Trends, 1990-2010
(a) Target Trade Area is 17 Census Tracts as shown in Figure 1 and Appendix A.
(b) Data point for this year is interpolated from ABAG data for 5 -year intervals assuming a constant
annual compound growth rate. 2000 data from U.S. Census.
Sources: 2000 U.S. Census; Association of Bay Area Governments (ABAG) Projections 2007; SAE, 2008
Household Income. Household incomes and resulting consumer buying power are key factors in
assessing the potential for additional retail development. The Trade Area shows slightly lower
income levels than the Bay Area, with a mean household income of $93,366 in 2008,1 in
comparison to $100,193 for the nine -county ABAG region (see Table 5). Petaluma's mean
household income is only slightly lower than the Trade Area's while Sonoma County as a whole
has a 2008 mean household income of $85,036. ABAG projects very gradual increases in
household income over the next several years.
Table 5: Mean Household Income
Households 2000 2008 2011
2016
Petaluma (a) $90,700 $95,644 $98,126
Average
Trade Area (b) $89,644 $93,366 $95,257
Average
Sonoma County $82,800 $85,036 $67,639
Average
ABAG Region (c) $104,000 $100,193 $103,177
$108,755
In constant 2005 dollars
Annual
(a) Sphere of influence, which is a slightly larger area than the incorporated City.
Annual
Annual
Mateo, Santa Clara, Solaro, and Sonoma Counties.
Change
Change
Change
2000
2008 (b)
2000-08
2011 (b)
2008-11
2016 (b)
2011.16
Petaluma
19,932
21,739
1.1%
22,562
1.3%
23,665
0.9%
Trade Area (a)
36,232
38,925
0.9%
40,041
0.9%
41,461
0.7%
Sonoma County
172,403
188,240
1.1%
194,054
1.0%
201,132
0.7%
(a) Target Trade Area is 17 Census Tracts as shown in Figure 1 and Appendix A.
(b) Data point for this year is interpolated from ABAG data for 5 -year intervals assuming a constant
annual compound growth rate. 2000 data from U.S. Census.
Sources: 2000 U.S. Census; Association of Bay Area Governments (ABAG) Projections 2007; SAE, 2008
Household Income. Household incomes and resulting consumer buying power are key factors in
assessing the potential for additional retail development. The Trade Area shows slightly lower
income levels than the Bay Area, with a mean household income of $93,366 in 2008,1 in
comparison to $100,193 for the nine -county ABAG region (see Table 5). Petaluma's mean
household income is only slightly lower than the Trade Area's while Sonoma County as a whole
has a 2008 mean household income of $85,036. ABAG projects very gradual increases in
household income over the next several years.
Table 5: Mean Household Income
Households 2000 2008 2011
2016
Petaluma (a) $90,700 $95,644 $98,126
$102,462
Trade Area (b) $89,644 $93,366 $95,257
$99,140
Sonoma County $82,800 $85,036 $67,639
$92,479
ABAG Region (c) $104,000 $100,193 $103,177
$108,755
In constant 2005 dollars
(a) Sphere of influence, which is a slightly larger area than the incorporated City.
(b) Trade Area is 17 Census Tracts as shown in Figure 1 and Appendix A.
(c) Nine -county ABAG region includes Alameda, Contra Costa, Mann, Napa, San Francisco, San
Mateo, Santa Clara, Solaro, and Sonoma Counties.
sources: Association of Bay Area Governments (ABAG) Projections 2007; BAE, 2008.
All income estimates in constant 2005 dollars. Estimates for 2008, 20011, and 2016 based on
interpolation of ABAG five-year interval data -
7
Employment Trends
Employed Residents and Unemployment. Employment can be an indicator of regional buying
power; employed workers and their households will have higher incomes and expenditures than
unemployed workers and their households. Growth in the employed labor force of an area can
indicate increased buying power. As shown in Figure 2 and Appendix B, long -tern trends show
an increase in the number of employed residents in Sonoma County, with the number of
employed residents ranging from 244,600 in 2000, declining to 240,900 in 2003, and then
increasing to 250,500 in 2007. Unemployment was at only 3.4 percent in 2000, and then peaked
at 5.5 percent in 2003, with a subsequent decline to 4.4 percent for 2007. Petaluma has tracked at
slightly lower unemployment percentages, with between 29,800 and 31,000 employed persons in
the years from 2000 through 2007. The most recent data from 2007 and the most recent month,
November 2008, reflect the economic downturn, with an increase in unemployment as the
economy tightens, although the estimated size of the employed labor force continues to grow.
Unemployment in November 2008 was measured at 5.9 percent in Petaluma and 6.5 percent in
Sonoma County, and recent trends indicate that the number of unemployed in Sonoma County is
likely to continue increasing in the near term. Over the long term, the trend has been toward an
increased number of residents in the labor force and employed, with unemployment trending
along with national cycles of the economy.
Employment by Sector. Most of East Washington Place will consist of retail outlets. Retail
employment in Sonoma County, at 24,100 jobs, makes up 12.3 percent of the County's overall
employment (see Appendix F for details). This is a slightly higher proportion than statewide,
where 10.9 percent of workers are in the retail sector. The Proposed Project will also have
workers in the leisure and hospitality sector (restaurant workers), as well as employment in
professional and business services or other office -related sectors.
Summary of Demographic and Economic Overview
The Trade Area, which includes the cities of Petaluma and Sonoma and surrounding
unincorporated areas, is undergoing gradual population and household growth. It is estimated the
Trade Area will have 103,305 persons and 40,041 households by 2011. Long term growth is
expected to slow, with the Trade Area projected to have a population of 111,279 in 2030.
The Trade Area exhibits a 2008 estimated mean household income of $93,366 (incomes in
constant 2005 dollars), with modest growth to $95,257 by 2011.
Sonoma County over the long term has shown an increase in the number of employed residents,
with declines and increases following national and regional economic trends. The most recent
data from November 2008 reflect the increasing unemployment as the economy stalls, with
unemployment at 5.9 percent, although the estimated size of the employed labor force continues
to grow.
While currently the economy is in recession and extremely unsettled, the Bay Area continues to
see high housing demand, and Sonoma County has not been as impacted as some other areas of
the state by the crisis in the housing market. The gradual population, household, and income
growth all indicate that upon recovery, retail sales are likely to grow over the long term, with
increases in purchasing power in Petaluma, the Trade Area, and Sonoma County.
Figure 2: Employed Residents and Unemployment Rate
City of Petaluma
35,000
7.0% y
300,000
7.0% m
H 30,000
5.0% E
6.0% 16
w 25,000
`0� 4.0% o
T 150,000
5.0% a
a
2.0%
E
w 50,000
E
20,000
K
b��
4.0% o
w 15,000
n
3.0% E
T
n 10,000
m
2.0% n
E 5,000
1.0% 115a
-
I
0.0% a
o N ry N
N N NooN ,o
—o— Employment
— Unemployment Rale
Sonoma County
350,000
7.0% y
300,000
6.0% ¢
250,000---�p®--
5.0% E
200,000
`0� 4.0% o
T 150,000
E
3.0% m
a 100,000
2.0%
E
w 50,000
E
1.0%
y
0.0% fox
Ngo
—B—Employment Unemployment Rate
Data presented are for residents of the area by place of residence, not workers by place of
work. Annual data are annual averages. For detailed data, see Appendix B.
Sources: California Employment Development Department; Bay Area Economics, 2008.
M
Retail Sales Analysis
This section examines retail trends in Petaluma, the Trade Area, and Sonoma County. For
comparative purposes, data from other nearby cities and the State of California are also presented.
The analysis covers the major tenant types considered for the Proposed Project, as well as
generally considering other categories of likely tenants. Overall retail sales trends in Petaluma,
the Trade Area, and Sonoma County are examined, as are trends for general merchandise stores
and other major store categories assumed as potential tenants for the Proposed Project.
Comparative data for Novato, Rohnert Park, and California are also presented. Summing up the
overall retail analysis is a leakage calculation for the Trade Area, focusing on the store categories
assumed as potential tenants in the Proposed Project. Finally, this section concludes with an
inventory of key competitive existing retail outlets in Petaluma and the Trade Area, by store type
and center location.
Overall Retail Sales
As shown in Figure 3 and Table 6, over the last decade, Petaluma's taxable retail sales' have
grown at a faster rate than population. Taxable retail sales in 1997 were approximately $505
million (all sales here presented in constant 2007 dollars unless otherwise noted), and grew to
approximately $758 million in 2007 for an increase of 50 percent, while population only grew
approximately 14 percent. The largest increases were between 1997 and 2000. After reaching a
peak of $794 million in 2005, sales have been declining more recently, with a more substantial
drop-off between 2006 and 2007.
Novato has shown a similar overall increase in taxable retail sales relative to population, albeit
not quite as pronounced. Between 1997 and 2007, taxable retail sales in Novato grew 38 percent,
while population increased only 17 percent. In Rohnert Park, sales increased 61 percent from
1997 to 2007, while population only increased six percent. Novato sales have not fallen off as
much as in Petaluma, reaching a peak in 2006 with a minimal decline in 2007. The pattern of
decline in Rohnert Park mirrors that of Petaluma.
Overall Petaluma's taxable retail sales remain above these two nearby cities; 2007 Petaluma sales
of $758 million were above Rohnert Park's sales of $574 million and Novato's sales of $595
million.
However, while overall Petaluma is showing strong retail sales, 42 percent of its growth has been
in the automotive sector, where the City shows extremely strong sales. Limiting the analysis to
the major categories suitable for tenancy at East Washington Place by excluding the automotive
and building materials sectors presents a different comparative picture. For the suitable sectors,
3
In California, the State Board of Equalization provides retail sales data by store type for most counties and
for larger cities. This is the most up-to-date and reliable source available, but it only includes taxable sales.
Most food items, prescription drugs, and certain other items are exempt from sales tax, so the reported
taxable sales data exclude these non-taxable sales.
10
Petaluma shows 2007 sales of only $355 million, compared to $405 million in Novato and $431
million in Rohnert Park (see Table 6). By comparison, Santa Rosa has 2007 taxable sales in these
categories of nearly $1.5 billion, likely due to its larger population base and the regional draw of
its broader range of established retail outlets, including the two malls.
Table 6: Comparative Taxable Retail Sales, 2007
Retail Stores Total $757,943 $595,461 $573,890 $5,404,597
East Washington Place Retail Types (d) $355,381 $404,885 $430,923 $3,176,692
Rohnert
Sonoma
Sales in 2007 $000 (a) (b) (c)
Petaluma
Novato
Park
County
Apparel Stores
$65,163
$26,815
#
$258,991
General Merchandise Stores
$51,054
$175,419
$217,032
$845,947
Food Stores
$58,100
$33,440
$37,170
$398,084
Eating and Drinking Places
$84,687
$69,521
$75,291
$592,801
Home Furnishings and Appliances
$13,324
$12,650
$40,211
$222,132
Building Materials
$46,226
$25,356
$76,206
$611,581
Motor Vehicles and Parts
$268,358
$98,845
$27,947
$1,033,898
Service Stations
$87,978
$66,375
$38,814
$582,426
Other Retail Stores
$83,053
$87,040
$61,219
$858,737
Retail Stores Total $757,943 $595,461 $573,890 $5,404,597
East Washington Place Retail Types (d) $355,381 $404,885 $430,923 $3,176,692
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Deflators calculated
by the State Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) reporting taxable sales.
(c) A'V' sign indicates data supressed to preserve confidentiality due to four or fewer outlets or sales of
more than 80% of the category in one store. Suppressed sales have been combined with Other Retail
Stores.
(d) Excludes Building Materials, Motor Vehicle, and Service Station categories.
(e) Population from State Department of Fnance; may vary from other sources.
Sources: State Board of Equalization, Stale Department of Finance; Bay Area Economics, 2008.
11
Rohnert
Sonoma
Sales per Capita in 2007 $ (c)
Petaluma
Novato
Park
County
Apparel Stores
$1,148
$508
#
$540
General Merchandise Stores
$900
$3,326
$5,074
$1,764
Food Stores
$1,024
$634
$869
$830
Eating and Drinking Places
$1,492
$1,318
$1,760
$1,236
Home Furnishings and Appliances
$235
$240
$940
$463
Building Materials
$815
$481
$1,782
$1,275
Motor Vehicles and Parts
$4,729
$1,874
$653
$2,155
Service Stations
$1,550
$1,259
$9D7
$1,214
Other Retail Stores
$1,464
$1,650
$1,431
$1,790
Retail Stores Total (b)
$13,357
$11,291
$13,417
$11,267
East Washington Place Retail Types (d)
$6,263
$7,677
$10,075
$6,623
Population (e)
56,743
52,737
42,772
479,668
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Deflators calculated
by the State Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) reporting taxable sales.
(c) A'V' sign indicates data supressed to preserve confidentiality due to four or fewer outlets or sales of
more than 80% of the category in one store. Suppressed sales have been combined with Other Retail
Stores.
(d) Excludes Building Materials, Motor Vehicle, and Service Station categories.
(e) Population from State Department of Fnance; may vary from other sources.
Sources: State Board of Equalization, Stale Department of Finance; Bay Area Economics, 2008.
11
Fiqure 3: Taxable Retail Sales and Population
$1,000,000
100,000
$900,000 --------------------------------; ---------------
$900.000 - - - ---- -- --- ----------------------- -- ---
90,000
70,000 a
$800,000-----------------------------�® -- $--- ------
80,000
c
Nm $700,000 ------- /Z___£ ______ -
70,000r
70,000 m
$600,000------- �"__-__'------- ----- ----- ------
80,000
a
------------------------
$800,000 -- -� -�- ter' -.50,000
m
_
F $400,000 -__ ________________________________.40,000
`o
$100,000 ---------------,- ----
-----------------------------
a$400,000 ---------------------------------------
40,000
a
m
r $300,000 ..________________________________________________.30,000
D
-6
`o
20,000 U
$100,000 ---------------------------------------------------10,000
$200,000 --------------------------
-20,000
U
r)
$100,000 .-_______________________________________________-
10,000
$0 . 1 10
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
$1,000,000
100,000
$900,000 --------------------------------; ---------------
90,000
$700,000 - - - - - - - - - - - r -------------------------
70,000 a
atN
$800,000 - ---------------'----- -- - - -- - ---
80,000
W
o
$700,000 - - - - - - - - - - - - - - - - - - - - ----- ---------------- -- - - - - --
70,000 m
m
W $800,000 - ------ ---------------- - - ---- -
=
60,000 OM
m
rl
$800,000 -- -� -�- ter' -.50,000
2
_
F $400,000 -__ ________________________________.40,000
`o
$100,000 ---------------,- ----
-----------------------------
10,000 u
$300,000 -------------- _---------------------------------- .30,000
`o
1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 2007
D
$200,000 ----------------------------- --------------------
20,000 U
$100,000 ---------------------------------------------------10,000
$o 10
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
$1,000,000 100,000
$900,000 ------------------------------- ---- 90,000
N
W
$800,000 ------------------------------------
C
80,000 2
N
m
$700,000 - - - - - - - - - - - r -------------------------
70,000 a
m
K $600,000 --------------------- - --- -- -
-�
m
60,000 n.
Y
m
m $500,000 ----------------------- -----------------------50,000
N
p.
c
FN- $400,000
40,000
t
$300,000 --------------------------------- ----------------
30,000 we
$200,000 ----------------------------------- - --; ----------20,000
`o
$100,000 ---------------,- ----
-----------------------------
10,000 u
$0 . 1
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 2007
I-A Total Taxable Relail5alea * Population
Notes: Population data from State Department of Finance. May vary from other sources. Sales here are taxable
sales only, and exclude most food sales as well as prescription drugs and certain other items. Sales are presented
in 2007 dollars. For details, see Appendix C.
Sources: State Board of Equalization; State Department of Finance; Bay Area Economics, 2008.
12
Per Capita Taxable Retail Sales
Per capita retail sales are an indicator of the relative strength of a city as a retail destination; other
factors being equal, higher per capita sales relative to the region point toward attraction of
shoppers from outside the city. As shown in Figure 4 and Table 6 above, Petaluma's per capita
sales in the key retail categories are an indicator of the city's weakness as a destination for non -
automotive retail shopping. While Novato and Rohnert Park show sales per capita above Sonoma
County for those categories (noting of course that Novato is not in the County), Petaluma's key
category per capita sales in recent years have been consistently at or slightly below the same
levels as Countywide, indicating that the City is not doing as well as the other cities at attracting
shoppers from outside the City, and is likely even losing retail sales as Petaluma residents shop
elsewhere in the region. In the early part of this decade, Rohnert Park saw a sharp increase in per
capita sales, indicating increasing capture from outside the city and enlarging its share of regional
sales, but more recently sales have declined slightly. While not at the levels of Rohnert Park,
Novato has consistently performed above Sonoma County and Petaluma.
Figure 4: Comparative Analysis, Per Capita Taxable Retail Sales for Key Retail Categories
$12,000
$10,000
$8,000
$6,000
$4,000
$2000 ______ .. ----- . .. .. .. ........ .. _ -----------
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
I0 Petaluma —M Novato a Rohned Pack r5onoma County
Notes: Incudes only categories of retail outlets likely to locate in East Washington Place. Excludes stores in the
building materials and automotive -related categories. Population data from State Department of Finance, and may
vary from other sources (e.g., ABAG). Sales here are taxable sales only, and exclude most grocery sales as well as
prescription drugs and certain other items. Sales are presented in 2007 dollars. For details, see Appendix C.
Sources: State Board of Equalization; Stale Department of Finance; Bay Area Economics, 2008.
13
General Merchandise Store Sales
Petaluma's relative weakness as a retail destination in comparison with its neighboring cities is
very pronounced in general merchandise sales, as shown in Figure 5. On an inflation-adjusted
basis, general merchandise store taxable sales in 2007 were lower than a decade earlier. Sales
peaked at $68 million in 2001, declining to $51 million in 2007. Some of this decline might be
due to the shifting of sales to Kohl's, which the State Board of Equalization classifies as an
apparel store despite its similarity to Mervyns in carrying apparel and housewares.' In contrast to
Petaluma, general merchandise store taxable sales in Novato are much higher, at $175 million in
2007, an increase of 21 percent over 1997, and Rohnert Park sales are similarly high. The
substantially lower general merchandise store sales in Petaluma cannot be accounted for by
Kohl's alone capturing general merchandise store sales; one key factor is certainly the presence of
Costco in both Novato and Rohnert Park; these stores are very high sales tax generators.
Figure 5: Taxable Sales Trends for General Merchandise Stores in Petaluma,
Rohnert Park, and Novato
N
m $250,000
N
m $225,000
i;
$200,000
m
a
$175,000 - IK W a K
$150,000 - _ ____________________ -----------
$125,000 --______-_$125,000 -'
� $100,000 - .
0
$75.000 ------=- - - ---
m $50,000
a
X $25,000 -.
m
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
a Petaluma --0 Novato --fly---Rohnert P.�
Notes: Sales here are taxable sales only, and exclude most grocery sales as well as prescription drugs
and certain other Items. Sales are presented in 2007 dollars. For details, see Appendix C.
Sources: Stale Board of Equalization; State Department of Finance; Bay Area Economics, 2008.
Home Furnishings and Appliances
The Proposed Project may include at least one major store this category, such as an electronics
outlet. Historically, Petaluma has fared better than Novato for this overall category, but the gap
The Mervyns chain, including the Petaluma store, went out of business at the end of 2008, so sales in the
general merchandise category may be continuing to trend lower in Petaluma.
14
has narrowed in recent years; in 2007 Petaluma had $13.3 million in sales in this category,
compared with only $12.7 million in Novato. However, inflation-adjusted sales have declined in
Petaluma since 1997, while increasing slightly in Novato. Rohnert Park, while showing much
volatility in this category over the decade, has consistently outperformed both Petaluma and
Novato, more so in recent years. In 2007, taxable retail sales for home furnishings and appliances
in Rohnert Park were $40.2 million.
Figure 6: Taxable Sales Trends for Home Furnishings and Appliance Stores
in Petaluma, Rohnert Park, and Novato
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
—A Petaluma — Nwalo —G R.M.A a
Notes: Sales here are taxable sales only, and exclude most grocery sales as well as prescription drugs
and certain other items. Sales presented in 2007 dollars. For details, see Appendix C.
Sources: State Board of Equalization; Stale Department of Finance; Bev Area Economics, 2008.
On a per capita basis for this category, Petaluma lags the County, as shown above in Table 6. Per
capita taxable sales in 2007 in the home furnishings and appliances category in the City are $235,
compared with $463 for Sonoma County overall. In contrast, per capita sales in Rohnert Park are
$940. These data indicate that for this retail category, Petaluma shoppers are likely shopping
elsewhere for goods. BAE's field work confirms the limited number of home furnishings and
appliances retail outlets in Petaluma.
This category is broken out into household/home furnishings and household appliance categories
below in Table 7 for Petaluma and Sonoma County.' As shown, Petaluma appears to have weak
per capita sales in both subcategories, but the difference is more pronounced for the household
appliance category which includes electronics stores, where per capita sales in Petaluma are only
$43, or only 37 percent of the County level of $116 per person.
Note that because of data availability issues, the time period for Table 7 includes 4d' quarter 2006 through
3rd quarter 2007 instead of calendar year 2007.
15
$60,000
H
$50,000 - - - -
mm
m
$40,000u. - -
58
m
— -
m $30,000
E
o
=
m
m
$20,000
a
Vt
F m
$10,000-
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
—A Petaluma — Nwalo —G R.M.A a
Notes: Sales here are taxable sales only, and exclude most grocery sales as well as prescription drugs
and certain other items. Sales presented in 2007 dollars. For details, see Appendix C.
Sources: State Board of Equalization; Stale Department of Finance; Bev Area Economics, 2008.
On a per capita basis for this category, Petaluma lags the County, as shown above in Table 6. Per
capita taxable sales in 2007 in the home furnishings and appliances category in the City are $235,
compared with $463 for Sonoma County overall. In contrast, per capita sales in Rohnert Park are
$940. These data indicate that for this retail category, Petaluma shoppers are likely shopping
elsewhere for goods. BAE's field work confirms the limited number of home furnishings and
appliances retail outlets in Petaluma.
This category is broken out into household/home furnishings and household appliance categories
below in Table 7 for Petaluma and Sonoma County.' As shown, Petaluma appears to have weak
per capita sales in both subcategories, but the difference is more pronounced for the household
appliance category which includes electronics stores, where per capita sales in Petaluma are only
$43, or only 37 percent of the County level of $116 per person.
Note that because of data availability issues, the time period for Table 7 includes 4d' quarter 2006 through
3rd quarter 2007 instead of calendar year 2007.
15
Table 7: Detail for Selected Other Retail Store Categories
Period Covered is 4th Quarter 06 through 3rd Quarter 07
Sonoma
Total Taxable Sales in 2007 $000
Petaluma
County
Household and Home Furnishings
$11,464
$177,176
Household Appliance Dealers
$2,460
$55,872
Total from Home Furnishings/Appliances Group
$13,924
$233,048
Gifts, Art, Novelties
$3,522
$25,554
Sporting Goods
$7,990
$78,320
Florists
$4,585
$16,792
Stationery and Books
$7,184
$52,295
Jewelry
$1,293
$23,543
Office Supplies, Computer Stores
$10,857
$173,497
Packaged Liquor Stores
$1,745
$56,789
Second Hand Merchandise
$1,924
$14,113
Total from Selected Other Retail
$39,100
$440,903
Sonoma
Per Capita Taxable Sales in 2007 $
Petaluma
County
Household and Home Furnishings
$202
$369
Household Appliance Dealers
$43
$116
Total from Home Furnishings/Appliances Group
$246
$486
Gifts, Art, Novelties
$62
$53
Sporting Goods
$141
$163
Florists
$81
$35
Stationery and Books
$127
$109
Jewelry
$23
$49
Office Supplies, Computer Stores
$191
$362
Packaged Liquor Stores
$31
$118
Second Hand Merchandise
$34
$29
Total from Selected Other Retail
$669
$919
Population
66,743
479,668
Includes store subcategories for Other Retail where detail is available for Petaluma. Store
categories not listed are unavailable due to disclosure issues.
Sources: Stale Board of Equalization; Bay Area Economics, 2008.
Additional detail for electronics and appliance stores only is also available from the 2002
Economic Census, and is shown in Appendix D. This confirms that Rohnert Park is
outperforming Petaluma and Novato and Sonoma County overall for the home furnishing and
appliances category. For appliance and electronics stores, this pattern also holds, with Rohnert
Park annual per capita sales at $527, compared with $306 in Petaluma, only $148 in Novato, and
$450 for Sonoma County. Thus, for this subcategory Petaluma likely is losing sales to other
nearby communities, particularly Rohnert Park, and also to the destination retail concentrations in
Santa Rosa and San Rafael. The lack of a major store in this category in Novato indicates that
this is one store type where shoppers from that city might be attracted to such an outlet in
Petaluma.
16
Restaurant Sales
BAE has assumed at least one restaurant will tenant a space in the center; it would be extremely
unusual for a center of this size not to have at least one such establishment. The design of the
center makes it likely that this would be a sit-down type restaurant rather than a fast food
franchise. As shown in Figure 7 and Table 6, Petaluma has shown slightly higher sales than
Novato and Rohnert Park in this category. In 2007, Petaluma had inflation-adjusted taxable sales
in the eating and drinking places category of $85 million, compared to $70 million in Novato and
$75 million in Rohnert Park. On a per capita basis, Petaluma is performing above the level of
Sonoma County; Petaluma's 2007 taxable restaurant sales are $1,492 per capita, compared with
$1,236 countywide. Rohnert Park shows sales above Petaluma, while Novato lags.
Figure 7: Taxable Sales Trends for Eating & Drinking Places in Petaluma,
Rohnert Park, and Novato
$90,000
$80,000
io $70,000—
w $50.000 - -- -- -----------------------------
$50,000
$40,000 r -
N
$30,000
m
a $20,000
m
m $10,000
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
--Petaluma—a—Nwato —a Rohnan Park
Notes: Sales here are taxable sales only, and exclude most grocery sales as well as prescription drugs
and certain other items. Sales presented in 2007 dollars. For details, see Appendix C.
Sources: Stale Board of Equalization; State Department of Finance; Bay Area Economics, 2008.
Apparel Stores
Petaluma has outperformed Novato and Rohnert Park in the Apparel Store retail category, as
shown in Figure 8. Petaluma has 2007 per capita apparel store taxable sales of $1,148, compared
with only $540 for Sonoma County overall. The gap between Petaluma and Novato has widened
in recent years' due to the opening of Kohl's, which caused a considerable jump in apparel store
sales in Petaluma However, per capita apparel store sales in Petaluma were higher than the other
two cities even before Kohl's opened, probably due to the presence of the outlet mall in Petaluma.
Apparel store sales are no longer reported separately for Rohnert Park due to BOE disclosure rules, but it
is unlikely they have increased substantially since the Other Retail category (with which apparel sales have
been combined) has not shown a significant increase in sales since 2003.
17
Figure 8: Taxable Sales Trends for Apparel Stores in Petaluma, Rohnert
Park, and Novato
$70,000
$60,000
N
$50,000
Co
o $40,000
n $30,000
�--- � -
a $20,000
a
a $10,000 `"'r —f7t.
F $0 1
1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 2007
— Petaluma — Novato — Rohnert Park
Notes: Sales here are taxable sales only, and exclude most grocery sales as well as prescription drugs
and certain other items. Sales presented In 2007 dollars. For details, see Appendix C. Data for Rohnert
Park not available for 2004-2007 due to disclosure rules.
Sources: Stale Board of Equalization; State Department of Finance; Bay Area Economics, 2008.
Other Retail
Figure 9 shows trends in sales for Other Retail stores' in Petaluma, Rohnert Park,' and Novato.
In 1997, Petaluma and Rohnert Park lagged Novato in this catch-all category; by 2002, Petaluma
led in this category, only to fall slightly behind Novato again in 2007.
Since this category is so broad, and includes outlets not suitable for East Washington Place (e.g.,
fuel and ice dealers), further analysis was completed on the subcategories for Other Retail, as
shown above in Table 7. Overall, Petaluma's per capita taxable sales for the selected
subcategories' in Other Retail lag the County considerably, at $689 as compared with $919
countywide. This varies widely by category, however. For instance, in the category of stationery
6
This total includes stores in a variety of subcategories, as follows: historically this has included Gifts, Art,
Novelties; Sporting Goods; Florists; Photo Equipment; Musical Equipment; Stationery and Books; Jewelry;
Office, Store, and School Supplies; Other Specialties; Packaged Liquor Stores; Second Hand Merchandise;
Fane & Garden; Fuel & Ice; Mobile Home, Campers, and Trailers; Boat, Motorcycle and Plane; and All
Other Stores. Some additional small categories (e.g., farm implements) were added at the beginning of
2007, and the categories related to vehicles were removed.
Because of the combination of apparel with other retail beginning in 2004, sales for this category for
Rohnert Park are no longer comparable and are not presented here.
B
Because of disclosure rules and changes in the classification scheme beginning in 2007, detail was only
available for the subcategories shown in the table. Data for this table from 4h Quarter 2006 through 3rd
Quarter 2007 rather than calendar year 2007.
18
and books Petaluma,actually shows stronger sales than the County ($127 vs. $109). Sporting
Goods shows levels only slightly below the county, at $141 vs. $163. For Office Supplies and
Computer Stores, however, Petaluma trails far behind the County ($191 vs. $362).
Figure 9: Taxable Sales Trends for Other Retail Stores in Petaluma, Rohnert
Park, and Novato
$120,000
m $700,000-
d
N $so,0000 $60,000 �
•�
N
% $40,000
o_
z $20,000
0
ad $0 t
X 1997 1996 7999 2000 2007 2002 2003 2004 2005 2006 2007
Fm
—a—Petaluma I hl.N .W —a—Rohnert P.*
Notes: Sales here are taxable sales only, and exclude most grocery sales as well as prescription drugs
and certain other items. Sales presented in 2007 dollars. For details, see Appendix C. Data for Rohnert
Park from 2004-2007 not included because apparel sales have been combined with Other Retail group.
Sources: State Board of Equalization; Stale Department of Finance; Bay Area Economics, 2008.
Retail Sales Elsewhere in the Trade Area
The Trade Area includes retail outlets that are located outside Petaluma, and these outlets need to
be considered in evaluating overall retail sales and demand. The only other incorporated place in
the Trade Area is the City of Sonoma, and the taxable sales data from Sonoma city have been
added to Petaluma's to get taxable retail sales for the incorporated portions of the Trade Area, as
shown in Table 8.
Unfortunately, the published taxable sales and Economic Census data do not separate out
unincorporated subareas of a County. To estimate these sales, BAE has relied on a number of
sources, using county data as a baseline for sales per employee by store type, retail employment
data available for the unincorporated Trade Area, and estimating sales by major store category.
This analysis can be found in Appendix E.
The results of this analysis, including total estimated taxable sales by category for the Trade Area,
are shown in Table 8. While the per capita analysis comparing Petaluma to the County and other
nearby cities is instructive, the numbers shown here, when compared to Sonoma County overall
and the state, give a better sense of retail sales in the Trade area vis-a-vis Sonoma County. The
per capita sales comparison with the County here provides the starting point for the leakage
analysis which assesses the retail potential for East Washington Place and its Trade Area,
19
Table 8: Trade Area Taxable Sales
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Dell calculated by the Stale Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) reporting taxable sales.
(c) A "#' sign indicates data supressed to preserve confidentiality due to four or fewer outlets or sales of more than 80% of the category in one
store. Suppressed sales have been combined with Other Retail Stores, so evaluation of changes in the Other Retail category should take this into
consideration.
(d) Incorporated Trade Area consists of Petaluma and Sonoma cities. Unincorporated area sales are estimated as shown In Appendix E.
(e) For City of Sonoma, building materials group sales have been estimated based on last year of available data (2002). Examination of the shift to
"other retail," historic trends, and employment estimates for the sector from the Economic Census indicate that the sales levels have likely remained
relatively constant This estimate has then been subtracted from the estimate for other retail sales for the City of Sonoma. Beginning in 2007,
farm implements are no longer included in this category, but instead have been moved to other retail. Other changes in some smaller categories
have also been made. None of these changes should materially affect the analysis.
(f) With the exception of the Trade Area, per capita sales calculated based an State Board of Equalization reported sales and annual Department of
Finance population estimates benchmarked to the decennial Census. Trade Area population in 2007 has been estimated using the ABAG Census
Tract Projections, assuming a constant annual growth rate from 2005-2010. The populations of Petaluma and Sonoma (city) have been subtracted
out to obtain a population estimate for the unincorporated portion of the Trade Area. The ABAG estimates for Petaluma and Sonoma are not
significantly different from those from DOF.
Sources: State Board of Equalization, 2000 U.S. Census; State Department of Finance, ABAG Projections 2007; Bay Area Economics, 2008.
0401
Trade Area
Sonoma
Incor-
Trade Area
Sonoma
Sales in 2007 $000 (a) (b) (c) (d)
Petaluma
City
porated
Remainder
Trade Area
County.
California
Apparel Stores
$65,163
$8,612
$73,775
$4,791
$78,566
$258,991
$20,855,890
General Merchandise Stores
$51,054
$18,049
$69,103
$251
$69,354
$845,947
$59,897,350
Food Stores
$58,100
$29,835
$87,935
$11,079
$99,014
$398,084
$22,461,059
Ealing and Drinking Places
$84,687
$41,311
$125,998
$18,233
$144,231
$592,801
$51,658,575
Home Furnishings and Appliances
$13,324
$6,174
$19,498
$2,569
$22,067
$222,132
$16,720,852
Building Materials (e)
$46,226
$17,875
$64,101
$21,963
$86,064
$611,581
$32,656,324
Motor Vehicles and Parts
$268,358
$22,954
$291,312
$12,058
$303,370
$1,033,898
$70,779,978
Service Stations
$87,978
$20,844
$108,822
$6,402
$115,224
$582,426
$47,084,940
Other Retail Stores
$83,053
$21,417
$104,470
$14,643
$119,113
$858,737
$64,910,134
Retail Stores Total
$757,943
$187,071
$945,014
$91,989
$1,037,003
$5,404,597
$387,025,102
East Washington Place Categories
$358,381
$125,398
$480,779
$51,566
$532,345
$3,176,692
$236,503,860
Trade Area
Sonoma
Incor-
Trade Area
Sonoma
Sales per Capita in 2007 $ (c) (1)
Petaluma
City
porated
Remainder
Trade Area
County
California
Apparel Stores
$1,148
$870
$1,107
$145
$788
$540
$555
General Merchandise Stores
$900
$1,823
$1,037
$8
$696
$1,764
$1,595
Food Stores
$1,024
$3,014
$1,320
$336
$994
$830
$598
Eating and Drinking Places
$1,492
$4,174
$1,891
$552
$1,447
$1,236
$1,375
Home Furnishings and Appliances
$235
$624
$293
$78
$221
$463
$445
Building Materials (e)
$815
$1,806
$962
$665
$B64
$1,275
$869
Motor Vehicles and Parts
$4,729
$2,319
$4,371
$365
$3,044
$2,155
$1,884
Service Stations
$1,550
$2,106
$1,633
$194
$1,156
$1,214
$1,254
Other Retail Stores
$1,464
$2,164
$1,568
$443
$1,195
$1,790
$1,728
Retail Stores Total (b)
$13,357
$18,900
$14,161
$2,786
$10,406
$11,267
$10,304
East Washington Place Categories
$5,239
$9,655
$5,895
$1,226
$4,348
$5,793
$5,699
Population
56,743
9,898
66,641
33,017
99,658
479,668
37,559,440
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Dell calculated by the Stale Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) reporting taxable sales.
(c) A "#' sign indicates data supressed to preserve confidentiality due to four or fewer outlets or sales of more than 80% of the category in one
store. Suppressed sales have been combined with Other Retail Stores, so evaluation of changes in the Other Retail category should take this into
consideration.
(d) Incorporated Trade Area consists of Petaluma and Sonoma cities. Unincorporated area sales are estimated as shown In Appendix E.
(e) For City of Sonoma, building materials group sales have been estimated based on last year of available data (2002). Examination of the shift to
"other retail," historic trends, and employment estimates for the sector from the Economic Census indicate that the sales levels have likely remained
relatively constant This estimate has then been subtracted from the estimate for other retail sales for the City of Sonoma. Beginning in 2007,
farm implements are no longer included in this category, but instead have been moved to other retail. Other changes in some smaller categories
have also been made. None of these changes should materially affect the analysis.
(f) With the exception of the Trade Area, per capita sales calculated based an State Board of Equalization reported sales and annual Department of
Finance population estimates benchmarked to the decennial Census. Trade Area population in 2007 has been estimated using the ABAG Census
Tract Projections, assuming a constant annual growth rate from 2005-2010. The populations of Petaluma and Sonoma (city) have been subtracted
out to obtain a population estimate for the unincorporated portion of the Trade Area. The ABAG estimates for Petaluma and Sonoma are not
significantly different from those from DOF.
Sources: State Board of Equalization, 2000 U.S. Census; State Department of Finance, ABAG Projections 2007; Bay Area Economics, 2008.
0401
Leakage Analysis
Retail leakage analysis compares actual retail sales in an area with some benchmark that provides
a measure of the potential sales generated by that area's residents. If sales levels are below the
predicted level, the area may be able to support increased sales. This increase in sales could take
the form of increased sales in existing outlets or in new outlets.
A lower -than -predicted sales volume implies that consumers are traveling outside the area to
shop; thus, sales would be `leaking" out of the study area. Conversely, if the area shows more
sales than would be expected from the area's characteristics, there would be sales "injections" into
the study area. Often, an injection of sales indicates that the study area is serving as the regional
shopping destination for a broader area. On the other hand, if an area shows substantial leakage,
it may be due to the presence of a region -serving retail node outside the study area capturing
those "leaked" sales. In such a case, the study area itself may not have sufficient population to
support region -serving retail, so those sales cannot expect to be captured within the study area_
There are a number of factors that can be used to predict sales levels, with the two most important
factors being the number of persons in the area and the disposable income available to that
population. Additional factors influencing retail spending in an area include household type, age
of population, number of workers in the area (i.e., daytime population), tourism expenditures,
tenure patterns (owner vs. renter), and cultural factors.
To develop a benchmark for Petaluma, BAE has assumed that Sonoma County as a whole
represents an appropriate conservative benchmark for sales potential for the Trade Area. Income
levels are similar (albeit slightly higher in the Trade Area), and Sonoma County has a broad range
of retail for its residents such that overall leakage from the county should be minimal. In fact, the
stores in Marin County may attract some shoppers, particularly from the Trade Area at the south
end of Sonoma County, but Sonoma County also acts as a shopping destination for the more rural
counties to the north. Because county income levels are slightly below the Trade Area, this
analysis is inherently conservative. Also making the analysis conservative is that no adjustment
has been made for projected increases in household income leading to future additional retail
expenditures.
Using 2007 taxable sales data as a baseline,' BAE has estimated the additional amount of leakage
of retail sales from the Trade Area in 2008. The results of this analysis are shown in Table 9.
The Trade Area shows significant leakage for General Merchandise Stores, Food Stores, Home
Furnishings and Appliances, Building Materials, and Other Retail Stores. In the key category of
general merchandise stores, where Target could capture a significant share of the leakage, there is
an estimated 2008 leakage of $88.8 million; this leakage is very large relative to the estimated
sales of $115.8 million in this category in the Trade Area. Food store leakages are estimated at
$56.2 million, suggesting that even subsequent to the completion of the new Raley's store (see
discussion below), the Proposed Project might be able to support a specialty food store. An
' From the State Board of Equalization. Data have been adjusted to take into account non-taxable sales, and
adjusted to 2008 levels assuming constant sales per capita.
21
electronics store is assumed to occupy one of the major spaces at East Washington Place; leakage
in the home furnishings/appliance store category that includes these stores is also substantial, at
$24.3 million annually. Building materials stores show leakage of $41.4 million annually, but no
outlets in this category are assumed in the project because of the potential for a large home
improvement center at the proposed Deer Creek project. In the last category suitable for the
Proposed Project, other retail stores show leakages of $59.9 million annually.
These leakages indicate that Petaluma and the Trade Area are significantly under -retailed in many
major retail categories; East Washington Place, if positioned correctly, could capture a sizable
portion of these potential sales.
Major Competing Retail Nodes in Petaluma
The largest tenant designated in the Proposed Project is Target. Other assumed tenants include a
consumer electronics store, an apparel store, a food store, and other retail outlets in a range of
sizes. BAE has identified and inventoried major Trade Area competitors for the Proposed Project
in the general merchandise category which includes Target, and located other key retail types in
Petaluma. Figure 10 shows the competing retail nodes and primary competitive outlets in the
Trade Area_ Because of Sonoma City's small population base and more isolated location, most of
the retail there is either local -serving or tourism oriented; there are no comparable centers in that
city; all the competing centers are in Petaluma itself.
Large retail nodes and centers that include stores potentially most competitive with the Proposed
Project include Petaluma Plaza, Petaluma Plaza North, Washington Square, the Redwood
Gateway Center, Petaluma Village Premium Outlets, and Downtown Petaluma.
Overall, retail conditions in Petaluma appear relatively healthy; there are few vacancies, with the
largest being the recently closed Mervyns and the soon -to -close Yardbirds Home Depot, and
while in some cases the key retail nodes are somewhat dated in appearance and function, none
currently exhibit signs of urban decay or physical deterioration. Brokers interviewed indicated
that the lack of new retail development in Petaluma has constrained the retail market and kept
vacancies low. ,
22
Table 9: Leakage Analysis
2007 Per Capita Estimated 2008 Total Adjusted
Taxable Retail Sales Taxable Retail Sales Retail Sales
2DD7 $ (a) 2D07 $000 (b) 2008 $000 (c)
SC
County,
$268,217
$1,009,123
$1,374,219
$613,919
$230,045
$633,368
$1,070,730
$603,175
$889,329
Notes:
The Trade Area includes the Cities of Petaluma and Sonoma as well as surrounding unincorporated areas, as descited in Figure 1 and Appendix A
(a) From Table 8.
(b) 2007 per capita taxable sales times 2008 population. 2008 population from Table 2, and shown below. Numbers are generally consistent with
DOF estimates used elsewhere.
(c) Sales have been adjusted to take into account non-taxable items for food and drug stores.
Adjustments have been made as follows:
Trade Sonoma
Percent of Total Sales that are Taxable Area County
Drug Stores 30% 386
Food Stores 45% 30
Taxable Sales in 2007 $000
Trade
Sonoma
Trade
Sonoma
Trade
Store Cateoory
Area
County
Area
County
Area
Apparel Stores
$788
$540
$79,387
$268,217
$79,387
General Merchandise Stores
$696
$1,754
$70,079
$876,084
$115,774
Food Stores
$994
$830
$100,049
$412,266
$222,332
Eating and Drinking Places
$1,447
$1,236
$145,739
$613,919
$145,739
Home Furnishings and Appliances
$221
$463
$22,298
$230,045
$22,298
Building Materials
$864
$1,275
$86,964
$633,368
$86,964
Motor Vehicles and Parts
$3,044
$2,155
$306,542
$1,070,730
$306,542
Service Stations
$1,156
$1,214
$116,429
$603,175
$116,429
Other Retail Stores
$1,195
$1,790
$120,358
$889,329
$120,358
2008 Per Capita
Total
Retail
Sales
Per Capita
2008
2007$
Injection/
Injection/
Trade
Sonoma
(Leakage)
(Leakage)
Store Cateoory
Area
County
2007$
2007$000
Apparel Stores
$788
$540
$24B
$25,000
General Merchandise Stores
$1,150
$2,031
($882)
($88,800)
Food Stores
$2,208
$2,766
($559)
($56,200)
Eating and Drinking Places
$1,447
$1,236
$211
$21,300
Home Furnishings and Appliances
$221
$463
($242)
($24,300)
Building Materials
$864
$1,275
($411)
($41,400)
Motor Vehicles and Parts
$3,044
$2,155
$889
$89,500
Service Stations
$1,156
$1,214
($58)
($5,800)
Other Retail Stores
$1,195
$1,790
($595)
($59,900)
SC
County,
$268,217
$1,009,123
$1,374,219
$613,919
$230,045
$633,368
$1,070,730
$603,175
$889,329
Notes:
The Trade Area includes the Cities of Petaluma and Sonoma as well as surrounding unincorporated areas, as descited in Figure 1 and Appendix A
(a) From Table 8.
(b) 2007 per capita taxable sales times 2008 population. 2008 population from Table 2, and shown below. Numbers are generally consistent with
DOF estimates used elsewhere.
(c) Sales have been adjusted to take into account non-taxable items for food and drug stores.
Adjustments have been made as follows:
Trade Sonoma
Percent of Total Sales that are Taxable Area County
Drug Stores 30% 386
Food Stores 45% 30
Taxable Sales in 2007 $000
General Memhandise Taxable Total Ind Drug
$70,079
$876,084
Drug Store Baserine Taxable $000
$17,500 (2002)
$80,546 (2007)
Baseline Population
95,934 (2002)
490,697 (2007)
Durg Store Basefne Per Capita Taxable Sales
$182
$164
Adjusted to 2007 $
$194
$164
Drug Store Est 2008 Taxable $ODD
$19,583
$81,541
Adjustment for Non -Taxable Drug Store
$45,695
$133,040
Total Adjusted General Merchandise
$115,774
$1,009,123
Total Adjusted Food
$222,332
$1,374,219
2008 Population
100,700
496,756
County per capita sales have been assumed as baseline against which to compare the Trade Area. Sales assumed to be "leaking' from the Trade
Area if that area has per capita sales below county benchmark. Sales injections and rapture amounts rounded to nearest hundred thousand dollars.
Sources: Bay Area Economics 2008, based on information from the CA State Board of Equalization, 2000 U.S. Census, 2002 Census of Retail
Trade, and Association of Bay Area Governments.
23
Keegan & Coppin, a real estate brokerage firm with a strong presence in Sonoma County, reports
a third quarter 2008 vacancy rate in Petaluma of 3.8 percent, up from 3.2 percent the previous
quarter and 3.3 percent in third quarter 2007.'o By comparison, the rate reported for Sonoma
County overall for third quarter 2008 was 4.7 percent, up from 3.6 percent a year earlier. Rohnert
Park has a particularly high vacancy rate, reported at 9.3 percent in third quarter 2008. The rates
for Petaluma are lower than the "rule of thumb" five percent vacancy for a stabilized market (in
any retail market, some space is going to be vacant due to turnover and the lifecycle of retailers as
they expand and contract). It should be noted that the additional vacancy of Mervyn, as well as
Shoe Pavilion and Yardbirds Home Depot, which is slated for closure soon, will add substantially
to the 93,121 square feet Keegan & Coppin lists as vacant.
Petaluma Plaza. Petaluma Plaza is directly across Highway 101 from the Proposed Project, at
the northwest corner of McDowell Boulevard and East Washington Street. This center includes
Petco, Ross, Trader Joe's, Big 5 Sporting Goods and a number and variety of smaller stores. This
center is undergoing a major upgrade, with a former JC Penney being replaced by a Raley's
supermarket, which is currently under construction. The imminent opening of this additional
supermarket will likely preclude any major grocery retailer from locating in East Washington
Place, effectively reducing the future leakage of sales in the supermarket category.
Petaluma Plaza North. This center is directly to the north of Petaluma Plaza on McDowell and
includes a Kmart, Longs Drugs," and a mix of other smaller retailers. Kmart, the store most
directly competitive with Target in Petaluma, totals 92,516 square -feet in the Big K format.
While Petaluma Plaza next door has undergone a major facelift, this center's appearance is
somewhat dated, but the center appears to be well-maintained. This Kmart appeared busier and
better -maintained than many other northern California Kmarts visited by BAE in the course of
research for other retail impact studies in the last few years.
Washington Square. This 219,000 square -foot center is located diagonally across from
Petaluma Plaza, on the southeast corner of McDowell and East Washington. The major anchor
retailers were Mervyn and Safeway, but in October 2008, the Mervyns chain, already in
bankruptcy, announced that they would be closing all their remaining outlets by the end of 2008,
including their 66,916 square -foot space in this center. This is now the largest vacant retail space
in the Trade Area.
Redwood Gateway Center. This center is located on the site of the former Pacific Cinemas on
the southwest comer of North McDowell Boulevard and Old Redwood Highway, at the north end
of Petaluma_ At buildout, the center will have a total of 166,713 square feet of space. Major
tenants in this center include Kohl's, Michaels Arts and Crafts, and Pier 1. This 95,900 square -
foot Kohl's is classified as an apparel store by the State Board of Equalization, but also carries
10
Discussion based on various reports available at http://www.keeeanconnin.com. Other brokers directly
interviewed reported higher rates, but did not provide the same level of quantitative support. BAE's field
survey indicated very limited retail vacancies in Petaluma, with the exception of the Theater Square project,
where initial absorption is underway at a somewhat slow rate.
It The Longs Drugs company recently announced its acquisition by CVS, a major national pharmacy chain.
24
housewares and other household items, in a product mix very similar to Mervyns. The Pier 1
store is more specialty -oriented, and as such is not directly competitive with Target. One large
space in this center currently vacant was occupied by Shoe Pavilion, which recently closed all of
its outlets.
Downtown Petaluma. Downtown Petaluma does not have a store directly competitive with
Target, but includes smaller stores that may be affected by the Proposed Project. As of 2004,
Downtown and surrounding areas had an estimated 362,000 square feet of retail space," largely
configured as small storefronts on Petaluma Boulevard and nearby streets. Recently, the Theatre
District Project has added approximately 86,000 square feet of additional retail space to the
Downtown area. Also, the largest single -user space Downtown, the 18,000 square -foot former
Carrithers department store, which had been occupied by a furniture store for several years, is
currently vacant. The broker representing this space reports that it is available both for lease and
for sale.
Petaluma Village Premium Outlets. This factory outlet center consists of specialized off-price
outlets that operate in a specialized niche not directly competitive with the Proposed Project.
This center may account in part for the high apparel sales in Petaluma, attracting visitors from
beyond the East Washington Place Trade Area with stores such as the Saks Fifth Avenue Outlet.
At the time of BAE's most recent visit, the Food Court was closed and undergoing remodeling.
Other Retail Nodes. Other retail centers of note in Petaluma include the Orchard Supply
Hardware center on North McDowell near the new Redwood Gateway Center, Petaluma
Gateway, the Golden Eagle Center on the edge of Downtown, and the Yardbirds Home Depot
store on Lakeville Highway, which is slated to close in the near future. For the most part, the
outlets in these centers are not directly competitive with the region -serving retail planned for the
proposed project. Petaluma Gateway and the Golden Eagle Center are anchored by supermarkets,
and as local -serving centers will not be directly competitive with East Washington Place.
12 Petaluma Leakage & Sustainable Retail Strategy Study, June 2004, Thomas Consultants, Inc.
25
Figure 10: Competing Retail Nodes
26
_I
L
tot
Redwood Gateway Center-
\ / A- t"
-- �"r ' `F ^1•`- •�'.�r Petaluma Village Marketplace'
Petaluma Plaza �.
'•'-
_
Washington Square
Petaluma Plaza North z
k �
Downtown Petaluma
i
t
0 0-5 1 2 Miles
Project Site
Competing Retail Nodes
City of Petaluma
Trade Area
26
Inventory by Key Store Type
General Merchandise Outlets. Until recently, there were two major general merchandise
competitors in the Trade Area centers discussed above: Kmart and Mervyn. The Mervyns
closed at the end of 2008 as the chain went out of business. As noted elsewhere, Kohl's is
considered to be an apparel store by the State Board of Equalization so its sales are not included
with the general merchandise category, even though it is functionally similar to Mervyns and
other traditional department stores.
Other general merchandise stores of note are Saks Fifth Avenue Outlet in the Petaluma Village
Premium Outlets center, and Pier 1 in the Redwood Center (with Kohl's). Additionally, the
Trade Area includes several drug stores, including Longs in Petaluma Plaza North, on East
Washington Street to the west of the proposed project, and in Sonoma City, and a Rite-Aid in
Sonoma City.
Surrounding cities have an ample inventory of competitive general merchandise stores. Target
and Costco have stores bracketing Petaluma in Rohnert Park, Santa Rosa, Novato, and the City of
Napa. Wal-Mart has a store in Rohnert Park. San Rafael and Santa Rosa have malls with full -
line department stores including Macy's, Sears, and JC Penney. The presence of these stores will
limit the East Washington Place Target's ability to attract a significant number of shoppers from
beyond the Trade Area.
BAE estimates that, based on available data," sales per square foot at the major general
merchandise competitors (Kmart and Mervyns at the time of this analysis) were in the range of
$200 to $220 per square foot. This is less than the typical performance for Target or Wal-Mart,
but is generally in line with the performance of other Kmart and Mervyns stores. According to
the ULUICSC's Dollars and Cents of Shopping Centers/The SCORE: 2008, this overall
performance is also below par for discount general merchandise stores nationally." The
impending closure of Mervyn may increase sales somewhat at the existing outlets, although
Kohl's (in the apparel category) is more likely to capture Mervyns sales than Kmart, and this may
increase sales leakages for Petaluma in the general merchandise store category.
Apparel Stores. The largest apparel outlet in Petaluma is the Kohl's, which accounts for a
substantial portion of apparel store sales in the City. An examination of historic trends (as shown
in Appendix C) shows that prior to Kohl's opening, apparel stores sales peaked at approximately
$30 million in 2000; subsequent to the opening of Kohl's, sales climbed to $65 million in 2007.
Some of this has been at the expense of general merchandise stores, where annual sales have
declined by $16.5 million since 2001. JC Penney also closed their Petaluma store in this same
" Taking 2007 taxable sales data and factoring out drug stores and the Saks outlet, most of the remaining
sales are likely at the two major stores, Mervyn, and Kmart. Square footages supplied by City of
Petaluma.
14 Urban Land Institute and International Council of Shopping Center's Dollars & Cents of Shopping
CentemThe SCORE: 2007, median annual sales per square foot for discount department stores in super
community/community shopping centers nationwide were $243.25.
27
time frame. Assuming that the increase is largely due to Kohl's, sales performance in that store is
in the range of $300 per square foot.
Food Stores. BAE did not attempt to inventory all food stores in Petaluma, but noted the
presence of several major supermarkets, including two Lucky stores, a Safeway, Whole Foods,
Trader Joe's, Petaluma Market, and G&G Supermarket, as well as the under -construction
Raley's. There are also supermarkets in the City of Sonoma. The Proposed Project is not
assumed to have a major supermarket, in part because most leakage should be absorbed by the
Raley's, which will offer an additional supermarket choice in Petaluma.
Major Electronics/Appliance Stores. Petaluma and the Trade Area currently have no major
competitors in the electronics store category assumed to be occupying the Proposed Project. The
closest comparable stores are Circuit City and Best Buy in Santa Rosa, and a Best Buy in San
Rafael. " As a result, this planned store in Petaluma may draw from beyond the Trade Area to the
south, especially from the Novato area.
Restaurants. BAE did not attempt to individually inventory restaurants in Petaluma. As
indicated by the leakage analysis, the Trade Area is a net attractor of sales in this category. In
Petaluma, after -inflation per capita sales have risen gradually since 1997, mirroring trends
countywide. Sonoma City has extremely high per capita restaurant sales, reflecting its niche as a
regional tourist destination.
Summary of Retail Sales Analysis
Over the last decade, Petaluma's taxable retail sales have grown at a higher rate than population.
On an inflation-adjusted basis, sales peaked at $794 million in 2005, and as of 2007 had declined
to $758 million. However, while overall Petaluma is showing long-term increases in retail sales,
nearly half of its growth has been in the motor vehicle sector, where Petaluma shows
proportionally strong sales, even as sales in this sector have declined since 2005. Limiting the
analysis to the major categories suitable for tenancy at East Washington Place by excluding the
motor vehicle -related and building materials sectors presents a different comparative picture. For
the suitable sectors, Petaluma shows 2007 sales of only $355 million, compared to $405 million
in Novato and $431 million in Rohnert Park.
Per capita retail sales are an indicator of the relative strength of a city as a retail destination; other
factors being equal, higher per capita sales relative to the region and other cities point toward
attraction of shoppers from outside the city. Petaluma's per capita sales in the key retail
categories likely to be tenants in East Washington Place are another indicator of the city's
weakness as a retail destination, with key category per capita sales in recent years at or near
Countywide levels, while surrounding cities outperform the County and Petaluma. This is
especially the case for Rohnert Park, which saw a sharp increase in per capita sales in the earlier
" Closure of the San Rafael Circuit City store was announced on November 3, 2008; bankruptcy for the
entire chain followed shortly thereafter. The closure of all remaining Circuit City stores by the end of
March was announced on January 16, 2009.
28
part of this decade that indicated increasing capture from outside the city, enlarging its share of
regional sales.
Petaluma's relative weakness as a retail destination in comparison with its neighboring cities is
substantial in the general merchandise store category, with the City lagging behind Rohnert Park
and Novato in overall and per capita sales. Both Petaluma and Novato have lower sales than
Rohnert Park in the home furnishings and appliances store category. For apparel stores, food
stores, and other retail outlets Petaluma actually has stronger per capita taxable sales than either
Rohnert Park or Novato. Apparel store sales are enhanced by the outlet mall and Kohl's.
Key components of the demand for new retail space in the Trade Area are capture of sales to
Trade Area residents that are currently occurring elsewhere (leakage), and population and income
growth. BAE has conservatively assumed no increase in sales from income growth, so the
estimates here for retail sales potential will be based on leakage and population growth only.
Using 2007 taxable sales data as a baseline and adjusting for nontaxable items, the Trade Area
shows significant leakage for General Merchandise Stores, Food Stores, Home Furnishings and
Appliances, Building Materials, and Other Retail.
Large retail nodes and centers that include stores potentially competitive with the Proposed
Project include Petaluma Plaza, Petaluma Plaza North, Washington Square, the Redwood
Gateway Center, Petaluma Village Premium Outlets, and Downtown Petaluma. The center with
the outlet most likely to feel the impacts of the Proposed Project is Petaluma Plaza North with its
Kmart.
Overall, "on the ground" retail conditions in Petaluma appear relatively healthy; there are few
vacancies, with the largest being the recently vacated Mervyns, and although in some cases the
key retail nodes are somewhat dated in appearance and function, none currently exhibit
substantial signs of urban decay and physical deterioration. The limited new retail development
in Petaluma in recent years has constrained the retail market and kept vacancies low.
Looking at the inventory by key retail store types, the most directly competitive store for Target
would be the Kmart, especially following the closure of Mervyn at the end of 2008. The Kmart
shows estimated sales performance above Kmart averages but below general retail benchmarks
for discount general merchandise stores. The largest apparel outlet is Kohl's, which appears to
account for a substantial portion of apparel store sales in the City. Petaluma has several major
supermarkets, covering a range of types from local independent to upscale organic/natural foods;
Raley's will present an additional option for supermarket shoppers in the future, and could
capture much of the leakage in this category. Petaluma and the Trade Area currently have no
major competitors in the home electronics category, with the closest comparable stores located in
Santa Rosa and San Rafael. As a result, a home electronics store in Petaluma may draw from
beyond the Trade Area to the south, especially from the Novato area.
M
Retail Impacts Analysis
This chapter provides estimates of the impacts on sales at existing retail outlets with the Proposed
Project in place. This section begins by estimating sales in East Washington Place, and then
makes assumptions regarding the capture from leakage, capture from residents living outside the
Trade Area, and capture from existing retailers in the Trade Area. The inventory of competing
retail nodes is discussed and the impacts are then analyzed.
Estimated Sales at Project Table 10: Estimated Annual Sales in Project
Opening
Estimated
Potential Sales
BAE has estimated baseline
Square Sales in Proposed
sales levels Of East Washington
Store Comoonent
Feet (a) per SF (b) Project
Apparel Stores
20,000 $360 $7,200,000
Place upon completion in 2011,
General Merchandise Stores
138,851 $317 $44,016,000
assuming stabilized performance
Food Stores
10,800 $235 $2,537,000
and a full of operations. As
Eating and Drinking Places
8,300 $440 $3,652,000
year
Y P
Home Furnishings and Appliances
39,000 $543 $21,177,000
shown in Table 10, the Proposed
Building Materials
- $360 $0
Project is projected to achieve
Motor Vehicles and Parts
$0
total annual sales of
Service Stations
- $0
Other Retail
145,000 $280 $40,600,000
approximately $119 million.
Total
361,951 $329 $119,182,000
Sales in the general merchandise
component of the project
All sales estimates in 2007 dollars. Estimated sales rounded to nearest thousand.
Constitute the largest share, and
(a) Derived from Table 1 per latest site
plan available.
(b) Sales per square foot in relevant categories
has been derived as follows:
are estimated at $44.0 million,
Apparel Stores
Apparel sales per square foot based on averaging the lowest
followed by the catch-all Other
and highest estimates from HdL for each subcategory.
General Merchandise Stores
Average sales per square foot for Target, from most recent
Retail stores category at $40.6
Target Corp. Annual Report
million. The home
Food Stores
ULI national median sales per square foot for
furnishings/appliance store
specialty grocery stores in super regional centers,
Eating and Drinking Places
Restaurant sales per square foot based on averaging the
group is estimated to generate
lowest and highest estimates fmm HdL for each subcategory.
$21.2 million in sales, and the
Home Furnishings and Appliances
Average sales per square foot for Circuit City Superstores, from
remainder of sales are scattered
Building Materials
most recent Circuit City Annual Report
Building Materials sales per square foot based an averaging
among the apparel and food
the lowest and highest estimates from HdL for each
stores and eating and drinking
subcategory.
Other Retail Stores
Other Retail sales per square foot based on averaging the
places.
lowest and highest estimates from HdL for each subcategory.
Sources: Bay Area Economics 2008, based on information from the CA Stale Board of Equalization,
2000 U.S. Census, 2002 Census of Retail Trade, Assodation of Bay Area Governments, Urban Land
InstitutellCSC, Targel, and Circuit City
Annual Reports, Regency Centers, and Hindediter de Lamas
2007 (HdL).
30
Capture of Leakage by Proposed Project
In Table 11, BAE estimates the Proposed Project's potential capture of leakage by major store
category for the assumed first full year of project operation, 2011, and for five years later, in
2016. The analysis indicates substantial leakage of Trade Area resident retail expenditures in
several major store categories, including general merchandise, food, home furnisbings/appliances,
building materials, and other retail. The analysis takes into account that not all of these categories
are suitable for East Washington Place. However, it would speculative to conclude that any given
project could capture all of the leakage in any particular major store category, since that project
would not cover all the specific store types within each major category, and even for a particular
market niche, some shoppers would have preferences for certain stores or items not available in
the project. Table 11 shows the capture rates assumed in this analysis. .
With Target, East Washington Place should capture a substantial percentage of the leakage
occurring in the general merchandise store category. The analysis here assumes a one-third
capture of the estimated $91.1 million annual sales leakage in 2011. While there is additional
leakage, some of this is likely demand for conventional mall stores and other types of general
merchandise stores (e.g., Costco) that would not be recaptured by the Proposed Project.
East Washington Place is not assumed to have a major supermarket as a tenant, thus capture of
the $57.7 million annual leakage in the Food Store category would be limited, with potential
support for a smaller specialty food store in 2011.
A home electronics store is assumed to occupy one of the major spaces at East Washington Place.
Given the lack of competition in the appliances/electronics sector in Petaluma, capture is assumed
at 60 percent of the total $25.0 million in leakage in this category.
No capture of leakage has been assumed in the building materials category; no such tenant has
been proposed for the center, and much of this leakage may be captured by the home
improvement center in the proposed Deer Creek Plaza project. Other types of stores in this
category, such as a hardware or plumbing supply store, would not fit with the overall retail mix of
the project.
In the Other Retail stores category, potential capture has been estimated at one-third of the
estimated $61.5 million in leakage in 2011.
By 2016, an increasing dollar amount of leakage would occur with no change in the retail mix
from baseline 2008 conditions; as a result, there are small increments in the dollar amounts of the
capture in the categories discussed here.
31
Table 11: Capture of Leakage in East Washington Place
2011 Trade Area Leakage Analysis
Per Capita
Total
Capture,
Injection/
Injectlonl
Proposed
Additional
(Leakage)
(Leakage)
Project
Sales
Store Cateoory
2007$
2007$000
2007$000
Apparel Stores
$248
$25,700
0%
$0
General Merchandise Stores
($882)
($91,100)
33%
$30,367
Food Stores
($559)
($57,700)
4%
$2,308
Eating and Drinking Places
$211
$21,800
0%
$0
Home Furnishings and Appliances
($242)
($25,000)
60%
$15,000
Building Materials
(5411)
($42,500)
00/6
$0
Motor Vehicles and Parts
$889
$91,800
Service Stations
($58)
($6,000)
Other Retail Stores
(5595)
($61,500)
33%
$20,500
2016 Trade Area Leakage Analysis
Per Capita
Total
Capture,
Injection/
Injection)
Proposed
Additional
(Leakage)
(Leakage)
Project
Sales
Store Cateoory
2007$
2007$000
2007$ 000
Apparel Stores
$248
$26,300
0%
$0
General Merchandise Stores
($882)
($93,20(1)
33%
$31,067
Food Stores
($559)
($59,100)
4%
$2,364
Ealing and Drinking Places
$211
$22,400
0%
$0
Home Furnishings and Appliances
(5242)
($25,600)
60%
$15,360
Building Materials
(5411)
($43,500)
0%
$0
Motor Vehicles and Parts
$889
$94,000
Service Stations
(S58)
($6,100)
Other Retail Stores
(5595)
($62,900)
33%
$20,967
Notes:
Par capita leakagarinjection from Table 9. See Table 9 for details on methodology. Sales leakages and injectors rounded to
nearest hundred thousand dollars.
Population from Table 2
2011: 103,305
2016: 105,733
Assumptions have been made regaNing possible capture bythe proposed projectof leakage in each category; for
instance, the Trade Area is unlikely to achieve 100 percent capture of general merchandise sales, because sane
general merchandse shopping ismagbased, and and shoppers seeking mall stores are likely to go to Santa Rosa or
elsewhere. The project is assumed not to capWre any sales in categories such as service stations and aubmotive
retal. Leakage in the building materials category is assumed to be captured by the Deer Creek project which as
proposed includes a Lowe's home impromme t center.
Sources: Bay Area Economics 2008, based on information fran l he CA State Board of Equalization, 2000 U.S.
Census, 2002 Census of Retail Trade, Association of Bay Area Governments, Urban land InstitutellCSC, Target and
Circuit City Annual Reports, and Hinderller de Lamas 2007 (HdL).
32
Capture of Sales from Outside the Trade Area
Although the Trade Area should account for the large majority of shoppers for East Washington
Place, Trade Area boundaries are not absolute, and some shoppers from outside the Trade Area
will shop at the Proposed Project. For example, if the center succeeds in attracting a home
electronics store as a tenant, the lack of a similar outlet in Novato might serve to attract shoppers
from northern Marin County. Commuters and others passing through on Highway 101 might also
stop at the center. However, the presence of similar region -serving retail nodes in Rohnert Park,
Santa Rosa, and Novato should limit this attraction for most store types. To the east, shoppers
from beyond the City of Sonoma and other nearby areas could go to the Target stores in Napa.
Out of a total of $119.2 million in sales in the Proposed Project, $7.0 million is assumed to be
captured from outside the Trade Area (see Table 12). Capture is assumed at five percent for the
retail outlet types assumed for the project, with the exception of the home flurtishings/appliances
category, where the lack of competition in Novato may lead to the attraction of more shoppers
from northern Marin County, and food stores, where the assumed capture has been set lower due
to the more local -serving nature of most food stores.
Table 12: Capture from Leakage, Outside Trade Area, and Existing Outlets
2011
Estimated
% Capture
$ Capture
$ Capture
Sales
$ Capture
from
from
from 2011
in Proposed
from
Outside
Outside
Existing
Type of Store
Project (a)
Leakage (b)
Area
Trade Area (c)
Outlets (d)
Apparel Stores
$7,200,000
$0
5%
$360,000
$6,840,000
General Merchandise Stores
$44,016,000
$30,357,000
5%
$2,20D,800
$11,448,200
Food Stores
$2,537,000
$2,308,000
3%
$76,110
$152,890
Eating and Drinking Places
$3,652,000
$0
5%
$182,600
$3,469,400
Home Furnishings and Appliances
$21,177,000
$15,000,000
10%
$2,117,700
$4,059,300
Building Materials
$0
$0
0%
$0
$0
Motor Vehicles and Parts
$0
$0
0%
$0
$0
Service Stations
$0
$0
0%
$0
$0
Other Retail
$40,600,000
$20,500,000
5%
$2,030,DD0
$18,070,000
Total
$119,182,000
$68,175,000
$6,967,210
$44,039,790
2016
Estimated
% Capture
$ Capture
$ Capture
Sales
$ Capture
from
from
from 2011
in Proposed
from
Outside
Outside
Existing
Type of Store
Project (a)
Leakage (b)
Area
Trade Area (c)
Outlets (d)
Apparel Stores
$7,200,000
$0
5%
$360,000
$6,840,000
General Merchandise Stores
$44,016,000
$31,067,000
5%
$2,200,800
$10,748,200
Food Stores
$2,537,000
$2,364,000
3%
$76,110
$96,890
Eating and Drinking Places
$3,652,000
$0
5%
$182,600
$3,469,400
Home Furnishings and Appliances
$21,177,000
$15,360,000
10%
$2,117,700
$3,699,300
Building Materials
$0
$0
0%
$0
$0
Motor Vehicles and Parts
$0
$0
0%
$0
$0
Service Stations
$0
$0
0%
$0
$0
Other Retail
$40,600,000
$20,967,000
5%
$2,030,000
$17,603,000
Total
$119,182,000
$69,758,000
$6,957,210
$42,456,790
(a) From Table 10.
(b) From Table 11.
(c) Percent capture from outside area times estimated sales in Proposed Project.
(d) Estimated capture from existing outlets in Trade Area equals estimated sales in project less sales captured from
leakage and sales captured from outside the Trade Area.
Sources: Bay Area Economics 2008, based on information from the CA Stale Board of Equalization, 2000 U.S.
Census, 2002 Census of Retail Trade, Association of Bay Area Governments, Urban Land Institute/ICSC, Target and
Circuit City Annual Reports, and Hindediler de Lamas 2007 (HdL).
33
Capture of Sales from Other Outlets in the Trade Area
While a new center may capture sales leakages and bring in shoppers from outside the Trade
Area, it will also capture some proportion of its sales from existing outlets in the Trade Area.
Table 12 above also shows estimates of the level of capture by major store category necessary to
achieve benchmark levels of sales performance at the Proposed Project. The total capture from
existing outlets is estimated at $44.0 million, declining to $42.5 million in 2016 as modest
population growth creates additional retail demand.
By category, the largest capture is estimated to be from stores in the other retail category, at $18.1
million in 2011. That same year, capture from existing general merchandise outlets is estimated
at $11.4 million; capture from existing apparel outlets is estimated at $6.8 million; capture from
eating and drinking places is estimated at $3.5 million; and capture from existing home-
furnishings/appliance stores is estimated at $4.1 million.
However, these represent sales that would be captured in each category that year, but sales at
existing outlets (in the absence of the Proposed Project) would have grown from current baseline
levels due to population growth; changes from baseline sales, representing impacts on current
conditions, are shown below in Table 13.
Overall, in 2011 there will be an estimated decline of $12.6 million, or one percent of the baseline
2008 total for overall retail sales. This includes categories not in the project, and also others
where by 2011 the increase in sales overall are assumed to counteract any capture by the project.
The declines in 2011 are substantial for most of the major categories assumed to be present in the
project, even though there is leakage in many of these categories. Sales from existing outlets are
estimated to be captured for apparel, general merchandise, home furnishings/appliances, and the
other retail category. The total estimated capture of sales from existing outlets ranges from $3.5
million for home furnishings/appliance stores to $15.0 million for the other retail stores category.
The range by percentage is from six percent for apparel to 16 percent for home
furnishings/appliances. Even though the project is assumed to have a restaurant and a specialty
food store and will capture some sales from existing outlets, projected population growth in the
market between 2008 and 2011 indicates that the existing stores may still have sales above the
assumed baseline 2008 levels.
By 2016, increases in overall retail demand due to population growth are projected to decrease
the capture from existing outlets. Including retail categories not assumed for East Washington
Place, overall retail sales in existing outlets are projected to increase two percent from current
estimated levels. For the categories showing capture of sales from 2008 levels in existing stores,
the losses range from $2.6 million for home furnishings/appliances to $11.6 million for other
retail stores. Proportionally, losses range from four percent for apparel and general merchandise
stores up to 12 percent for the home furnishings/appliances category.
34
Table 13: Net Change in Sales at Existing Outlets in Trade Area from Baseline 2008
2011
Type of Store
Apparel Stores
General Merchandise Stores
Food Stores
Eating and Drinking Places
Home Furnishings and Appliances
Building Materials
Motor Vehicles and Parts
Service Stations
Other Retail
Total
2016
Type of Store
Apparel Stores
General Merchandise Stores
Food Stores
Eating and Drinking Places
Home Furnishings and Appliances
Building Materials
Motor Vehicles and Parts
Service Stations
Other Retail
Total
Sales in
Sales in
Baseline
Change
Existing
$ Capture
% Capture
Existing
Sales in
in Sales,
% Change
Outlets,
from 2011
from
Outlets,
Existing
2008-
in Sales,
2011 (a)
Existing
Existing,
2011 (d)
Outlets,
2011 (f)
2008.
w/o Project
Outlets (b)
2011 (c)
w Project
2008 (e)
w Project
2011
$81,441,000
$6,840,000
8%
$74,6D1,000
$79,387,000
($4,786,000)
-6%
$118,769,000
$11,448,000
10%
$107,321,000
$115,774,000
($8,453,000)
-7%
$228,083,000
$153,000
0%
$227,930,000
$222,332,000
$5,598,000
3%
$149,509,000
$3,469,000
2%
$146,040,000
$145,739,000
$301,000
0%
$22,875,000
$4,059,000
18%
$18,816,000
$22,298,000
($3,482,000)
-16%
$89,214,000
$0
0%
$89,214,000
$86,964,000
$2,250,000
3%
$314,472,000
$0
0%
$314,472,000
$306,542,000
$7,930,000
3%
$119,441,000
$0
0%
$119,441,000
$116,429,000
$3,012,000
3%
$123,472,000
$18,070,000
15%
$105,402,000
$120,358,000
($14,956,000)
-12%
$1,247,276,000
$44,039,000
4%
$1,203,237,000
$1,215,823,000
($12,586,000)
-1%
Sales in
Sales in
Baseline
Change
Existing
$ Capture
% Capture
Existing
Sales in
In Sales,
% Change
Outlets,
from 2016
from
Outlets,
Existing
2008-
in Sales,
2016 (a)
Existing
Existing,
2016(d)
Outlets,
2016(f)
2008 -
w/o Project
Outlets (b)
2016 (c)
w Project
2008(e)
w Project
2016
$83,355,000
$6,840,000
B%
$76,515,000
$79,387,000
($2,872,000)
4%
$121,560,000
$10,748,200
9%
$110,811,800
$115,774,000
($4,962,200)
-0%
$233,444,000
$96,890
0%
$233,347,110
$222,332,000
$11,015,110
5%
$153,023,000
$3,469,400
2%
$149,553,600
$145,739,000
$3,814,600
3%
$23,412,000
$3,699,300
16%
$19,712,700
$22,298,000
($2,585,300)
-12%
$91,310,000
$0
0%
$91,310,000
$86,964,000
$4,346,000
5%
$321,863,000
$0
0%
$321,863,000
$306,542,OD0
$15,321,000
5%
$122,248,000
$0
0%
$122,248,000
$116,429,000
$5,819,000
5%
$125,374,000
$17,603,000
14%
$108,771,000
$120,358,000
($11,587,000)
-10%
$1,276,589,000
$42,456,790
3%
$1,234,132,210
$1,215,823,000
$18,309,210
2%
(a) From Table 9. Represents sales without Proposed Project in place, based on current per capita spending levels.
(b) From Table 12.
(c) Capture in 2009 divided by sales in 2009 (sales as assumed without Proposed Project).
(d) Represents estimated sales in existing outlets in Trade Areas with Proposed Project open and operating at stabilized levels.
(e) Estimated sales in existing outlets in given year with project in place. From Table 9, derived from most recent taxable sales data with adjustments for
nontaxable items
(f) Estimated change in baseline sales, subtracting baseline sales from 2008 from adjusted sales of existing outlets with project in place
Sources: Bay Area Economics 2008, based on information from the CA State Board of Equalization, 2000 U.S. Census, 2002 Census of Retail Trade,
Association of Bay Area Governments, Urban Land Institute/ICSC, Target and Circuit City Annual Reports, and Hindediter de Lamas 20D7 (HdQ.
35
Impacts of Proposed Project on Petaluma's Retail Environment
Overview. Driven by the above analysis, this section assesses how the Proposed Project might
affect the overall retail environment in Petaluma. Per Resolution No. 2008-189 N.C.S., the FEIA
should consider
[t]he estimated impacts of the proposed project on existing retail businesses, including
the potential for opportunities for business renewal and growth due to new businesses
locating in the Petaluma community, as well as the potential for negative impacts such as
reduced sales or closures.
Thus this FETA needs to look at both positive and negative potential impacts of the proposed East
Washington Place on the City's retail environment. The above retail sales, leakage, and capture
analysis lays the groundwork for this discussion.
Opportunities for Renewal and Growth
The Proposed Project will bring new retail outlets to the City. The anchor tenant, Target,
represents a retailer not currently present in the City. With the closure of Mervyns, and before
that JC Penney, Petaluma residents have relatively limited options when seeking to shop at a
general merchandise store, with Kmart being the only remaining large store of this type (although
Kohl's has a retail mix similar to the former Mervyn and thus competed with that general
merchandise store). There are other gaps in the City's retail fabric that might be filled by some of
the other outlets in East Washington Place, e.g., a mid-size home electronics outlet. The leakage
analysis demonstrates that local residents are probably venturing to other nearby cities to shop
because of the lack of preferred stores within the City. While some sales may be captured from
existing outlets (see discussion below regarding these potential negative impacts), the project
should result in a net increase in the number of stores and in overall retail sales in Petaluma.
Table 13 above shows the overall dollar change from estimated 2008 baseline sales; in 2011 with
the Proposed Project in place, retail sales in the Trade Area are projected to decline $12.6 million
from 2008 levels, with an overall net increase in 2016. It is important to note that some of this
net change is due to population increases in the Trade Area, and that certain sectors directly
competitive with the Proposed Project show losses for existing outlets even in 2016. Thus there
is a potential mix of disruption and closure for some retail types with backfilling of space due to
growing demand in all sectors, including those not assumed for East Washington Place. The
potential negative and disruptive impacts are discussed in more detail in the following section.
Potential Negative Impacts of the Proposed Project on Existing Retailers
Estimated Impacts of Proposed Project on Existing General Merchandise Outlets. The
largest store in the project is Target. Because of overlap in market niche, the store most likely to
be impacted by the new Target is the existing Kmart. Because Target positions itself in a more
upscale niche than Kmart, it is also likely to draw some sales from Kohl's also, but any impacts
on Kohl's may be effectively cancelled out by Kohl's capturing some of the sales previously
going to Mervyns. If the Kmart is performing in the range of $200 to $220 per square foot as
me
estimated above, total annual sales would be in the approximate range of $18 million to $20
million. If the entire loss in general merchandise for 2011 of $5.5 million is assigned to Kmart,
sales would decline to approximately $140 to $160 per square foot. While these numbers seem
low, they are still above estimated national averages from Kmart derived from their most recent
corporate annual report.16 By 2016, growth in the local market would allow Kmart's sales to
recover to near current levels. Since these numbers are above national averages for Kmart, the
opening of Target will not necessarily lead to the closure of the existing Kmart in Petaluma.
Estimated Impacts on Existing Apparel Stores. BAE assumes the presence of a 20,000 square
foot apparel store in East Washington Place; mid-size apparel stores such as Ross and other
17
chains are common in centers of this type. Because of Kohl's and the outlet mall, Petaluma is
not assumed to be leaking sales in this store category, thus any additional apparel outlets would
capture sales in large part from existing stores. In 2011, such a store is estimated to capture
approximately six percent of sales from baseline 2008 levels for existing stores; this estimated
loss would decline in 2016 to four percent of the baseline sales. Because of this limited loss, as
well as the wide range of apparel outlets in the City and the lack of knowledge of the precise
market niche of an apparel store in the Proposed Project, it would be very speculative to assume
sales impacts that would result in the closure of other apparel outlets in the Trade Area. In fact,
other competitors, especially Kolil's, are likely to benefit from the impending closure of Mervyn.
Furthermore, while no leakage is indicated from the analysis above, sales in the outlet mall,
because of its specialized focus, likely come in considerable part from beyond the Trade Area,
and may mask gaps in the more local -serving market for certain types of apparel stores.
Estimated Impacts on Existing Food Stores. BAE's analysis assumes that only a small
specialty food retailer might locate in East Washington Place (e.g., an ethnic food market or a
produce market). Because of the large amount of leakage in this category and population growth,
it is estimated that no sales will be captured from existing outlets. Even in combination with the
under -construction Raley's, this impact will be negligible. No supermarkets or other food stores
can be assumed to be at risk of closure due to the possibility of a small specialty food store in
East Washington Place.
Estimated Impacts on Existing Restaurants. The Trade Area shows attraction of sales in the
Eating and Drinking Places category (see Table 9 above), much of it due to strong tourism -related
sales in Sonoma City. As a result, there is no leakage to be captured, and additional supportable
restaurant space due to population growth is extremely limited. Thus, a restaurant at the
Proposed Project would likely capture sales from existing outlets. However, this capture is very
limited as a proportion of total eating and drinking places sales and the impacts on any particular
restaurant are unknown. One portion of the restaurant market that is under -represented in
Petaluma is national chain full-service restaurants. The Petaluma Leakage & Sustainable Retail
16 Sears Holding Corporation, Form 10-K, for fiscal year ending February 2, 2008.
O Note that Ross is used as the example of a store type, there is already a Ross in Petaluma so that
particular retailer is not assumed to be a tenant in East Washington Place
37
Strategy Study cites this as a market niche showing significant leakage of sales, despite the
overall attraction of sales in the Eating and Drinking Places category.1e
Estimated Impacts in Home Furnishings and Appliances Sector. The Proposed Project
assumes one major retailer in this category. However, Petaluma is very under -retailed in this
overall category and specifically for home appliances/electronics stores, as indicated by the
analysis above. A home electronics store could capture a significant percentage of the leakage in
this category, and with population growth, there is strong demand for a store of this type in the
Trade Area. The Petaluma Leakage & Sustainable Retail Strategy Study cites
electronics/computers as well as home furnishings, appliances, and accessories as additional
sectors with significant leakage of sales.19 The analysis shows a capture of 16 percent of baseline
sales from existing stores in this category, declining to 12 percent by 2016. This level of sales
decline could potentially imperil other competitors in the category, but the lack of specificity
regarding the particular retailer and its product mix makes it impossible to point to a particular
existing store being at risk. In any case, overall demand increases in the Trade Area indicate the
potential for re -tenanting of vacated space due to impacts in this particular sector.
Estimated Impacts on Other Retail Sectors in Petaluma and the Trade Area. In the Other
Retail Stores category, 2008 baseline sales are estimated at approximately $126.4 million.
Because of the sizable leakage in this broad category, East Washington Place is assumed to
capture most of its sales from leakage rather than existing outlets. The ultimate level of impact
will depend in large part on the particular retail types that end up as tenants in the project, and
since the specific retail mix for these stores is unknown at this time, it would be speculative to
assume impacts on particular stores or store types.
Estimated Impacts by Retail Node. The following section considers the impact by retail node
rather than by specific outlets.
Petaktma Plaza and Petaluma Plaza North. A large change for these centers is already in the
works, with Raley's current under construction, replacing the former JC Penney store. It should
be noted that these two centers, while sharing a parking lot to some extent, are under different
ownership; visually, the North center is more dated. As part of its analysis, BAE contacted the
broker for Petaluma Plaza North who believes that Target would be extremely detrimental to
Kmart, and if Kmart closed, the approvals process in Petaluma could make revitalization of the
center difficult, especially if a complete replacement of the existing Kmart space were required."
Other brokers believed, however, that the under -construction Raley's and other strong tenants in
the adjacent Petaluma Plaza will continue to attract shoppers to both centers and if this Kmart
were to close, the vacant space could attract a new tenant. Overall and as discussed above, the
sales data indicate that this Kmart might survive even with Target open, and that the loss of
Kmart, if it did occur, could perhaps lead to re -tenanting in the long run with a stronger tenant or
tenants.
IB
Petaluma Leakage & Sustainable Retail Strategy Study, June 2004, Thomas Consultants, Inc.
Ibid
N
Woolmington-Smith Ventures LLC
38
Washington Square. This center is currently well -tenanted, but Mervyn closed at the end of
2008. Safeway, the other major anchor store, is not likely to be affected to a large degree by the
new center, but will face competition from the Raley's slated for Petaluma Plaza Nevertheless,
the leakages in the food store category should make it possible for Petaluma to support both these
and other existing supermarkets.
Reahvood Gateway Center. The Kohl's in this center could see a loss in sales due to the Proposed
Project, but not at a level that would indicate this fairly successful Kohl's or any of the other
currently operating outlets are at risk of closure. Faced with the competition of East Washington
Place, this store also benefits from its location at the other end of town; since the nearest Kohl's
to the north is on the north end of Santa Rosa, this center is likely attracting shoppers from the
Rohnert Park/Cotati area. This center recently lost one tenant, as Shoe Pavilion closed all its
stores including the one in this center.
Downtown Petaluma. As with most successful downtowns today, Downtown Petaluma has
evolved into a different market niche as other shopping centers have developed in the City,
offering an option for a different kind of shopping/dining/entertainment experience, along with
providing a place for small local start-up businesses serving this unique market niche. With its
historic structures and ambience, the stores here cater to a larger area than the Trade Area,
attracting residents of nearby cities and day -trip tourists. Many of the stores are in the apparel or
other retail category. Whatever the impact on particular stores, the existing Downtown as a
whole will probably be minimally impacted, as it provides a different shopping experience than
East Washington Place.
Petaluma Village Premium Outlets. Like Downtown, this retail node consists of shops that attract
shoppers from a larger region and are generally not directly competitive with the Proposed
Project, and the impacts are likely to be minimal as a result.
Other Retail Nodes. Other retail centers of note in Petaluma include the Orchard Supply
Hardware center on North McDowell near the new Redwood Gateway Center, Petaluma
Gateway, and the Yardbirds Home Depot center on Lakeville Highway; the closing of this last
center's anchor store was announced in January 2009. For the most part, the outlets in these
centers are not directly competitive with the known retail planned for the proposed project None
of the undesignated spaces available in the Proposed Project is suitable for a competitor with
Orchard Supply or Yardbirds Home Depot. Petaluma Gateway is a local -serving center anchored
by a Lucky Supermarket, and will not be directly competitive with East Washington Place.
Overall Impacts on Retail Stores and Nodes
The analysis indicates that some stores may see a loss of sales, particularly the Kmart. However,
while existing general merchandise stores and stores in certain other categories (e.g., home
furnishings/appliances) may show losses of sales, overall retail sales for existing outlets in
Petaluma are estimated to show very limited losses in 2011 relative to current levels, when East
Washington Place is assumed to be in operation, and by 2016, the overall sales in existing outlets
39
should be above current levels. This indicates that even if individual outlets face closure, overall
demand for retail space will lead to demand such that vacated spaces should be re -tenanted within
a reasonable period of time.
Currently there is one large vacant anchor retail space vacant in Trade Area (the recently vacated
Mervyns), and BAE's tour of the existing centers found no current evidence of substantial urban
decay or physical deterioration resulting from vacancy, deferred maintenance, or disinvestment.
If the Proposed Project is built, the center with the potential to face a major vacancy is Petaluma
Plaza North, where the Kmart is at some risk of closure due to the Proposed Project. While a
center representative stated that re -tenanting might be difficult, and the loss of an anchor would
adversely impact the remainder of the center, other brokers indicated that this center is adjacent to
Petaluma Plaza and the two centers effectively function as one large center, with shared parking,
The soon -to -open Raley's would continue act to draw shoppers to both centers, so there is
potentially less risk to the other tenants of Petaluma Plaza North than if Kmart were the only
anchor tenant. Furthermore, Kmart could be replaced by a retailer or retailers who would be
stronger draws to the center. For instance, a store such as Home Depot could re -tenant this
space." Thus, it is unlikely that the possible closure of the Kmart store would necessarily cause
this entire retail center to enter the "downward spiral" into urban decay and deterioration.
Ultimately, if the market proves unable to provide a retail tenant or tenants for this space, the
property owners may have to redevelop the center in some other use, such as mixed use or other
non -retail commercial uses. This site has strong locational advantages with highway access on a
highly traveled highway corridor.
Potential Cumulative Impacts
Deer Creek Village, located the on southwest side of North McDowell Boulevard to the east of
Rainier Avenue, is another large proposed mixed-use project under development in Petaluma on a
tentative schedule similar to East Washington Place. As currently planned, the center will total
approximately 315,000 square feet, largely in retail but with some office space, a bank, and a
fitness club. The anchor tenant, a Lowe's home improvement center, would not be directly
competitive with the retail mix for East Washington Place. Some of the other uses could overlap,
in the categories of apparel, food, home furnishings/appliances, restaurants, and for tenants in the
small shops. The pharmacy in Deer Creek Village, while in the general merchandise category,
would be more local -serving and not directly competitive with the Target.
Overall, based on their anchor tenants, East Washington Place and Deer Creek Village are
targeted in large part toward somewhat different and complementary retail niches, and even
slightly different geographic areas. This will lessen any cumulative impacts in Petaluma. While
individual outlets might be impacted, the total capture of existing market share is limited such
that the overall retail market should be able to absorb these projects without the prospect of long-
term vacancies in existing retail spaces.
21
In recent years, Home Depot has taken over closed Kmart spaces in Oakland, Newark, Morgan Hill, and
Crescent City.
°!C
Summary of Impacts on Existing Retailers
BAE estimates that at stabilized performance levels, the Proposed Project will achieve total
annual sales of approximately $119 million. Sales in the general merchandise component of the
project constitute the largest share, and are estimated at $44.0 million, followed by the other retail
stores category at $40.6 million, and home fumishings/appliance stores at $21.2 million in sales.
The remaining sales are distributed among apparel and food stores and eating and drinking
places.
The Trade Area is estimated to be leaking sales in several major store categories, including
general merchandise, food, home furnishings/appliances, building materials, and other retail.
With the capture rates as assumed for the appropriate retail categories, the Proposed Project could
capture a significant percentage of the leakage occurring in several major retail categories. The
largest portion of this is in the general merchandise store category, with an estimated one-third
capture of the estimated $91.1 million annual sales leakage in 2011. While there is additional
leakage, some of this is likely demand for conventional mall stores and other types of general
merchandise stores (e.g., Costco) that would not be recaptured by the Proposed Project. Capture
of the $57.7 million annual leakage in the Food Store category would be limited, with potential
support for a smaller specialty food store in 2011. Given the lack of competition in the
appliances/electronics sector in Petaluma, capture is assumed at 60 percent of the total $25.0
million in leakage in this category. In the Other Retail stores category, potential capture has been
estimated at one-third of the estimated $61.5 million in leakage in 2011. By 2016, an increasing
dollar amount of leakage would occur with no change in the retail mix from baseline 2008
conditions; as a result, there are small increments in the leakage in the categories discussed here.
By 2016, an increasing dollar amount of leakage would occur with no change in the retail mix
from baseline 2008 conditions; as a result, there are small increments in the dollar amounts of the
capture in the categories discussed here.
Although the Trade Area should account for the large majority of shoppers for East Washington
Place, some shoppers from outside the Trade Area will also shop at the Proposed Project.
However, the presence of similar region -serving retail nodes in Rohnert Park, Santa Rosa, and
Novato limits attraction. Out of a total of $119.2 million in estimated sales in the Proposed
Project, only $7.0 million is assumed to be captured from shoppers residing outside the Trade
Area.
While the Proposed Project may capture sales leakages and bring in shoppers from outside the
Trade Area, it will also capture some proportion of its sales from existing outlets in the Trade
Area. Overall, in 2011 there will be an estimated decline of $12.6 million, or one percent of the
baseline 2008 total, for overall retail sales. By category, the declines are more pronounced for
most of the major categories assumed to be present in the project; sales captures are assumed
from existing outlets in the apparel, general merchandise, home furnishings/appliances, and other
retail category. The estimated capture of sales from existing outlets ranges from $3.5 million for
home furnishings/appliance stores to $15.0 million for the other retail stores category, with the
percentage capture ranging from six percent for general merchandise to 16 percent for home
furnishings/appliance outlets. By 2016, increases in overall retail demand due to population
41
growth are projected to decrease the potential capture from existing outlets, with some categories
which in 2011 showed losses from baseline levels in 2011 showing gains in sales five years later.
Since they overlap in market niche, the store most likely to be impacted by the new Target is the
existing Kmart. If the entire loss in general merchandise store sales for 2011 of $5.6 million is
assigned to Kmart, it is estimated that sales would decline to approximately $140 to $160 per
square foot While these numbers seem low, they are still above estimated national averages
from Kmart. By 2016, growth in the local market would allow the store to recover to near current
sales levels. Since these numbers are above national averages for Kmart, the opening of Target
will not necessarily lead to the closure of the existing Kmart in Petaluma. Due to the limited
estimated loss of six percent of baseline sales in 2011 as well as the wide range of apparel outlets
in the City and the lack of information regarding the precise market niche of an apparel store in
the Proposed Project, it would be speculative to assume any sales impacts that would result in the
closure of other apparel outlets in the Trade Area. Additionally, the presence of the outlet mall
may mask leakages in the subcategory of more local -serving apparel stores. Because of the large
amount of leakage in the food store category and population growth, even in combination with
the under -construction Raley's the impacts on existing food stores are estimated to be negligible.
No supermarkets or other food stores can be assumed to be at risk of closure due to a possible
small specialty food store at East Washington Place.
A restaurant at the Proposed Project would likely capture sales from existing outlets, but this
capture is very limited as a proportion of total eating and drinking places sales, and the impacts
on any particular restaurant are unknown. Furthermore, as with apparel stores, restaurants in
Petaluma may act as destination retail attracting from beyond the East Washington Place Trade
Area; but the City may still be under -retailed in certain niches, such as national chain full-service
restaurants. Petaluma is substantially under -retailed in the home furnishings/appliances sector. A
mid-size home electronics store could capture a significant percentage of the leakage in this
category, and with population growth, there is strong demand for a store of this type in the Trade
Area. The analysis shows a capture of 16 percent of baseline sales from existing stores in this
category, declining to 12 percent by 2016. This level of sales decline could potentially imperil
other competitors in the category, but overall demand increases in the Trade Area indicate the
potential for re -tenanting of vacated space due to impacts in this particular sector.
Because of the sizable leakage in the broad other retail stores category, East Washington Place is
assumed to capture most of its sales from leakage rather than existing outlets in this category.
The ultimate level of impact will depend in large part on the particular retail types that become
tenants in the project, and since the specific retail mix for these stores is unknown at this time, it
would be speculative to assume impacts on particular stores or store types leading to closure of
existing outlets.
The retail node with the greatest potential for substantial impacts is Petaluma Plaza North,
because of the Kmart in that center. A large change for this center is already in the works, with
Raley's currently under construction next door at Petaluma Plaza. The Raley's will act as a major
anchor, attracting shoppers to both centers even if the Kmart closes, and making the Kmart space
more valuable to potential new tenants. While the approvals process could slow re -tenanting, the
42
center could end up with a stronger tenant than Kmart. In any case, the sales data indicate that
this Kmart might survive even with Target open.
Downtown Petaluma has evolved into a different market niche as other shopping centers have
developed in the City, offering an option for a different kind of shopping/dining/entertainment
experience, along with providing a place for small local start-up businesses serving this unique
market niche. With its historic structures and ambience, the stores here cater to a larger area than
the Trade Area, attracting residents of nearby cities and day -trip tourists. Many of the stores are
in the apparel or other retail category. Whatever the impact on particular stores, the existing
Downtown as a whole will probably be minimally impacted, as it provides a different shopping
experience than East Washington Place.
Other retail nodes in the City, because of their different market focus by type of good or size of
market area, are less likely to see impacts leading to closure of existing stores.
The Proposed Project will bring new retail outlets to the City. The anchor tenant, Target,
represents a retailer not currently present in the City; today, Petaluma residents have relatively
limited options when seeking to shop at a general merchandise store. There are other gaps in the
City's retail fabric that might be filled by some of the other outlets in East Washington Place,
e.g., a mid-size home electronics outlet. The leakage analysis demonstrates that local residents
are probably venturing to other nearby cities to shop because of the lack of preferred stores within
the City. While some sales may be captured from existing outlets, the project should result in a
net increase in the number of stores and in overall retail sales in Petaluma. While there is a
potential mix of disruption and closure for some retail stores with backfilling and re -tenanting of
vacated retail space due to growing demand in all sectors, including those not assumed for East
Washington Place.
43
Employment Impacts
The second major component of an FETA as requested per the Council Resolution is an analysis
of potential employment impacts in the City of Petaluma, including types of employment
generated, likely wages and benefits relative to industry standards and/or the City's Living Wage.
This chapter assesses those impacts to the extent possible with available data.
Employment
Job Creation. East Washington Place will create both temporary and permanent jobs in
Petaluma. Assuming the project has a one year construction period, the Proposed Project will
also create an estimated 388 temporary jobs in construction -related fields.
A majority of the permanent jobs created will be in retail and related sectors. The project sponsor
indicated that Target expects to employ approximately 250 workers at East Washington Place.
One-third of these positions would be full-time jobs (more than 32 hours per week) while the
remaining two-thirds would be part-time positions (between 20 and 32 hours per week).
Because specific tenants for the remaining retail spaces have not been confirmed, BAE estimated
new employment levels for these spaces based on the projected tenant mix and frequently -used
employee density figures which estimate the square footage of floor space per employee.
According to a 2001 Employment Density Study prepared for the Southern California
Association of Governments, regional retail stores average approximately 900 square feet per
employee. Other commercial uses such as restaurants and offices have higher employment
densities. As shown in Table 14, the Proposed Project is estimated to generate 721 new jobs,
including 390 full-time positions and 331 part-time positions. An estimated 667 jobs would be in
retail and related industry sectors.
With the exception of Target, the ratio of part-time and full-time workers here is estimated based
on an analysis of retail workers throughout California from the 2000 Census Public Use
Microdata Sample, which provides a breakdown of this ratio by detailed industry sector not
available elsewhere. Because the ratio is derived this way, comparison of the mix in the Proposed
Project to "norms" would effectively be circular. While Target appears to have a large proportion
of part-time employees relative to retail overall, it is not possible with the available data to
determine whether the mix falls outside of industry standards for discount general merchandise
stores.
It is important to note also that part-time employment is more suitable for certain workers and is
thus not necessarily involuntary or inherently an indicator of underemployment or
1
This estimate was arrived at using DAPLAN, an input-output model. M PLAN assumes a certain value of
construction per employee -year in a given area such as Sonoma County. Since construction has been
assumed to take 12 months, employee -years in this case are equivalent to the number of employees. The
cost of the construction is derived from the fiscal impact analysis below (see Table 20).
44
under -utilization of the labor force. For instance, part-time work can be more appropriate for
younger persons still attending school, parents attempting to balance child care needs and careers,
or retired persons seeking some supplemental income. National data from the Current Population
Survey indicate that for the combined retail and wholesale sectors, out of a total of approximately
5.1 million workers in part-time positions, only 13 percent were working part time for economic
reasons (e.g., slowing of business in the workplace, could only find part-time work); the
remainder were working part time due to a desire to work part-time, vacations, illness, or other
reasons.
Table 14: Estimated Permanent Employment
Target (b)
Home Electronics
Apparel
Sporting Goods
Fumiture/Home Furnishings
Restaurant
Specialty Food
Other Retail
Total Retail and Food Services
Office
Total
Notes:
(a) Estimated percentage of employees who are part-time (less than 35 hours per week) based on an
analysis of ratio of full and part-time employment by key industry sectors derived from the 2000 Census
Public Use Microdata Sample (PUMS). See Appendix G.
(b) Employment estimates for Target provided by project sponsor. Approximately 67 percent of
Target employees are expected to be part-time (less than 32 hours per week).
Sources: SCAG Employment Density Summary Report, 2001; U.S. Census 2000 Public Use Microdata
Sample; Regency Centers (for Tarqet data); BAE, 2008
Net Employment Impacts. The entrance of new retail, including a Target, into Petaluma would
increase overall employment in the City, but nevertheless could result in a loss of sales at existing
retail outlets as they adjust to lower sales levels due to the capture of some sales in the Proposed
Project. Using average sales per employee, changes in sales can be translated into estimated
changes in employment levels. As shown in Table 15 below, if the Proposed Project opened in
2011, it would result in a loss of 75 retail jobs in existing retail outlets in the City of Petaluma
from baseline 2008 levels." By 2016, however, expected gains in population would lead to
23
2007 Current Population Survey, Characteristics of the Employed, Table 21, Bureau of Labor Statistics
24
Some of these losses could conceivably occur outside Petaluma but within the Trade Area, but to be
conservative, it is assumed here that all job losses will occur within the City. Additionally, this figure is
based on conditions at the assumed date of project opening in 2011, after sales levels have increased due to
45
Employee
Square
Density
Employment
Feet
(Sq. FLIEmp)
Part -Time (a)
Full -Time
Total
138,851
555
167
83
250
30,700
900
6
29
34
20,000
900
10
13
22
42,000
900
22
25
47
8,300
900
2
7
9
8,300
400
9
12
21
10,800
400
8
19
27
103,000
400
97
161
258
361,951
320
348
667
16,000
300
11
43
53
377,951
331
390
721
Notes:
(a) Estimated percentage of employees who are part-time (less than 35 hours per week) based on an
analysis of ratio of full and part-time employment by key industry sectors derived from the 2000 Census
Public Use Microdata Sample (PUMS). See Appendix G.
(b) Employment estimates for Target provided by project sponsor. Approximately 67 percent of
Target employees are expected to be part-time (less than 32 hours per week).
Sources: SCAG Employment Density Summary Report, 2001; U.S. Census 2000 Public Use Microdata
Sample; Regency Centers (for Tarqet data); BAE, 2008
Net Employment Impacts. The entrance of new retail, including a Target, into Petaluma would
increase overall employment in the City, but nevertheless could result in a loss of sales at existing
retail outlets as they adjust to lower sales levels due to the capture of some sales in the Proposed
Project. Using average sales per employee, changes in sales can be translated into estimated
changes in employment levels. As shown in Table 15 below, if the Proposed Project opened in
2011, it would result in a loss of 75 retail jobs in existing retail outlets in the City of Petaluma
from baseline 2008 levels." By 2016, however, expected gains in population would lead to
23
2007 Current Population Survey, Characteristics of the Employed, Table 21, Bureau of Labor Statistics
24
Some of these losses could conceivably occur outside Petaluma but within the Trade Area, but to be
conservative, it is assumed here that all job losses will occur within the City. Additionally, this figure is
based on conditions at the assumed date of project opening in 2011, after sales levels have increased due to
45
overall estimated retail employment in existing retail outlets in Petaluma being greater than
current baseline levels, although existing retailers in some sectors (e.g., apparel, general
merchandise) could still see losses.
Table 15: Change in Employment at Existing Retail Outlets in the Trade Area
2011
Change
in Sales,
Change in
2008-
Sales
Employment,
2011 (a)
per
Existing
Type of Store
w Project
Employee (b)
Retail Outlets
Apparel Stores
($4,786,000)
$129,000
-37
General Merchandise Stores
($8,453,000)
$266,000
-32
Food Stores
$5,598,000
$213,000
26
Eating and Drinking Places
$301,000
$216,000
1
Home Furnishings and Appliances
($3,482,000)
$235,000
-15
Building Materials
$2,250,000
$401,000
6
Motor Vehicles and Parts
$7,930,000
$370,000
21
Service Stations
$3,012,000
$164,000
18
Other Retail
($14,956,000)
$234,000
-64
Total
($12,586,000)
-75
2016
Change
in Sales,
Change in
2008-
Sales
Employment,
2016 (a)
per
Existing
Type of Store
w Project
Employee (b)
Retail Outlets
Apparel Stores
($2,872,000)
$129,000
-22
General Merchandise Stores
($4,962,200)
$266,000
-19
Food Stores
$11,015,110
$213,000
52
Eating and Drinking Places
$3,814,600
$216,000
18
Home Furnishings and Appliances
($2,585,300)
$235,000
-11
Building Materials
$4,346,000
$401,000
11
Motor Vehicles and Parts
$15,321,000
$370,000
41
Service Stations
$5,819,000
$164,000
35
Other Retail
($11,587,000)
$234,000
-50
Total
$18,309,210
56
(a) Estimated change in baseline sales, subtracting baseline sales from 2008 from adjusted sales of existing
outlets with project in place. From Table 13.
(b) Based on Appendix E County sales and employee totals have been re- aggregated into BOE categories,
inflated to 2007 dollars, to derive sales per employee. Rounded to nearest thousand.
Sources: Bay Area Economics 2008, based on information from the CA State Board of Equalization, 2000
U.S. Census, 2002 Census of Retail Trade, Association of Bay Area Governments, Urban Land
Institute/ICSC, Target and Circuit Citv Annual Reports, and Hindediter de Lamas 2007 (HdL).
While the Proposed Project is anticipated to create an initial reduction of employment at existing
retail outlets, the losses would be offset by the 667 retail jobs created by Target and other tenants.
This would result in a net job creation of 593 new retail positions. As shown in Table 16, net
project population increases. If East Washington Place opened in 2008, the loss ofjobs from baseline
levels would be higher.
46
retail employment created by the Proposed Project alone would exceed Petaluma retail job
growth as projected by the Association of Bay Area Governments for the 2010 to 2015 period.
Table 16: Net Retail Employment, 2011
Job Creation, Proposed Project 667
Job Losses, Edsting Retail Outlets (a) 75
Net Job Creation 593
Projected Retail Job Growth, 2010-2015 (b) 440
Notes:
(a) Estimated job losses at exiting retail outlets in 2011.
(b) ABAG projected growth for Petaluma.
Sources: ABAG, 2007; BAE, 2009
Wages and Benefits
Wages. While a large proportion of employment opportunities at East Washington Place would
be in retail sales and related occupations, the Proposed Project can also be expected to generate
jobs in other areas such as food preparation and serving, building and grounds cleaning and
maintenance, and office and administrative support. Estimated employee wages will vary
depending on the particular occupation. Table 17 provides wage data for relevant occupations in
the Santa Rosa -Petaluma region.
Table 17: Estimated Wages for Likely Occupations in Proposed Project
Wage data reported for Santa Rosa -Petaluma MSA for 1st quarter 2008
Sources: CA Employment Development Department. 2008; SAE, 2009.
The Target Employee Benefits policy indicates that the company pays competitive wages that
are set at or above the market average for jobs with similar skills and responsibilities, but because
wage information is proprietary, the project sponsor did not provide BAE with typical wages for
individual positions at Target. Nevertheless, employee earnings at Target and other tenants at
East Washington Place would likely be comparable to the prevailing market wages in the area for
similar types of employment.
3
Target Employee Benefits, provided by Regency Centers on January 7, 2009.
FFA
Average
Hourly Wage
Annual
25th
75th
Wage
Average
Percentile
Median
Percentile
Sales and Related Occupations
$39,801
$19.14
$9.52
$14.00
$21.94
Food Preparation and Serving -Related Occupations
$21,775
$10.47
$8.19
$9.17
$11.42
Building and Grounds Cleaning and Maintenance Occupations
$27,482
$13.21
$9.53
$11.88
$15.42
Office and Administrative Support Occupations
$36,367
$17.48
$12.70
$16.73
$21.40
Construction and Extraction Occupations
$52,804
$25.39
$1899
$24.92
$30.52
Wage data reported for Santa Rosa -Petaluma MSA for 1st quarter 2008
Sources: CA Employment Development Department. 2008; SAE, 2009.
The Target Employee Benefits policy indicates that the company pays competitive wages that
are set at or above the market average for jobs with similar skills and responsibilities, but because
wage information is proprietary, the project sponsor did not provide BAE with typical wages for
individual positions at Target. Nevertheless, employee earnings at Target and other tenants at
East Washington Place would likely be comparable to the prevailing market wages in the area for
similar types of employment.
3
Target Employee Benefits, provided by Regency Centers on January 7, 2009.
FFA
The City of Petaluma adopted a Living Wage Policy in January 2007, which is intended to ensure
that City employees and employees of City contractors cam an hourly wage that is sufficient to
live with dignity and to achieve self-sufficiency. Although the Living Wage Policy does not
apply to private sector employers who do not do business with the City, it serves as a standard
against which to compare average wages for relevant occupations.
The current living wage, which was updated on January 1, 2008, is $13.64 per hour without an
employee medical benefit plan and $12.14 per hour with an employee medical plan. The average
wage data presented in Table 17 above does not provide information on the level of medical and
other benefits offered to employees in conjunction with their wage. Nevertheless, the average
wages for sales and related occupations, office and administrative support occupations, and
construction and extraction occupations exceed the $13.64 living wage hourly standard for
employees without medical benefits. Food preparation and serving -related occupations have the
lowest average wage at $10.47 per hour, but food servers often earn tips that supplement their
wage income. The 25b percentile wages, however, are below the living wage levels for all but
the office and construction occupational categories, indicating that starting wages for new hires
could be below the living wage levels. It is important to note, though, that the wage data shown
here are based on typical Sonoma County retail wages; the Proposed Project's employment
structure would not necessarily provide lower wages than are normally found for retail workers in
the area.
Benefits. Benefit packages associated with different positions will vary by tenant for part-time
and full-time employees. Employee benefits at Target are summarized below:
Health Care. Target pays the majority of the costs for its employees' health care. On
average, Target pays over 70 percent of an employee's health care premium, including
100 percent of preventive care, such as well baby care, immunizations and annual
physicals. The company offers a variety of health care plans, including a traditional plan,
an HSA plan, two HRA plans, and an HMO plan in some locations. Both the traditional
and flexible consumer health care plans have a cost share program under which Target
pays 80 percent of costs once the deductible has been met.
401(k) Plan. All employees who are 21 years of age or older and have 1,000 hours of
service are eligible to participate in Target's 401(k) plan. Target matches the employee's
401(k) deposits up to five percent of the employee's annual pay. All employee and
employer contributions are 100 percent vested.
Employee Discount Program. All Target employees have free access to an Employee
Assistance Program (EAP), covering a variety of potential employee needs.
Store Discount. All employees and their families receive a discount on all products,
including prescription drugs, purchased in a Target store.
Benefit packages for other tenants in the Proposed Project would vary by outlet and owner, and
could vary from extremely limited or no benefits up to or beyond the level provided by Target.
48
Summary of Employment Impacts
East Washington Place is estimated to result in a net gain of 593 retail jobs in the Trade Area in
2011. The Proposed Project is estimated to generate 833 construction jobs, and 721 permanent
jobs, with 667 of these in the retail sector. 4f the permanent jobs, slightly more than half are
projected to be full-time jobs; an estimated 250 of the total permanent jobs are associated with the
Target anchor store. Retail employment in general is typified by a large component of pari -time
workers; the Proposed Project is not extraordinary in its mix of full and part-time retail jobs.
While full-time work is often sought, and some part-time workers would choose full-time work
given the option, part-time work is more suitable for certain types of workers such as youths still
in school, parents balancing child rearing and careers, and retirees seeking supplemental income.
The project is expected to capture some sales from existing outlets, and those sales losses could
result in reduced employment, estimated at 75 retail jobs in existing retail outlets in 2011. By
2016, however, overall retail sales in the universe of existing retail outlets would be above 2008
baseline levels, indicating that overall retail employment would also be above baseline levels,
although for some sectors existing stores would still have lower employment than in 2008. The
increase in net retail employment in Petaluma related to the Proposed Project would be greater
than levels projected by the Association of Bay Area Governments for the same time period.
Most of the permanent jobs at East Washington Place would be in retail occupations, but there
would also be additional jobs in other areas such as food preparation and serving, building and
grounds cleaning and maintenance, and office and administrative support. Estimated employee
wages will vary depending on the particular occupation. Target reportedly pays competitive
wages that are set at or above the market average for jobs with similar skills and responsibilities,
but because wage information is proprietary, the project sponsor did not provide BAE with
typical wages for individual positions at Target. Nevertheless, employee earnings at Target and
other tenants at East Washington Place would likely be comparable to the prevailing market
wages in the area for similar types of employment.
The average wages for sales and related occupations, office and administrative support
occupations, and construction and extraction occupations exceed the City's Living Wage standard
for employees without medical benefits. Food preparation and serving -related occupations have
wages below the Living Wage, but food servers often earn tips that supplement their wage
income. While these averages are generally above the Living Wage, starting wages for new hires
could be below the living wage levels. However, the Proposed Project's employment structure
would not necessarily provide lower wages than are normally found for retail workers in the arca
Target provides a range of benefits for employees, including a broad health care package paid for
in part by the employer, a 401(k) plan with employer matching contributions, an employee
assistance program covering a variety of potential employee needs, and discounts at the store for
employees and their families. Benefit packages for other tenants in the Proposed Project would
vary by outlet and owner, and could vary from extremely limited or no benefits up to or beyond
the level provided by Target.
49
Fiscal Impact Analysis
Overview
The fiscal impact analysis focuses on projecting the balance of ongoing municipal revenues and
municipal service costs associated with the proposed East Washington Place commercial
development at buildout. Although development would not be completed by the end of 2009, all
cost and revenue estimates are in current, 2009, dollars. The primary focus of the fiscal impact
analysis is on the City of Petaluma General Fund, which receives the City's revenues for
discretionary expenditures and funds the City's primary public municipal services.
This analysis uses a combination of techniques to estimate the increases in costs and revenues.
Where possible, the increases in revenues are modeled following the manner in which they are
collected and allocated to the City. For example, increases in property tax revenues are based on
an estimate of the increase in assessed valuation associated with a given project component. In
other cases, where this type of detailed modeling is not possible due to lack of adequate data,
BAE utilized revenue multipliers that represent the City's current average revenue per service
population". The same general approach applies to the service cost portions of the model.
Generally, this methodology presents a reasonably conservative analysis of the potential fiscal
impacts of the proposed project. Table 18 presents the development plan summary, including
estimates of the number of employees as derived above, as well as an estimate of the total number
of businesses for each use category
Table 18: Proposed East Washington Place Development Plan
Note:
(a) Service population equals resident population plus one-half the employment population
Sources: Recency Centers; City of Petaluma; Bay Area Economics
36
Service population equals the resident population plus one half of the number of employees. This scaling
of employees represents the lower service demand of employees relative to residents.
50
Square
Sq. Ft. Per
New
# of New
Use Category
Feet
Employee
Employees
Businesses
Apparel Stores
20,000
900
22
1
General Merchandise Stores
138,851
nla
250
1
Food Stores
10,800
400
27
1
Eating and Drinking Places
8,300
400
21
1
Home Furnishings and Appliances
39,000
900
43
1
Other Retail
145,000
n/a
304
13
Office
16,000
300
53
4
Total
377,951
721
22
Additional Service Population (a)
360
Note:
(a) Service population equals resident population plus one-half the employment population
Sources: Recency Centers; City of Petaluma; Bay Area Economics
36
Service population equals the resident population plus one half of the number of employees. This scaling
of employees represents the lower service demand of employees relative to residents.
50
Projected General Fund Revenues
This portion of the analysis projects the anticipated increase in the City of Petaluma General Fund
revenues from the proposed commercial development. The main focus of this analysis includes
Property Tax Revenues, Property Tax In -Lieu of Vehicle License Fees (ILVLF), and Sales Tax
revenues.
Sales Tax Revenues. According to the retail impacts section of this report, the proposed project
should generate sales of approximately $119.2 million, of which 93 percent are estimated to be
taxable based on the proposed development program.' The City receives slightly less than one
percent of all taxable sales as Sales Tax revenues. Thus, the proposed project should generate
approximately $1.1 million in sales tax revenues for the City General Fund. Table 15 shows the
projected sales tax revenues from the Proposed Project.
It should be noted that some portion of the development's sales could come from existing retail
within the City, at least in the short run. Thus, the short-term projected sales tax revenues are
likely overstated to some extent. However, as the retail impacts section of the analysis shows that
overall citywide sales should grow over time, and all existing retail space should be re -absorbed
in the long -run, these sales tax revenue projections represent a reasonable estimate for ongoing
fiscal impacts.
Table 19: Projected Sales Tax Revenues
2009
Isaias Tax Revenues
Dollars
Total
Percent
Taxable
Development Summary
Square Feet
Sales
Taxable
Sales
Apparel Stones
20,000
$7,200,000
100%
$7,200,000
General Merchandise Stores
138,651
$44.016,000
85%
$37,413,600
Food Stores
10,800
$2,537,000
30%
$761,100
Eating and Drinking Places
8,300
$3,652,000
100%
$3,652,000
Home Furnishings and Appliances
39,000
$21,177,000
100%
$21,177,000
Other Retail
145,000
$40,500,000
100%
$40,600,000
2009
Isaias Tax Revenues
Dollars
New Taxable Sales (a)
$110,803,700
City's Share of Taxable Sales
0.975%
(Total Sales Tax Revenues
$1,080,336
(a) Based on Table 10 with adjustments
for non-taxable sales. Adjustments are more conservative than
ratios shown per Appendix D.
Sources: City of Petaluma; BAE, 2008.
27
Note that the sales estimates were in 2007 dollars, and have not been inflated for the 2009 dollars used in
the fiscal impact analysis. Thus the estimate of sales tax generation may be conservative.
51
Property Tax Revenues. Basic property taxes are equal to one percent of total assessed value."
Since the project site is located within the Petaluma Community Development (PCD) area, the
redevelopment agency receives the majority of the property tax increment from increased
assessed value. However, according to the City's redevelopment consultant, Seifel Consulting,
the City will receive some portion of the tax increment. Starting in FY 09/10, other taxing
entities will receive a statutory pass through equal to 20 percent of the property tax increment, to
be allocated in proportion to each entity's share of the basic property tax.y Since the City of
Petaluma General Fund's Pre-ERAF allocation is 13.55 percent, the City will receive 13.55
percent of the 20 percent allocated to other taxing entities." As redevelopment allocation
agreements were written before ERAF legislation, and the redevelopment agency passes the
increment through to the City, the City's share is based on its pre-ERAF allocation. However, it
should be noted that the State has begun asking redevelopment agencies to contribute to ERAF.31
Should the State amend redevelopment law to require ERAF payments, the City could receive
less property tax revenues than this analysis projects.
Since this property was in a public use prior to its purchase by Regency Centers, the land value is
effectively related to its development as a retail center; as a result, this fiscal analysis includes the
entire property value in its calculation of fiscal impacts. To estimate the value of improvements,
this analysis uses a construction
Table 20: Projected Property Tax Revenues
cost method for determining the
assessed value, with costs provided
by Regency Centers as shown in
Appendix H. Using the current
assessed land value combined with
new development costs as a proxy
for value, the proposed project
would generate approximately
$25,900 in annual property tax
revenues for the City. Table 20
shows the projected property tax
revenues from the proposed
project.
Total Property Tax Revenues $25,875
(a) Assessed value based on construction costs and assessed land
value. Entire land value is used; these parcels were in public use
prior to purchase for development, so all property tax revenue is new.
See Appendix H for details.
(b) Property tax increment goes to redevelopment agency with some
pass through back to City General Fund.
(c) Other taxing entities Include all government entities entitled to a
share of the base property tax If this were not a Redevelopment Area,
excepting those with contractual agreements (see Table 34)-
(d) Based on City's base allocation, 13.55 percent.
Sources: City of Petaluma; Sonoma County Auditor -Controller,
Sonoma County Assessor's Office; Seifel Consulting, BAE, 2008.
xe
Although many properties are assessed taxes greater than one percent of assessed valuation, these
additional taxes are for specific voter -approved purposes and are not available to the General Fund.
Seifel Consulting, 2009.
0
Ibid.
n
Ibid.
52
2099
Property Tax Revenues
Dollars
New Assessed Property Value (a)
$95,478,858
Basic Property Tax as % of Assessed Value (b)
1.0%
Other Taxing Entities Shan: (c)
20.0%
City's Share of Increment (d)
13.55%
Total Property Tax Revenues $25,875
(a) Assessed value based on construction costs and assessed land
value. Entire land value is used; these parcels were in public use
prior to purchase for development, so all property tax revenue is new.
See Appendix H for details.
(b) Property tax increment goes to redevelopment agency with some
pass through back to City General Fund.
(c) Other taxing entities Include all government entities entitled to a
share of the base property tax If this were not a Redevelopment Area,
excepting those with contractual agreements (see Table 34)-
(d) Based on City's base allocation, 13.55 percent.
Sources: City of Petaluma; Sonoma County Auditor -Controller,
Sonoma County Assessor's Office; Seifel Consulting, BAE, 2008.
xe
Although many properties are assessed taxes greater than one percent of assessed valuation, these
additional taxes are for specific voter -approved purposes and are not available to the General Fund.
Seifel Consulting, 2009.
0
Ibid.
n
Ibid.
52
Property Transfer Tax Revenues. When a property changes ownership, the City collects
property transfer taxes. These taxes total $3.10 per $1,000 of assessed value, of which the City
collects $2.00. The County collects the remaining $1.10. This analysis assumes that commercial
property changes ownership every 20 years, or turns over at an annual rate of five percent. Thus,
the City can anticipate annual property transfer tax revenues of approximately $9,500, as shown
in Table 21. It should be noted that these revenues could vary significantly on an annual basis,
depending on which project components are sold in a given year. It may also be the case that the
entire project remains under one owner, with transfer tax revenues only occurring rarely as the
entire parcel is transferred to a new owner.
Table 21: Proiected Property Transfer Tax Revenues
Development Summary
Square Feet
Apparel Stores
20,000
General Merchandise Stores
138,851
Food Stores
10,800
Eating and Drinking Places
8,300
Home Furnishings and Appliances
39,000
Other Retail
145,000
Office
16,000
Amount of Assessed Value subject to Turnover (b) $4,773,943
Transfer Tax Rate (c) $2.00
Net Increase to City Property Transfer Tax Revenues $9,548
(a) Shows the amount of assessed value subject to turnover in a given year
(b) Assumes that one twentieth of commercial spaces turnover per year.
(c) The property transfer tax rale is $3.10 per $1,000 in value, $2.00 of which
goes to the City, while $1.10 goes to the County.
Sources: City of Petaluma; Sonoma County Auditor -Controller, Sonoma County
Assessor's Office; BAE, 2008.
Property Tax In -Lieu of VLF Revenues. Beginning in the 2005-2006 fiscal year, the State
ceased to provide backfill funds to counties and cities in the form of Motor Vehicle In -Lieu Fees
(VLF) as they had through the 04-05 fiscal year. As a result of complicated financial
restructuring enacted as part of the State's budget balancing process, counties and cities now
receive revenues from the State in the form of what is known as property tax in -lieu of vehicle
license fees, or ILVLF. This State -funded revenue source is tied to a city's total assessed
valuation. In 2005-06, former vehicle license fee revenues were swapped for ILVLF revenues,
which set the local jurisdiction's ILVLF "base." The base increases each year thereafter
proportionate to the increase in total assessed valuation within the jurisdiction. Thus, if total
53
2009
Property Transfer Tax Revenues
Dollars
New Assessed Value
$95,478,856
Annual Commercial Turnover Rate (a)
5%
Amount of Assessed Value subject to Turnover (b) $4,773,943
Transfer Tax Rate (c) $2.00
Net Increase to City Property Transfer Tax Revenues $9,548
(a) Shows the amount of assessed value subject to turnover in a given year
(b) Assumes that one twentieth of commercial spaces turnover per year.
(c) The property transfer tax rale is $3.10 per $1,000 in value, $2.00 of which
goes to the City, while $1.10 goes to the County.
Sources: City of Petaluma; Sonoma County Auditor -Controller, Sonoma County
Assessor's Office; BAE, 2008.
Property Tax In -Lieu of VLF Revenues. Beginning in the 2005-2006 fiscal year, the State
ceased to provide backfill funds to counties and cities in the form of Motor Vehicle In -Lieu Fees
(VLF) as they had through the 04-05 fiscal year. As a result of complicated financial
restructuring enacted as part of the State's budget balancing process, counties and cities now
receive revenues from the State in the form of what is known as property tax in -lieu of vehicle
license fees, or ILVLF. This State -funded revenue source is tied to a city's total assessed
valuation. In 2005-06, former vehicle license fee revenues were swapped for ILVLF revenues,
which set the local jurisdiction's ILVLF "base." The base increases each year thereafter
proportionate to the increase in total assessed valuation within the jurisdiction. Thus, if total
53
assessed valuation increases by ten percent from one year to the next, the ILVLF base would
increase by ten percent.
In order to calculate the increment in ILVLF revenues that would result from the development of
the proposed project, the analysis first determines the total assessed value within the City, and the
City's current year ILVLF revenues. The analysis then determines the percentage by which the
project would increase the City's assessed valuation and applies that percentage increase to the
current year's ILVLF revenues in order to determine the incremental amount of ILVLF
attributable to the new development.
The improvements from the proposed project would generate a 1.28 percent increase the City's
total assessed value, resulting in project -generated ILVLF revenues of approximately $51,011. I1
should be noted that the State could modify these revenue calculations between the current year
and buildout. Table 12 shows the projected ILVLF revenues from the proposed project based on
the current allocation formula.
Table 22: Projected Property Tax In -Lieu of VLF (ILVLF) Revenues
Development Summary
Square Feet
Apparel Stores
20,000
General Merchandise Stores
138,851
Food Stores
10,800
Eating and Drinking Places
8,300
Home Furnishings and Appliances
39,000
Other Retail
145,000
Office
16,000
Net Increase to City ILVLF Revenues $51,011
Sources: City of Petaluma; Sonoma County Auditor -Controller, Sonoma County
Assessor's Office; BAE, 2008.
54
2009
ILVLF Revenues
Dollars
New Assessed Value
$95,478,856
2008/09 Total Citywide Assessed Value
$7,486,941,460
Percent Change in Total AV resulting from Development
1.28%
2008 ILVLF Revenues
$4,000,000
Percent Increase from New Development
1.28%
Net Increase to City ILVLF Revenues $51,011
Sources: City of Petaluma; Sonoma County Auditor -Controller, Sonoma County
Assessor's Office; BAE, 2008.
54
Franchise Fee Revenues. The City collects franchise fees on its public utility usage. This
analysis assumes that the proposed project would use garbage, cable, and gas and electric services
provided within the City. In total, the City collects $2.4 million in franchise fees, which
translates into approximately $32 per service population. As the proposed project would generate
a 360 -person net service population increase, the City can expect to generate approximately
$11,500 in additional franchise fees. Table 23 shows the projected annual franchise fee revenues
from the proposed project.
Table 23: Projected Franchise Fee Revenues
License, Permits, and Fees Revenues. The City collects revenues on licenses, permits, and fees.
The City budget projects that in Fiscal Year 08/09, the City will collect approximately $580,000
in license, permits, and fee revenues, which translates into approximately eight dollars per service
population. As the proposed project would generate a 360 -person net service population increase,
the City can expect to generate approximately $2,800 in additional license, permits, and fees
revenues. Table 24 shows the projected annual license, permits, and fees revenues from the
proposed project.
Fines, Forfeitures, and Penalties Revenues. The City collects revenues on fines, forfeitures,
and penalties. The City budget projects that in Fiscal Year 08/09, the City will collect
approximately $603,000 in fines, forfeitures, and penalties revenues, which translates into
approximately eight dollars per service population. As the proposed project would generate a
360 -person net service population increase, the City can expect to generate approximately $2,900
in additional fines, forfeitures, and penalties revenues. Table 25 shows the projected annual fines,
forfeitures, and penalties revenues from the proposed project.
55
2009
FY 08109 Budget Revenues
Dollars
Waste
$1,200,000
Cable
$750,000
Electric/Gas
$440,000
Total Franchise Fee Revenues
$2,390,000
Total Service Population (a)
74,974
Resident Population
58,925
Employment
32,097
Total Franchise Fee Revenues Per Service Population
$31.88
New Franchise Fee Revenues Associated with New Development
Net New Employment
721
Net New Service Population
360
Revenue Per Service Population
$31.88
(Total New Franchise Fee Revenues Associated with New Development
$11,489
Service Population estimated based on ABAG estimates. Service population
equals the
I(a)
resident population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08/09 Budget; BAE, 2008.
License, Permits, and Fees Revenues. The City collects revenues on licenses, permits, and fees.
The City budget projects that in Fiscal Year 08/09, the City will collect approximately $580,000
in license, permits, and fee revenues, which translates into approximately eight dollars per service
population. As the proposed project would generate a 360 -person net service population increase,
the City can expect to generate approximately $2,800 in additional license, permits, and fees
revenues. Table 24 shows the projected annual license, permits, and fees revenues from the
proposed project.
Fines, Forfeitures, and Penalties Revenues. The City collects revenues on fines, forfeitures,
and penalties. The City budget projects that in Fiscal Year 08/09, the City will collect
approximately $603,000 in fines, forfeitures, and penalties revenues, which translates into
approximately eight dollars per service population. As the proposed project would generate a
360 -person net service population increase, the City can expect to generate approximately $2,900
in additional fines, forfeitures, and penalties revenues. Table 25 shows the projected annual fines,
forfeitures, and penalties revenues from the proposed project.
55
Table 24: Projected Licenses, Permits, and Fees Revenues
Total New Licenses, Permits, and Fees Revenues Associated with New Development $2,788
(a) Service Population estimated based on ABAG estimates. Service population equals the resident
population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08109 Budqet; BAE, 2008.
Table 25: Projected Fines, Forfeitures, and Penalties Revenues
2009
FY 08109 Budget Revenues
Dollars
Total Licenses, Permits, and Fees Revenues
$580,000
Total Service Population (a)
74,974
Resident Population
58,925
Employment
32,097
(Total Licenses, Permits, and Fees Revenues Per Service Population
$7.74
New Licenses, Permits, and Fees Revenues Associated with New Development
Net New Employment
721
Net New Service Population
360
Revenue Per Service Population
$7.74
Total New Licenses, Permits, and Fees Revenues Associated with New Development $2,788
(a) Service Population estimated based on ABAG estimates. Service population equals the resident
population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08109 Budqet; BAE, 2008.
Table 25: Projected Fines, Forfeitures, and Penalties Revenues
Total Fines, Forfeitures, and Penalties Revenues Per Service Population $8.04
New Fines, Forfeitures, and Penalties Revenues Associated with New Development
Net New Employment 721
Net New Service Population 360
Revenue Per Service Population $8.04
(Total New Fines, Forfeitures, and Penalties Revenues Associated with New Development $2,899
(a) Service Population estimated based on ABAG estimates. Service population equals the resident
population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08109 Budget; BAE, 2008.
W
2009
FY 08109 Budget Revenues
Dollars
Total Fines, Forfeitures, and Penalties Revenues
$603,000
Total Service Population (a)
74,974
Resident Population
58,925
Employment
32,097
Total Fines, Forfeitures, and Penalties Revenues Per Service Population $8.04
New Fines, Forfeitures, and Penalties Revenues Associated with New Development
Net New Employment 721
Net New Service Population 360
Revenue Per Service Population $8.04
(Total New Fines, Forfeitures, and Penalties Revenues Associated with New Development $2,899
(a) Service Population estimated based on ABAG estimates. Service population equals the resident
population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08109 Budget; BAE, 2008.
W
Business License Revenues. The proposed expansion would increase the business license fee
revenues for the City of Petaluma. Currently, all relevant business types that would be present in
the projected development pay between 0.016 percent and 0.048 percent of total gross receipts, or
a maximum $45 for annual license renewals. This analysis assumes that all of the businesses
within the proposed project would pay $45 per year for business licenses totaling $1,000 in
annual City revenues. Table 26 shows the projected annual business license fee revenues from
the proposed project.
Table 26: Projected Business License Revenues
2009
Business License Revenues
Dollars
(Annual Business License Revenues per New or Existing Business
$45.00
New Business License Revenues Associated with New Development
Number of New Businesses
22
Revenue Per Business
$45.00
(Total New Business License Revenues Associated with New Development
$990
I Sources: City of Petaluma; BAE, 2008
Transient Occupancy Tax Revenues. Since the proposed project does not include a hotel, or
additional residential units, the City should not anticipate additional transient occupancy tax
(TOT) revenues associated with the new development.
Projected General Fund Costs
This portion of the analysis estimates the costs for the City of Petaluma to extend ongoing
services to the proposed project site. This analysis focuses on the impacts to the City General
Fund, that is, the City's primary discretionary fund, which pays for key public services.
Following are the costs analyzed within this report.
Police Services. The Police department in Petaluma provides protective services to all City
residents and workers. In total, the City spends approximately $16.1 million of discretionary
funds on police services annually, which translates into approximately $214 per service
population. Since the proposed project would generate a 360 -person net service population
increase, the proposed project would generate an increase of approximately $77,200 annually in
police services.
In reviewing this finding, it is important to note that, according to Captain Dave Sears of the City
of Petaluma Police Department, the proposed project would probably not likely lead to a
significant increase in service demand for police. There would likely be additional traffic and
shoplifting calls, but these calls should have a minimal impact on service demand. The Captain
indicated that new residential units generate significantly higher service demand than commercial
uses. Since this project does not contain a residential component, the estimate for new service
57
demand associated with the proposed project may overstate the actual costs of service provision.
Table 27 shows the projected police costs associated with the proposed project.
Table 27: Projected Police Costs
Total Police Department Expenditures Associated with New Development $77,235
(a) Service Population estimated based on ABAG estimates. Service population equals the resident
population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08/09 Budqet; BAE, 2008.
Fire Services. The Fire Department in Petaluma provides fire protection services to all City
residents, and dispatch services for all EMS calls within the City. In total, the City spends
approximately $7.8 million of discretionary funds on fire services annually, which translates into
approximately $104 per service population. As the proposed project would generate a 360 -person
net service population increase, it would also result in an increase of approximately $37,400
annually in fire services.
According to Chief Larry Anderson of the City of Petaluma Fire Department, the proposed
project would not likely lead to a significant increase in service demand for the Fire Department,
as the project is replacing a school and constitutes infill development. Table 28 shows the
projected fire costs associated with the proposed project.
58
2009
FY 08109 Budget Expenditures
Dollars
Administration
$1,651,450
Communications
$1,308,700
CAD/RMS
$379,750
Come Prevention
$438,800
Investigation
$1,072,650
Patrol
$9,060,850
Auto Theft
$143,300
Traffic Safety
$1,124,500
Parking Enforcement
$298,450
Records
$588,650
Total Police Department Expenditures
$16,057,100
Total Service Population (a)
74,974
Resident Population
58,925
Employment
32,097
Total Police Department Expenditures Per Service Population
$214.30
New Police Department Expenditures Associated with New Development
Net New Employment
721
Net New Service Population
360
Revenue Per Service Population
$214.30
Total Police Department Expenditures Associated with New Development $77,235
(a) Service Population estimated based on ABAG estimates. Service population equals the resident
population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08/09 Budqet; BAE, 2008.
Fire Services. The Fire Department in Petaluma provides fire protection services to all City
residents, and dispatch services for all EMS calls within the City. In total, the City spends
approximately $7.8 million of discretionary funds on fire services annually, which translates into
approximately $104 per service population. As the proposed project would generate a 360 -person
net service population increase, it would also result in an increase of approximately $37,400
annually in fire services.
According to Chief Larry Anderson of the City of Petaluma Fire Department, the proposed
project would not likely lead to a significant increase in service demand for the Fire Department,
as the project is replacing a school and constitutes infill development. Table 28 shows the
projected fire costs associated with the proposed project.
58
JTable 28: Projected Fire Costs
Total Fire Department Expenditures Associated with New Development $37,407
(a) Service Population estimated based on ABAG estimates. Service population equals the resident
population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08109 Budget; BAE, 2008.
Public Works. The Public Works Department provides engineering, traffic, and maintenance to
public infrastructure within the City. Currently, the City spends approximately $4.3 million
annually on Public Works services, or approximately $57 per service population. With the
addition of 360 net new service population persons, the proposed project would generate
approximately $20,500 in costs to the City annually. Table 29 shows the projected Public Works
Department costs associated with the proposed project.
59
2009
FY 08109 Budget Expenditures
Dollars
Administration
$569,750
Disaster Preparedness
$5,650
Hazardous Materials
$138,850
Prevention
$306,250
Suppression
$6,529,900
Suppression - Apparatus
$105,550
Suppression - Building/Grounds
$28,450
Suppression - Communications
$2,000
Suppression - Supplies
$56,750
Suppression - Training
$37,650
Total Fire Department Expenditures
$7,781,800
Total Service Population (a)
74,974
Resident Population
58,925
Employment
32,097
(Total Fire Department Expenditures Per Service Population
$103.79
New Fire Department Expenditures Associated with New Development
Net New Employment
721
Net New Service Population
360
Revenue Per Service Population
$103.79
Total Fire Department Expenditures Associated with New Development $37,407
(a) Service Population estimated based on ABAG estimates. Service population equals the resident
population plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08109 Budget; BAE, 2008.
Public Works. The Public Works Department provides engineering, traffic, and maintenance to
public infrastructure within the City. Currently, the City spends approximately $4.3 million
annually on Public Works services, or approximately $57 per service population. With the
addition of 360 net new service population persons, the proposed project would generate
approximately $20,500 in costs to the City annually. Table 29 shows the projected Public Works
Department costs associated with the proposed project.
59
Table 29: Projected Public Works Expenditures
2009
FY 06109 Budget Expenditures
Dollars
Total Public Works Expenditures (a)
$4,259,700
Total Service Population (b)
74,974
Resident Population
58,925
Employment
32,097
Total Public Warks Expenditures Per Service Population
$66.62
New Public Works Expenditures Associated with New Development
Net New Employment
721
Net New Service Population
360
Revenue Per Service Population
$56.82
Total Public Works Expenditures Associated with New Development
$20,477
(a) Does not include CIP expenditures.
(b) Service Population estimated based on ABAG estimates. Service population equals the
resident population
plus one-half the employment population.
Sources: ABAG; City of Petaluma FY 08109 Budget; BAE, 2008.
Community Development Department. The Community Development Department for the City
of Petaluma is responsible for providing planning and building services for the City. Currently,
the City spends approximately $370,100 annually on these services, or approximately five dollars
per service population. With the addition of 360 net new service population persons from
development, the proposed project would generate approximately $1,800 in costs to the City
annually. Table 30 shows the projected costs to the Community Development Department
associated with the proposed project.
.t
Table 30: Projected Community Development Expenditures
2009
FY 08109 Budget Expenditures
Dollars
Community Development Expenditures
$370,100
(Total
Total Service Population (a)
74,974
Resident Population
58,925
Employment
32,097
Total Community Development Expenditures Per Service Population
$4.94
New Community Development Expenditures Associated with New Development
Net New Employment
721
Net New Service Population
360
Revenue Per Service Population
$4.94
Total Community Development Expenditures Associated with New Development
$1,779
service Population estimated based on ABAG estimates. service population equals the resident population
((a)
plus one-half the employment papulation.
Sources: ABAG; City of Petaluma FY 08/09 Budget; BAE, 2008.
General Government. General Government refers to the administrative functions of the City,
including the City Clerk, City Manager, City Attorney, Administrative Services, Finance, and
Non -Departmental functions. This analysis assumes that as non -general government functions
increase within the City, General Government functions would increase proportionately. In this
case, the General Government functions account for approximately 6.5 percent of all General
Fund expenditures. Thus, a $100,000 increase in other City services would result in a $6,500
increase in General Government services. Table 31 shows the General Government expenditures
as a percentage of non -General Government expenditures, and shows that given the estimated
costs of non -General Government functions from the increased service population, General
Government costs would be approximately $9,000 annually.
Parks and Recreation and Animal Services. Although the City of Petaluma provides park and
recreation and animal services to the city, these services are almost solely used by residents.
Since the proposed project does not include any new residential development, the City should not
anticipate additional service costs resulting from the proposed project.
61
Table 31: Projected General Government Expenditures
Total Non -General Government General Fund Expenditures $36,802,800
Total General Government Expenditures as a Share of Non -General Government Expenditures 6.5
New General Government Expenditures Associated with New Development (b) $8,953
(a) Does not Include elections expenditures, as the proposed project does not include new residential units.
(b) Based on seven percent of non-governmental expenditures (police, fire, public works, and community development)
associated with the proposed project.
Sources: ABAG; City of Petaluma FY 08109 Budget; SAE, 2008.
Projected Net Fiscal General Fund
Balance
As shown in Table 32, this analysis
estimates that the proposed project
generates a net fiscal surplus of
approximately $1.0 million annually to
the City of Petaluma General Fund,
owing largely to the sales taxes
generated. This surplus represents 2.8
percent of the City's General Fund
budget, indicating that the proposed
project would have a relatively
significant positive impact on the City's
overall fiscal position.
Table 32: Net Fiscal Impact of Proposed Project
2009
FY O8I09 Budget Expenditures
Dollars
City Council
$147,400
City Attorney
$399,850
City Clerk (a)
$234,700
Finance
$1,283,800
Human Resources
$341,100
Total General Government Expenditures
$2,406,850
Total Non -General Government General Fund Expenditures $36,802,800
Total General Government Expenditures as a Share of Non -General Government Expenditures 6.5
New General Government Expenditures Associated with New Development (b) $8,953
(a) Does not Include elections expenditures, as the proposed project does not include new residential units.
(b) Based on seven percent of non-governmental expenditures (police, fire, public works, and community development)
associated with the proposed project.
Sources: ABAG; City of Petaluma FY 08109 Budget; SAE, 2008.
Projected Net Fiscal General Fund
Balance
As shown in Table 32, this analysis
estimates that the proposed project
generates a net fiscal surplus of
approximately $1.0 million annually to
the City of Petaluma General Fund,
owing largely to the sales taxes
generated. This surplus represents 2.8
percent of the City's General Fund
budget, indicating that the proposed
project would have a relatively
significant positive impact on the City's
overall fiscal position.
Table 32: Net Fiscal Impact of Proposed Project
62
2009
Revenues
Dollars
Sales Tax Revenues
$1,080,336
Property Tax Revenues
$25,875
Property Transfer Tax Revenues
$9,548
ILVLF Revenues
$51,011
Franchise Fee Revenues
$11,489
Licenses, Permits, and Fees Revenues
$2,788
Fines, Forfeitures, and Penalties Revenues
$2,899
Business License Revenues
$990
SUBTOTAL Revenues
$1,184,935
2009
Costs (a)
Dollars
Police
$77,235
Fire
$37,407
Public Works
$20,477
Community Development
$1,779
General Government
$8,953
SUBTOTAL Costs
$145,851
Net Fiscal Impact
$1,039,084
(a) As the development does not include any
new residential
units, the analysis assumes no Increase in costs for the Parks 8.
Recreation and Animal Services Departments,
since workers who
do not live within the City are not likely to use these services.
Source: BAE, 2009.
62
Non -General Fund Revenues and Costs
This chapter of the analysis evaluates the potential impacts to non -General Fund costs and
revenues including development impact fees, other public revenue benefits, and public
contributions.
Development Impact Fees
In addition to providing ongoing municipal services to the new development, the City of
Petaluma may also need to increase its capital facilities, including fire suppression and law
enforcement facilities, in order to maintain current service standards and serve new development.
The City uses development impact fees to fund these improvements.
AB1600 Requirements. The fee per new development must meet the nexus requirements set
forth in AB 1600. AB 1600, adopted in 1987 as the "Mitigation Fee Act," requires that new
development only pay its fair share of capital facility needs. Cities generally update their fees
every few years to keep in compliance with AB 1600 requirements as infrastructure and facility
needs change.
Projected Development Impact Fee Revenues. In May 2008, the City of Petaluma adopted a
series of impact fee mitigation studies that set citywide development impact fees. Table 33 shows
the development impact fees that the City would collect from the proposed East Washington
Place development. Fees are estimated to total approximately $10.5 million.
As AB 1600 requirements limits the amount of development fees a city can charge based on the
nexus between new development and capital facility needs, and the City recently adopted the
current fee structure, the City should not suffer any capital facility shortfalls between need and
fees collected resulting from the proposed development.
63
Table 33: Projected Development Impact Fee Revenues
Traffic (Locally Preferred) (a) Office $15,198 1,000 square feet
Commercial/Shopping $14,723 1,000 square feet
Wastewater (b)
Water Capacity Non -Residential
Any Land Use
Building
Sq. Ft
361,951
16,000
16,000
361,951
361,951
16,000
361,951
16,000
361,951
16,000
361,951
16,000
18
16,000
361,951
16,000
361,951
16,000
361,951
16,000
361,951
16,000
$18,078 1" metertbusiness 21
$45,195 2" meter/business 1
Stone Drain
Commercial
$9,000
Unit of
Fee Type
Land Use Type
Fee
Measurement
Aquatic Center Facilities
Commercial
$62
1,000 square feet
1%
Office
$59
1,00a square feet
Commercial Linkage
Commercial
$2.08
Square Foot
Retail
$3.59
Square Foot
Community Center Facilities
Commercial
$261
1,000 square feet
Office
$249
1,000 square feet
Fire Suppression Facilities
Retail Uses
$144
1,000 square feet
Office Uses
$138
1,000 square feet
Law Enforcement Facilities
Retail
$217
1,000 square feet
Office
$208
t,00a square feet
Library Facilities
Commercial
$111
1,000 square feet
Office
$106
1,000 square feet
Open Space Acquisition
Commercial
$1,127
Unit
Office
$1,a78
1,000 square feet
Park Land Acquisition
Commercial
$608
1,000 square feet
Office
$581
1,000 square feet
Park Land Development
Commercial
$1,041
1,000 square feet
Office
$996
1,000 square feet
Public Facilities
Commercial
$248
1,000 square feet
Office
$237
1,000 square feet
Traffic (Locally Preferred) (a) Office $15,198 1,000 square feet
Commercial/Shopping $14,723 1,000 square feet
Wastewater (b)
Water Capacity Non -Residential
Any Land Use
Building
Sq. Ft
361,951
16,000
16,000
361,951
361,951
16,000
361,951
16,000
361,951
16,000
361,951
16,000
18
16,000
361,951
16,000
361,951
16,000
361,951
16,000
361,951
16,000
$18,078 1" metertbusiness 21
$45,195 2" meter/business 1
Stone Drain
Commercial
$9,000
Acre
33.7
Parking
Commercial
$20,000
space
nfa (c)
Public Art
Commercial
1%
construction budget
$71,665,354
GRAND TOTAL
(a) Provides a mon: conservative estimate.
(b) Estimates from City allow for water conservation credits.
(c) Only applies to projects in the Central Petaluma Specific Plan area.
Sources: City of Petaluma; BAE, 2009.
Other Public Revenue Benefits
Total
Fee
$22,441
$944
$33,280
$1,299,404
$94,469
$3,984
$52,121
$2,208
$78,543
$3,328
$40,177
$1,696
$20,286
$17,248
$220,066
$9,296
$376,791
$15,936
$89,764
$3,792
$5,500,931
$235,568
$914,037
$379,638
$45,195
$303,300
n/a
$716,654
$10,481,097
The City could also anticipate additional benefits from property tax increment accruing to the
Redevelopment Agency or through developer land dedication, exactions, or developer -funded
improvements.
64
Redevelopment Funds. Since the proposed project is located within the Petaluma Community
Development (PCD) Area redevelopment area, the City's redevelopment agency will receive
additional benefits from the property tax increment. According to the City's redevelopment
consultant, Seifel Consulting, the redevelopment agency will keep the largest share of the
property tax increment, which equals one percent of the net new assessed value." The
redevelopment agency then passes a portion of the increment through to other agencies, including
the County for administrative services, the County General Fund and County Library, which set
up contractual pass through agreements with the redevelopment agency, and other taxing entities.
As Table 34 shows, the redevelopment agency retains approximately 49 percent of the total
property tax increment, which amounts to approximately $472,100 annually.
Table 34: Projected Redevelopment Agency Revenues
Total Redevelopment Agency Revenues $472,067
(a) Assessed value based on construction costs and assessed land value. Entire land
value is used; these parcels were in public use prior to purchase for development, so all
property tax revenue is new. See Appendix H for details.
(b) Other taxing entities include all government entities entitled to a share of the base
property tax if this were not a Redevelopment Area, excepting those with contractual
agreements as shown in next item footnote. City share of this 20% is shown in Table 20.
(c) County General Fund and County Library contractually get pass throughs equal to 95
percent of their base allocations (28.6 and 1.9 percent respectively).
Sources: City of Petaluma; Sonoma County Auditor -Controller, Sonoma County
Assessor's Office; Regency Centers; Seifel Consulting; BAE, 2008.
Developer Contributions. As part of the development agreement, if the development moves
forward, the developer will improve and dedicate Kenilworth Drive to the City. However, as the
amount of land dedicated and types of improvements have not yet been specified, it is not yet
possible to estimate the additional City benefits. Currently, these are the only planned developer
contributions. However, the City has also requested that the developer to dedicate an acre for
interchange improvements, the value of which would be approximately $1 million.33
32 Since this property was in a public use prior to the beginning of the development process, all of the
property value is associated with the tax increment, with the baseline value assumed at zero.
n
City of Petaluma staff
65
2009
Redevelopment Agency Revenues
Dollars
Property Tax Increment
New Assessed Property Value (a)
$95,478,856
Basic Property Tax as a Percentage of Assessed Value
1.0%
Total Property Tax Increment
$954,789
Less: County Admin Share
1.278%
Less: Other Taxing Entities Share, Statutory Pass Throughs (b)
20.000%
Less: Contractual Pass Throughs (c)
29280%
Redevelopment Agency's Share of Property Tax Increment
49,442%
Total Redevelopment Agency Revenues $472,067
(a) Assessed value based on construction costs and assessed land value. Entire land
value is used; these parcels were in public use prior to purchase for development, so all
property tax revenue is new. See Appendix H for details.
(b) Other taxing entities include all government entities entitled to a share of the base
property tax if this were not a Redevelopment Area, excepting those with contractual
agreements as shown in next item footnote. City share of this 20% is shown in Table 20.
(c) County General Fund and County Library contractually get pass throughs equal to 95
percent of their base allocations (28.6 and 1.9 percent respectively).
Sources: City of Petaluma; Sonoma County Auditor -Controller, Sonoma County
Assessor's Office; Regency Centers; Seifel Consulting; BAE, 2008.
Developer Contributions. As part of the development agreement, if the development moves
forward, the developer will improve and dedicate Kenilworth Drive to the City. However, as the
amount of land dedicated and types of improvements have not yet been specified, it is not yet
possible to estimate the additional City benefits. Currently, these are the only planned developer
contributions. However, the City has also requested that the developer to dedicate an acre for
interchange improvements, the value of which would be approximately $1 million.33
32 Since this property was in a public use prior to the beginning of the development process, all of the
property value is associated with the tax increment, with the baseline value assumed at zero.
n
City of Petaluma staff
65
Public Contributions to Proposed Project
Finally, this analysis examines the cost to the City of public contributions. Such contributions
could include land write downs, tax rebates or refunds, below market or contingent loans, site
acquisition or preparation costs, fee waivers or payments, and unfunded infrastructure and public
improvement costs. According to Community Development Director Mike Moore, the City is not
planning to extend any of these payments to the East Washington Place development. Thus, no
public contribution costs should accrue to the City.
Summary of Non -General Fund Revenues and Costs
The City's development impact fees have been recently updated, so the fees of approximately
$10.4 million should cover infrastructure and other one-time public costs associated with the
Proposed Project. The Petaluma Community Development Commission should also benefit
greatly from the tax increment, since the project is in the Petaluma Community Development
Area; the project is projected to generate approximately $472,100 in annual tax increment based
on current allocation formulas. The City will also benefit from the developer's plans to improve
and dedicate Kenilworth Drive to the City. Currently, the City has no plans to make any public
contributions such as land write-downs, tax rebates or refunds, below-market or contingent loans
to the project, or to pay for any other costs associated with the development of the project.
Appendices
67
Appendix A: Trade Area Census Tracts
County
Tract
Sonoma
1501
Sonoma
1502.01
Sonoma
1502.02
Sonoma
1503.02
Sonoma
1503.03
Sonoma
1503.04
Sonoma
1506.01
Sonoma
1506.02
Sonoma
1506.03
Sonoma
1506.05
Sonoma
1506.06
Sonoma
1507.01
Sonoma
1507.02
Sonoma
1506
Sonoma
1509.01
Sonoma
1509.02
Sonoma
1510
M
Appendix B: Unemployment and Labor Force Trends in Civilian Labor Force
Notes: Civilian Labor Farce refers to workers by place of residence. Sum may not equal parts due to independent rounding. Data
represent annual averages of monthly employment data. Uses benchmarks from March 2007.
(a) Preliminary.
Sources: California Employment Development Department; Bay Area Economics, 2008.
Petaluma
Sonoma County
Unem-
Unem-
Labor
Employ-
Unemploy-
ployment
Labor
Employ-
Unemploy.
ployment
Force a
ment
ment
Rate
Force a
ment
ment
Rate
2000
31,200
30,200
1,000
3.0%
253,100
244,600
8,500
3.4%
2001
31,800
30,700
1,100
3.3%
257,900
248,400
9,500
3.7%
2002
31,700
30,300
1,500
4.6%
258,100
244,900
13,100
5.1%
2003
31,300
29,800
1,600
5.0%
254,800
240,900
13,900
5.5%
2004
31,500
30,100
1,400
4.5%
256,100
243,400
12,700
5.0%
2005
31,500
30,200
1,300
4.0%
256,200
244,700
11,400
4.5%
2006
31,800
30,600
1,200
3.6%
258,100
247,800
10,400
4.0%
2007
32,200
31,000
1,300
4.0%
262,000
250,500
11,600
4.4%
November
2008 (a)
33,200
31,300
2,000
5.9%
270,500
252,900
17,500
6.5%
Change, 2000-2007
Number
1,000
800
300
8,900
5,g00
3,100
Percent
3%
3%
30%
4%
2%
36%
Notes: Civilian Labor Farce refers to workers by place of residence. Sum may not equal parts due to independent rounding. Data
represent annual averages of monthly employment data. Uses benchmarks from March 2007.
(a) Preliminary.
Sources: California Employment Development Department; Bay Area Economics, 2008.
Appendix C-1: Petaluma Taxable Retail Sales Trends, 1997 to 2007 (Adjusted for Inflation)
City of Petaluma Sales in 2007 $000 (a) (b)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Apparel Stores
$27,833
$30,055
$28,642
$30,521
$29,826
$28,059
$28,499
$39,092
$47,089
$50,415
$65,163
General Merchandise Stores
$54,344
$60,076
$65,420
$65,632
$67,659
$66,170
$63,365
$59,682
$56,334
$55,087
$51,054
Food Stores
$46,031
$46,166
$48,142
$49,229
$53,825
$56,250
$57,869
$59,309
$59,542
$59,829
$58,100
Eating and Drinking Places
$56,002
$58,862
$62,602
$66,977
$70,635
$71,186
$73,529
$74,528
$76,872
$80,498
$84,6B7
Home Furnishings and Appliances
$17,251
$10,294
$18,365
$20,956
$16,070
$19,510
$18,053
$17,220
$17,664
$16,457
$13,324
Building Materials and Farm Implements
$34,198
$35,063
$36,880
$43,042
$37,517
$40,076
$41,509
$44,843
$45,000
$40,326
$46,226
Auto Dealers and Auto Supplies
$161,112
$197,818
$253,726
$293,227
$304,741
$317,920
$327,462
$329,118
$322,471
$302,244
$268,358
Service Stations
$46,288
$42,459
$51,889
$62,082
$60,320
$52,156
$56,385
$65,233
$67,967
$81,019
$87,978
Other Retail Stores
$62,493
$67,684
$81,254
$91,448
$89,690
$91,445
$92,112
$100,600
$100,964
$98,521
$83,053
Retail Stores Total
$505,551
$556,477
$647,132
$723,115
$732,284
$742,775
$758,803
$789,623
$794,004
$784,398
$757,943
East Washington Place Retail Types (c)
$263,953
$281,137
$304,627
$324,763
$329,706
$332,620
$333,446
$360,429
$368,566
$360,807
$355,381
Petaluma Sales per Capita in 2007 $ (d)
1997
1998
1999
2000
2001
2002
2003
2004
2006
2006
2007
Apparel Stores
$558
$588
$550
$580
$538
$503
$511
$697
$838
$893
$1,148
General Merchandise Stores
$1,0a9
$1,176
$1,247
$1,203
$1,221
$1,187
$1,135
$1,065
$1,000
$976
$900
Food Stores
$922
$903
$918
$902
$971
$1,009
$1,037
$1,058
$1,059
$1,060
$1,024
Eating and Drinking Places
$1,122
$1,152
$1,194
$1,226
$1,274
$1,277
$1,318
$1,329
$1,365
$1,426
$1,492
Home Furnishings and Appliances
$346
$350
$350
$384
$326
$350
$323
$307
$314
$291
$235
Building Materials and Farm Implements
$605
$686
$703
$789
$677
$719
$744
$000
$799
$714
$615
Auto Dealers and Auto Supplies
$3,228
$3,871
$4,638
$5,375
$5,497
$5,705
$5,850
$5,071
$5,724
$5,354
$4,729
Service Stations
$927
$831
$990
$1,138
$1,088
$936
$1,010
$1,164
$1,206
$1,435
$1,550
Other Retail Stores
$1,252
$1,324
$1,549
$1,676
$1,618
$1,641
$1,651
$1,795
$1,792
$1,745
$1,464
Retail Stores Total
$10,130
$10,890
$12,340
$13,256
$13,210
$13,328
$13,598
$14,086
$14,094
$13,894
$13,357
East Washington Place Retail Types (c)
$5,289
$5,501
$5,809
$5,953
$5,948
$5,968
$5,975
$6,251
$6,366
$6,391
$6,263
Population
49,907
51,102
52,443
64,660
65,435
65,730
55,804
56,057
66,337
66,455
66,743
(a) Retail sales have been adjusted to 2007 dollars
based on the Taxable Sales Deflators
calculated
by the Slate
Board of Equalization (BOE).
(b) Analysis excludes all non�relail outlets (business and personal services) reporting taxable sales.
(c) Excludes Building Materials, Auto, and Service
Station categories,
(d) Per capita sales calculated based on Slate Board
of Equalization reported sales
and annual Department of Finance
population
estimates benchmarked
to the decennial Census.
Sources: State Board of Equalization; 2000 u.s. Census; Slate Department of Finance; Bay Area Economics, 2008
70
Appendix C-2: Sonoma City Taxable Retail Sales Trends, 1997 to 2007 (Adjusted for Inflation)
City of Sonoma Sales In 2007 $000 (a) (b) (c)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Apparel Stores
$5,421
$5,198
$6,270
$7,354
$7,552
$8,343
$7,508
$7,476
$7,633
$7,667
$8,612
General Merchandise Stores (c)
$17,167
$17,534
$18,009
$17,530
$18,799
$18,952
$17,599
$17,589
$17,059
$17,072
$18,049
Food Stores
$21,983
$23,472
$24,195
$24,621
$26,413
$27,523
$27,192
$27,336
$27,110
$26,546
$29,835
Ealing and Drinking Places
$27,022
$30,202
$31,300
$34,269
$36,859
$38,091
$40,709
$41,830
$43,807
$42,100
$41,311
Home Furnishings and Appliances
$3,491
$4,773
$4,654
$6,290
$6,458
$5,200
$4,584
$4,493
$5,208
$5,669
$6,174
Building Materials and Farm Implements (c)
$15,681
$15,699
$17,302
$17,445
$17,390
$17,875
#
#
#
#
#
Auto Dealers and Auto Supplies
$20,799
$22,562
$26,264
$24,613
$28,261
$28,399
$26,289
$25,096
$20,831
$17,657
$22,954
Service Stations
$9,820
$9,611
$13,782
$17,577
$16,944
$15,124
$16,380
$19,381
$19,653
$20,598
$20,844
Other Retail Stores
$15,284
$15,986
$17,275
$18,535
$20,306
$20,179
$38,317
$40,730
$42,639
$43,621
$39,292
Retail Stores Total
$136,667
$145,038
$169,069
$168,234
$179,282
$179,717
$178,680
$183,930
$183,940
$180,929
$187,071
Sonoma Sales per Capita In 2007 $ (c) (d)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Apparel Stores
$611
$575
$68B
$793
$827
$Bei
$7B5
$770
$780
$779
$870
General Merchandise Stores (c)
$1,936
$1,939
$1,975
$1,890
$1,979
$2,004
$1,039
$1,811
$1,744
$1,734
$1,823
Food Stores
$2,479
$2,595
$2,654
$2,655
$2,781
$2,905
$2,842
$2,814
$2,771
$2,697
$3,014
Ealing and Drinking Places
$3,046
$3,339
$3,433
$3,695
$3,881
$4,021
$4,254
$4,306
$4,478
$4,277
$4,174
Home Furnishings and Appliances
$394
$528
$510
$678
$680
$549
$479
$463
$532
$576
$624
Building Materials and Farm Implements (c)
$1,768
$1,736
$1,890
$1,881
$1,831
$1,8137
#
#
#
#
#
Auto Dealers and Auto Supplies
$2,346
$2,495
$2,883
$2,654
$2,975
$2,998
$2,747
$2,583
$2,129
$1,794
$2,319
Service Stations
$1,107
$1,063
$1,511
$1,a95
$1,784
$1,596
$1,712
$1,995
$2,009
$2,092
$2,106
Other Retail Stores
$1,724
$1,768
$1,695
$1,998
$2,138
$2,130
$4,004
$4,193
$4,359
$4,431
$3,970
Retail Stores Total (b)
$15,413
$16,037
$17,446
$18,138
$18,876
$18,969
$18,662
$18,936
$18,802
$18,380
$18,900
PopulaOon
8,067
9,044
9,110
9,276
9,498
9,474
9,569
9,714
9,783
9,544
9,898
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Deflators calculated by the State Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) reporting taxable sales,
(c) A"#" sign indicates data supressed to preserve confidentiality due to four or fewer outlets or sales of more than e0% of the category in one store. Suppressed sales have been combined with Other Retall Stores,
so evaluation of changes in the Other Retail category should take this into consideration.
(d) Per capita sales calculated based on State Board of Equalization reported sales and annual Department of Finance population estimates benchmarked to the decennial Census.
Sources: State Board of Equalization; 2000 U.S. Census; State Department of Finance; Bay Area Economics, 2008.
71
Appendix C-3: Novato Taxable Retail Sales Trends, 1997 to 2007 (Adjusted for Inflation)
City of Novato Sales in 2007 $000 (a) (b) (c)
1997
1998
1999
2000
2001
2002
2003
2004
2006
2006
2007
Apparel Stares
$21,846
$19,787
$19,161
$23,304
$23,658
$22,420
$22,655
$23,326
$22,256
$25,972
$26,615
General Merchandise Stares
$144,664
$160,014
$170,754
$177,782
$174,263
$175,437
$172,301
$174,775
$175,886
$177,516
$175,419
Food Stores
$28,278
$31,413
$33,605
$33,288
$33,807
$33,734
$32,320
$30,937
$30,882
$32,992
$33,440
Eating and Drinking Places
$47,101
$50,201
$53,313
$57,761
$59,494
$62,251
$62,280
$63,577
$64,549
$65,985
$69,521
Home Furnishings and Appliances
$8,260
$9,297
$10,547
$12,149
$111851
$12,366
$12,110
$12,018
$12,719
$12,353
$12,650
Building Materials and Farm Implements
$17,285
$18,563
$21,697
$22,661
$24,690
$24,678
$24,540
$28,094
$27,345
$26,405
$25,356
Auto Dealers and Auto Supplies
$54,561
$66,681
$73,922
$60,915
$86,412
$92,243
$87,846
$107,664
$106,480
$105,546
$98,845
Service Stations
$32,190
$28,238
$29,445
$31,310
$26,871
$28,465
$33,805
$41,139
$48,970
$62,228
$66,375
Other Retail Stares
$75,915
$96,566
$101,164
$97,977
$93,001
$71,385
$74,315
$83,384
$89,783
$91,692
$87,040
Retail Stores Total
$430,098
$480,760
$613,609
$537,167
$634,045
$522,979
$622,172
$564,916
$678,870
$600,688
$695,461
East Washington Place Retail Types (c)
$326,063
$367,278
$308,644
$402,261
$396,073
$377,693
$375,980
$388,018
$396,076
$406,609
$404,886
Novato Sales per Capita In 2007 $ (d)
1997
1998
1999
2000
2001
2002
2003
2004
2006
2006
2007
Apparel Stores
$486
$434
$415
$489
$490
$460
$465
$471
$441
$509
$50B
General Merchandise Stores
$3,218
$3,509
$3,702
$3,733
$3,606
$3,598
$3,533
$3,529
$3,487
$3,476
$3,326
Food Stores
$629
$689
$729
$699
$700
$692
$663
$625
$612
$646
$634
Eating and Drinking Places
$1,048
$1,101
$1,156
$1,213
$1,231
$1,277
$1,277
$1,284
$1,280
$1,292
$1,318
Home Furnishings and Appliances
$184
$204
$229
$255
$245
$254
$248
$243
$252
$242
$240
Building Materials and Farm Implements
$384
$407
$470
$476
$511
$506
$503
$567
$542
$517
$481
Auto Dealers and Auto Supplies
$1,214
$1,462
$1,603
$1,699
$1,788
$1,892
$1,801
$2,174
$2,111
$2,067
$1,874
Service Stations
$716
$619
$638
$657
$556
$564
$693
$831
$971
$1,219
$1,259
Other Retail Stores
$1,688
$2,118
$2,193
$2,057
$1,925
$1,464
$1,524
$1,683
$1,780
$1,796
$1,650
Retail Stores Total
$9,666
$10,643
$11,136
$11,278
$11,052
$10,726
$10,707
$11,405
$11,475
$11,763
$11,291
East Washington Place Retail Types (c)
$7,262
$8,064
$8,424
$8,446
$8,196
$7,744
$7,709
$7,834
$7,851
$7,960
$7,677
Population
44,960 45,600 46,123 47,610 48,323 48,760 48,769 49,632 60,447 61,066
(a) Retail sales have been adjusted to 2007 dollars based an the Taxable Sales Deflators calculated by the State Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) reporting taxable sales.
(c) Excludes Building Materials, Auto, and Service Station categories.
(d) Per capita sales calculated based an State Board of Equalization reported sales and annual Department of Finance population estimates benchmarked to the decennial Census.
Sources: State Board of Equalization; 2000 U.S. Census; State Department of Finance; Bay Area Economics, 2008,
62,737
72
Appendix C-4: Rohnert Park Taxable Retail Sales Trends, 1997 to 2007 (Adiusted for Inflation)
City of Rohnert Park Sales in 2007 $000 (a) (b) (c)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Apparel Stores
$7,132
$4,052
$8,614
$10,202
$9,952
$11,670
$11,212
#
#
If
#
General Merchandise Stores
$83,655
$94,3116
$93,341
$95,554
$100,136
$125,658
$188,377
$202,731
$211,870
$214,634
$217,032
Food Stores
$28,544
$30,823
$32,622
$33,826
$34,770
$37,413
$38,990
$41,831
$41,709
$41,110
$37,170
Eating and Drinking Places
$41,740
$48,622
$51,185
$54,739
$57,392
$59,606
$64,179
$70,177
$73,606
$74,832
$75,291
Home Furnishings and Appliances
$18,525
$14,331
$28,018
$30,261
$32,782
$55,924
$49,841
$46,774
$41,627
$36,529
$40,211
Building Materials and Farm Implements
$91,691
$89,441
$101,315
$107,416
$108,464
$107,829
$111,215
$122,875
$109,310
$103,094
$76,206
Auto Dealers and Auto Supplies
$15,709
$19,033
$17,115
$24,527
$24,710
$18,793
$21,276
$20,343
$19,018
$19,758
$27,947
Service Stations
$23,698
$22,041
$26,833
$31,893
$30,120
$28,422
$31,039
$30,391
$32,327
$35,132
$38,814
Other Retail Stores
$56,427
$51,131
$46,893
$66,439
$61,296
$59,831
$60,612
$74,193
$61,619
$80,343
$61,219
Retail Stores Total
$357,121
$373,861
$405,937
$454,857
$459,623
$506,146
$576,742
$611,320
$613,089
$607,438
$576,897
East Washington Place Retail Types (d)
$236,023
$243,346
$260,673
$291,021
$296,329
$350,102
$413,212
$437,711
$452,434
$449,454
$432,930
Rohnert Park Sales per Capita In 2007 $ (c) (e)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Apparel Stores
$176
$911
$205
$242
$235
$277
$264
#
#
#
#
General Merchandise Stores
$2,066
$2,285
$2,221
$2,262
$2,369
$2,978
$4,442
$4,798
$5,017
$5,012
$5,074
Food Slants
$705
$746
$776
$801
$823
$867
$919
$990
$988
$960
$869
Eating and Drinking Places
$1,031
$1,177
$1,218
$1,296
$1,358
$1,413
$1,513
$1,661
$1,743
$1,747
$1,760
Home Furnishings and Appliances
$457
$347
$667
$716
$775
$1,325
$1,175
$1,107
$986
$853
$940
Building Materials and Farm Implements
$2,017
$2,165
$2,411
$2,543
$2,566
$2,555
$2,622
$2,908
$2,569
$2,407
$1,782
Auto Dealers and Auto Supplies
$388
$461
$407
$581
$5115
$445
$502
$481
$450
$461
$653
Service Stations
$505
$534
$639
$755
$713
$674
$732
$719
$766
$B20
$907
Other Retail Stores
$1,393
$1,238
$1,116
$1,573
$1,450
$1,418
$1,429
$1,756
$1,933
$1,876
$1,431
Retail Stores Total (b)
$8,819
$9,049
$9,659
$10,769
$10,873
$11,971
$13,599
$14,467
$14,518
$14,185
$13,464
East Washington Place Retail Types (d)
$5,828
$5,890
$6,203
$5,890
$7,010
$8,297
$9,743
$10,359
$10,714
$10,495
$10,122
Population
40,495 41,314 42,026 42,236 42,272 42,198 42,412 42,256 42,229 42,824 42,772
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Deflators calculated by the Slate Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) reporting taxable sales.
(c) A'-" sign indicates data supressed to preserve confidentiality due to four or fewer outlets or sales of more than 80% of the category In one store. Suppressed sales have been combined with Other Retail Stores,
(d) Excludes Building Materials, Auto, and Service Station categories,
(e) Per capita sales calculated based an State Board of Equalization reported sales and annual Department of Finance population estimates benchmarked to the decennial Census.
Sources: State Board of Equalization; 2000 U.S. Census; Slate Department of Finance; Bay Area Economics, 2008.
73
Appendix C-5: Sonoma County Taxable Retail Sales Trends, 1997 to 2007 (Adjusted for Inflation)
Sonoma County Sales in 2007 $000(a)(b)
1997
1998
1999
2000
2001
2002
2003
2004
2006
2006
2007
Apparel Stores
$135,292
$139,357
$144,793
$152,552
$174,696
$179,581
$187,827
$209,478
$231,840
$239,661
$258,991
General Merchandise Stores
$582,220
$655,693
$718,882
$753,903
$777,063
$789,126
$827,183
$841,178
$840,160
$841,011
$845,947
Food Stores
$321,708
$330,763
$348,222
$365,665
$383,476
$390,265
$398,995
$403,279
$406,883
$406,985
$396,064
Eating and Drinking Places
$386,070
$417,957
$441,990
$475,684
$496,558
$507,672
$524,616
$542,924
$565,703
$573,896
$592,801
Home Furnishings and Appliances
$161,053
$176,015
$201,763
$232,059
$227,132
$249,830
$248,690
$251,449
$243,958
$236,820
$222,132
Building Materials and Farm Implements
$432,281
$462,556
$542,477
$580,471
$600,338
$613,612
$635,338
$707,690
$732,541
$732,612
$611,581
Auto Dealers and Auto Supplies
$690,425
$815,006
$968,080
$1,114,306
$1,145,340
$1,146,561
$1,154,591
$1,149,315
$1,115,741
$1,042,66B
$1,033,898
Service Stations
$297,848
$267,108
$312,384
$367,198
$370,082
$338,312
$367,075
$434,860
$479,693
$521,839
$582,426
Other Retail Stores
$044,054
$685,297
$741,903
$842,307
$839,301
$848,897
$859,516
$907,733
$951,305
$944,493
$858,737
Retail Stores Total
$3,652,952
$3,949,753
$4,420,494
$4,894,345
$5,013,986
$5,063,866
$5,223,831
$5,447,907
$5,567,825
$6,540,184
$5,404,597
East Washington Place Retail Types (c)
$2,232,398
$2,406,002
$2,697,554
$2,832,371
$2,698,227
$2,966,372
$3,046,827
$3,166,042
$3,239,850
$3,242,866
$3,176,692
Sonoma County Sales per Capita in 2007 $ (d)
1997
1998
1999
2000
2001
2002
2003
2004
2006
2006
2007
Apparel Stores
$312
$315
$322
$354
$376
$383
$399
$442
$488
$502
$540
General Merchandise Stores
$1,341
$1,4B3
$1,599
$1,644
$1,673
$1,684
$1,757
$1,776
$1,767
$1,763
$1,764
Food Stores
$741
$748
$775
$797
$825
$833
$047
$852
$856
$853
$B30
Ealing and Drinking Places
$894
$946
$983
$1,038
$1,069
$1,084
$1,114
$1,147
$1,190
$1,203
$1,236
Home Furnishings and Appliances
$371
$398
$449
$505
$489
$533
$528
$531
$513
$497
$463
Building Materials and Farm Implements
$996
$1,046
$1,207
$1,266
$1,292
$1,310
$1,349
$1,495
$1,541
$1,536
$1,275
Auto Dealers and Auto Supplies
$1,590
$1,844
$2,154
$2,430
$2,466
$2,447
$2,452
$2,427
$2,347
$2,186
$2,155
Service Stations
$666
$604
$695
$801
$797
$722
$822
$91B
$1,009
$1,094
$1,214
Other Retail Stores
$1,464
$1,550
$1,651
$1,837
$1,807
$1,612
$1,826
$1,917
$2,001
$1,980
$1,790
Retail Stores Total (b)
$8,414
$8,936
$9,835
$10,672
$10,793
$10,809
$11,096
$11,506
$11,710
$11,616
$11,267
East Washington Place Retail Types (d)
$5,142
$5,441
$6,779
$6,176
$6,239
$6,329
$6,471
$6,666
$6,814
$6,799
$6,623
Population
434,133
442,025
449,455
458,614
464,543
468,501
470,829
473,521
475,461
476,956
479,668
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Deflators calculated by the Slate Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) repart ng taxable sales.
(c) Excludes Food, Building Materials, Auto, and Service Station categories.
(d) Per capita sales calculated based an Stale Board of Equalization reported sales and annual Department of Finance population estimates benchmarked to the decennial Census.
Sources: Stale Board of Equalization; 2000 U.S. Census; State Department of Finance; Bay Area Economics, 2008.
74
Appendix C-6: California Taxable Retail Sales Trends, 1997 to 2007 (Adjusted for Inflation)
Califomia Sales In 2007 $000 (a) (b)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Apparel Stores
$12,289,592
$12,706,968
$12,337,931
$13,570,706
$14,159,660
$14,956,350
$16,187,177
$17,804,540
$19,19a,983
$19,972,158
$20,855,a90
General Merchandise Stares
$36,930,695
$42,004,330
$45,614,292
$48,409,654
$49,910,072
$51,691,252
$53,905,842
$56,635,354
$58,264,661
$59,691,512
$59,897,350
Food Stores
$16,972,823
$17,455,065
$18,496,636
$19,408,915
$19,908,166
$20,203,857
$20,695,907
$20,816,646
$21,678,197
$22,021,566
$22,461,059
Eating and Drinking Places
$30,114,227
$32,546,359
$34,948,302
$37,458,301
$38,972,373
$40,596,416
$42,707,771
$45,437,688
$47,620,432
$49,583,796
$51,658,575
Home Furnishings and Appliances
$10,267,178
$11,411,754
$12,896,294
$14,358,213
$14,100,349
$14,907,403
$16,106,674
$17,225,272
$17,841,129
$17,508,584
$16,720,652
Building Materials and Farm Implements
$18,754,496
$20,974,482
$23,961,220
$26,201.904
$27,985,893
$29,929,600
$32,730,879
$38,985,973
$40,689,358
$40,098,124
$32,656,324
Auto Dealers and Auto Supplies
$40,524,458
$45,930,127
$52,827,017
$59,921,922
$64,277,633
$68,038,905
$71,502,347
$74,306,213
$75,516,360
$72,090,047
$70,779,978
Service Stations
$20,590,076
$18,794,027
$21,876,691
$26,628,562
$26,043,887
$25,509,708
$29,554,037
$34,396,92B
$39,569,966
$43,893,427
$47,084,940
Other Retail Stores
$43,109,705
$46,673,805
$52,052,619
$57,272,036
$55,535,499
$55,711,516
$58,079,012
$62,065,076
$65,206,923
$67,008,050
$64,910,134
Retail Stores Total
$231,553,449
$248,496,918
$275,211,003
$303,230,214
$310,893,732
$321,545,008
$341,469,645
$367,676,027
$385,588,035
$391,869,271
$387,027,109
California Sales per Capita In 2007 $ (c)
1997
1998
1999
2000
2001
2002
2903
2004
2905
2006
2007
Apparel Stores
$382
$389
$372
$401
$411
$427
$454
$492
$523
$538
$555
General Merchandise Stares
$1,209
$1,286
$1,382
$1,429
$1,450
$1,474
$1,512
$1,565
$1,589
$1,608
$1,595
Food Stores
$527
$534
$558
$573
$578
$576
$580
$575
$591
$593
$598
Eating and Drinking Places
$935
$997
$1,055
$1,105
$1,132
$1,15B
$1,198
$1,255
$1,298
$1,336
$1,375
Home Furnishings and Appliances
$319
$349
$389
$424
$410
$425
$452
$476
$486
$472
$445
Building Materials and Farm Implements
$582
$642
$723
$774
$813
$854
$918
$1,077
$1,109
$1,080
$869
Auto Dealers and Auto Supplies
$1,258
$1,406
$1,594
$1,769
$1,867
$1,940
$2,006
$2,053
$2,059
$1,942
$1,884
Service Stations
$639
$575
$660
$766
$756
$728
$829
$950
$1,079
$1,183
$1,254
Other Retail Stores
$1,338
$1,429
$1,571
$1,691
$1,613
$1,589
$1,629
$1,715
$1,776
$1,805
$1,728
Retail Stores Total (b)
$7,189
$7,609
$8,304
$8,952
$9,029
$9,170
$9,678
$10,157
$10,514
$10,658
$10,304
Population
32,207,869
32,657,877
33,140,771
33,873,086
34,430,970
35,063,959
35,652,700
36,199,342
36.676,346
37,114,598
37,659,440
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Deflators calculated by the Slate Board of Equalization (BOE).
(b) Analysis excludes all non -retail outlets (business and personal services) reporting taxable sales.
(c) Per capita sales calculated based an Stale Boar of Equalization reported sales and annual Department of Finance population estimates benchmarked to the decennial Census.
Sources: Slate Board of Equalization; 2000 U.S. Census; Stale Department of Finance, Bay Area Economics, 2006.
75
Appendix D: Home Furnishings and Appliances Sales Detail
Sonoma
Sales in 2007 $000 (a) (b) Petaluma Novato Rohnert Park County
Furniture and Home Furnishings $9,854 $25,293 $27,415 $187,367
Electronics and Appliances $17,053 $7,238 $22,263 $210,995
Home Furnishings and Appliances Total $26,907 $32,530 $49,678 $398,362
Sonoma
Sales Per Capita in 2007 $ (a) (b) Petaluma Novato Rohnert Park County
Furniture and Home Furnishings $177 $519 $650 $400
Electronics and Appliances $305 $148 $528 $450
Home Furnishings and Appliances Total $483 $667 $1,177 $850
Population, 2002
55,730 48,760 42,198 468,501
(a) Retail sales have been adjusted to 2007 dollars based on the Taxable Sales Deflators calculated by the
Stale Board of Equalization (BOE).
(b) This table relies on data from the 2002 Census of Retail Trade rather than the CA State Board
of Equalizaflon. Numbers may not exactly match state taxable sales data due to use of different
source data, different classification of individual outlets, and inclusion of non-taxable sales in the
data presented here.
(c) Data not available due to disclosure rules.
Sources: 2002 Census of Retail Trade; State Board of Equalization; Bay Area Economics, 2008
irg
Appendix E: Estimate of Retail Sales in Unincorporated Portion of Trade Area
From 2002 Economic Census
Sonoma County
Sales
Number of
Sales per
Employment
NAICS
Category
($1,000)
Employees
Employee
Distribution
A
B
C
D
=A`1,000 / C
441
Motor vehicle & parts dealers
$1,332,598
3,546
$375,803
14%
442
Furniture & home furnishings stores
$178,448
996
$179,165
4%
443
Electronics & appliance stares
$200,952
B75
$229,659
3%
444
Biding mbial & grdn equip & supplies
$610,256
2,772
$220,150
11%
445
Food & beverage stores
$1,180,440
5,905
$199,905
23%
446
Health & personal care stores
$327,631
2,173
$150,774
8%
447
Gasoline stations
$299,133
861
$347,425
3%
448
Clothing & clothing accessories stores
$245,567
2,027
$121,148
B%
451
Sporting goods, hobby, book, & music stores
$169,726
1,481
$114,602
6%
452
General merchandise stores
$735,573
2,944
$249,855
11%
453
Miscellaneous store retailers
$178,224
1,402
$127,121
5%
454
Nonslore retailers
$273,400
1,124
$243,238
4%
Total Retail Sector
$5,731,948
26,106
$219,564
100%
722
Food services and drinking establishments
$537,967
12,865
541,816
TOTAL
$6,269,915
65,077
$95,346
Unincorporated
Sonoma Countv
Sales
Number of
Sales per
Employment
NAICS
Category
($1,000)
Employees
Employee
Distribution
E
F
G
H
=E"1,000 / F
441 Motor vehicle & parts dealers
442 Furniture & home furnishings stores
443 Electronics & appliance stores
444 Bldng mbial & grdn equip & supplies
445 Food & beverage stores
446 Health & personal care stores
447 Gasoline stations
448 Clothing & clothing accessories stores
451 Sporting goods, hobby, book, & music stores
452 General merchandise stores
453 Miscellaneous store retailers
454 Nonslore retailers
722 Food services and drinking establishments
TOTAL
$36,693 261 $140,586
$693,301 3,873 $178,987
�, __$76,942--;--:ha`s_1:840.-s;:.,
$770,243 5,713 $134,812
e%
1%
1%
20%
39%
4%
4%
8%
4%
0%
7%
4%
100%
Cells in gray represent estimates, based on employment class size stated in Economic Census. Sales per employee, where
estimated, is dedved by taking the sales per employee for each category for the County and adjusting this number and the
employment number by a factor so that the total sales for all retail (excluding NAICS 722, which is classified wath services in the
Economics Census) is equal to the total stated in the Census of Retail Trade for unincorporated Sonoma County. This also has the
effect of making the employment numbers roughly equivalent to the total staled. NAICS 722 employment is estimated by taking the
published numbers for all components of the sector, and adding the low end of the estimate for the one compononel NAICS sector
where only an employment range is given.
continued on next page
MAN
Appendix E: Estimate of Retail Sales in Unincorporated Portion of Trade Area
Unincomomted Trade Area
Employment Estimated
Distribution Employment
N O
from H
Estimated
8%
Taxable
Estimated
Sales
(in $1,000)
P
O
=M'O
Taxable
Taxable
Inflated
Unincomorated Sonoma Count,
Sales
Number of
Sales
Sales per
to
by State Board of Equalization Categories
($1,000)
Employees
($1,000)
Employee
2007$
$21,953
1
J
K
L
M
Service stations
grouped from E
grouped from F
adjusted from I
=K'1,000 / J
=L'inflalor
Apparel stores
$33,346
321
$33,346
$103,861
$110,725
General merchandise stores
$1,745
8
$1,745
$214,202
$228,358
Food stores
$257,045
1,500
$77,114
$51,414
$54,812
Home furnishings and appliances
$17,878
102
$17,878
$175,244
$186,825
Building materials
$152,875
783
$152,875
$195,243
$208,146
Motor Vehicles and Parts
$83,930
300
$83,930
$279,767
$298,256
Service stations
$44,558
150
$44,558
$297,849
$317,534
Other retail
$101,924
710
$101,924
$143,596
$153,086
Total Retail Sector
$593,301
3,873
$513,369
$132,534
$141,293
Eating and drinking places
$76,942
1,840
$76,942
$41,816
$44,580
Total all SBE retail categories
$770,243
5,713
$590,311
$103,319
$110,147
Inflator, 2002-2007 (BOE Taxable Sales Deflators)
1.066087
Unincomomted Trade Area
Employment Estimated
Distribution Employment
N O
from H
Estimated
8%
Taxable
Rounded
Sales
(in $1,000)
P
O
=M'O
=P/1,000
Apparel stores
8%
43
$4,790,726
$4,791
General merchandise stores
0%
1
$250,637
$251
Food stores
39%
202
$11,078,793
$11,079
Home furnishings and appliances
3%
14
$2,568,542
$2,569
Building materials
20%
106
$21,963,337
$21,953
Motor Vehicles and Parts
B%
40
$12,058,106
$12,058
Service stations
4%
20
$5,401,619
$6,402
Other retail
18%
96
$14,643,308
$14,643
Total retail sector employment 2000 Census
522
$73,755,058
$73,755
Eating and drinking places
409
$18,233,157
$18,233
Total all SBE retail categories
931
$91,9BB,225
$g1,9BB
Total unincorporated retail sector employment from 20DO Census Transportation Planning Package. Trade Area unincorporated
distribution by category assumed to follow distribution for entire unincorporated Sonoma County. Based on data from CA State
Employment Development Department, overall retail employment in Sonoma County has been relatively unchanged since 2000. This
trend is applied to the unincorporated area, with the assumption that employment has remained unchanged since 2000.
Taxable sales for food stores has been calculated based on the assumption t 30% of total food store sales are taxable.
While the drug store component of general merchandise is generally also adjusted, this sector is of insigificant size here and is not
adjusted.
Ealing and drinking place employment in unincorporated area based on ratio of unincorporated area to total unincorporated county
applied to 1,840 food service workers as shown above for unincorporated county for major sector combining arts, entertainment,
recreation, accommodation and food services. Employment numbers for Economic Census and 2000 Census are generally similar
where comparisons are possible.
Arts entertainment recreatinn accommodation and food services from Census Tmnsoortation Plannino Packane
Workers in unlncarporated Trade Area 1,141 22%
Workers In unincorporated County 5,133 100%
Food services and ddnkino establishments
Workers in unincorporated County
times proportion for major sector
Estimated workers in unincorporated Trade Area
1,840 from Economic Census, above
22%
409
Sources: BAE 2008, based on data from 2000 Census Transportation Planning Package, 2002 Economic Census, CA Employment
Development Department, and CA State Board of Equalization.
78
Appendix F: Employment by Industry, 2007
Industry Group
Farm
Natural Resources & Mining
Construction
Manufacturing
Wholesale Trade
Retail Trade
Transportation, Warehousing & Utilities
Information
Financial Activities
Professional & Business Services
Educational & Health Services
Leisure & Hospitality
Other Services
Government
Sonoma County
Number
Percent
6,000
3.1%
200
0.1%
14,400
7.3%
22,300
11.4%
7,700
3.9%
24,100
12.3%
4,500
2.3%
3,000
1.5%
9,300
4.7%
23,000
11.7%
23,600
12.0%
20,800
10.6%
6,400
3.3%
31,000
15.8%
California
Number
Percent
386,400
2.5%
25,900
02%
892,300
5.7%
1,463,200
9.4%
716,900
4.6%
1,688,800
10.9%
505,200
3.2%
472,800
3.0%
906,600
5.8%
2,263,300
14.6%
1,664,300
10.7%
1,553,100
10.0%
513,600
3.3%
2,497,400
16.1%
Total, All Industries 196,400 100.0% 15,549,600 100.0%
Notes: Annual average wage and salary employment. Workers by place of work, not by place of residence.
March 2007 Benchmark.
Data may not sum due to Independent rounding
Source: California Employment Development Department
79
Appendix G: Part vs. Full Time Employment by Key Sectors
Industry Group
Department Store
Home Electronics
Apparel
Sporting Goods
Furniture/Home Furnishings
Restaurant
Specialty Food
Other Retail
Retail Types not in Project
Office
Part Time
Number
%of Total
105,608
40.8%
24,227
16.3%
56,941
42.8%
27,532
46.6%
18,858
24.2%
391,964
43.2%
19,352
31.3%
107,694
37.5%
246,072
25.7%
495,643
20.1%
Number of Workers
Value/Cost
Land: Assessed Value by Parcel
Full Time
APN 007-241-002
Total
Number % of Total
$2,257,952
153,489
59.2%
259,097
124,194
83.7%
148,421
75,956
57.2%
132,897
31,585
53.4%
59,117
58,980
75.8%
77,838
514,705
56.8%
906,670
42,475
68.7%
61,827
179,554
62.5%
287,248
711,230
74.3%
957,302
1,966,666
79.9%
2,462,309
Source: 2000 U.S. Census Public Use Microdata Sample (PUMS); BAE, 2009.
Appendix H: Property Value Estimates
Component
Value/Cost
Land: Assessed Value by Parcel
APN 007-241-002
$12,677,444
APN 0071373-040
$2,257,952
APN 007-251-001
$5,006,248
APN 007-031-001
$3,871,858
Total Assessed Land Value
$23,813,502
Site Improvements
$15,144,020
Building Improvements
$56,521,334
Total Value Improvements
$71,665,364
Total Assessed Value $95,478,856
Uses cost method for assuming value of Improvements.
Sources: City of Petaluma; Sonoma County
Assessor's Office; Regency Centers; BAE, 2009.
Avy*0WW#d1
Resolution No. • •
of the City of Petaluma, California
ESTABLISHING A POLICY AND PROCEDURE
FOR THE PREPARATION, REVIEW AND USE OF
"FISCAL AND ECONOMIC IMPACT ASSESSMENTS"
FOR SPECIFIED DEVELOPMENT PROJECTS
IN THE CITY OF PETALUMA
WHEREAS, in 2008, the City of Petaluma adopted General Plan 2025 ("General Plan"),
which included an entire chapter on economic health and sustainability (Chapter 9); and,
WHEREAS, Goal 9-G-1 of the General Plan is to "establish a diverse and sustainable
local economy that meets the needs of the community's residents and employers;" and,
WHEREAS, policies and programs under Goal 9-G-1 of the General Plan locus on
attaining a diverse and sustainable local economy, including Policy 9-P-2 concerning ensuring
that new commercial development will have a net positive impact on the community; and,
WHEREAS, Program "A" of General Plan Policy 9-P-2 recommends that the City
consider the need for a "fiscal/economic analysis, as a component of the project's entitlement
process, of the impacts on Petaluma's economy, existing businesses, local workforce and city
finances" when reviewing commercial development proposals; and,
WHEREAS, on June 16, 2008, the City Council held a discussion regarding the means
by which the City could begin to implement the various General Plan policies and programs
related to the goal of establishing a diverse and sustainable local economy; and,
WHEREAS, the City Council's June 16, 2008, discussion of general plan economic
policies concluded with City Council support for completion of a City-wide economic
development strategy, and an immediate requirement for certain commercial uses of a given size
and type that are particularly likely, given their size and nature, to have significant impacts on
the local economy, to prepare a "fiscal and economic impact assessment" pursuant to Program
"A" of Policy 9-P-2 prior to the granting of any required land use entitlements; and,
WHEREAS, on July 7, 2008, and August 4, 2008, the City Council considered and
received public comment on proposed policies and procedures for the preparation and review of
fiscal and economic impact assessments;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma
as follows:
1. Recitals Made Findings.
The above recitals are hereby declared to be true and correct and incorporated in this resolution
as findings of the City Council of the City of Petaluma.
Resohaion No. 2008-189 N.C.S Page I
I. Fiscal and Economic Impact Assessment Policy Established.
The City Council of the City of Petaluma hereby establishes this policy and procedure for the
preparation, review and use of Fiscal and Economic Impact Assessments ("FEIAs") for specified
development projects within the City of Petaluma ("City"). The purpose of this policy and
procedure is to provide an objective evaluation of the potential economic impacts of specified
retail/commercial projects within the City. Such evaluation, together with all other available
information in the public record, is intended to help the decision making body determine project
consistency with General Plan economic goals, policies and programs, including Policy 9-P-2
concerning ensuring new commercial development will have a net positive impact on Petaluma's
economy, existing businesses, city finances and quality of life.
This policy and procedure implements General Plan Program 9-P-2 (A), regarding consideration
of the need when reviewing commercial development proposals over a specific size in building
area per occupant, to obtain a fiscal/economic analysis of the impacts on Petaluma's economy,
existing businesses, local workforce and city finances as a component of the project's entitlement
process. FEIAs required pursuant to this resolution may also be used as appropriate by project
applicants, the City Council, the Petaluma Community Development Commission, and City staff
to assist in identifying projects that may merit City and/or Commission assistance, such as
through negotiation of development agreements, direct Commission assistance for eligible
projects, and other assistance.
3. Covered Projects and Time for Submission of FEW
Any applicant for a "General Retail," "Grocery," "Hotel," or `Building and Landscape
Materials" use, as defined by the City of Petaluma Zoning Ordinance, as amended from time -to -
time, that standing alone, or in combination with any other uses, has a total floor area (including,
where applicable, the area used for outdoor sales) of 25,000 square feet or more of "General
Retail," "Grocery," "Hotel," and/or "Building and Landscape Materials" uses shall be required to
prepare and submit an FETA to the City for consideration in accordance with this resolution. To
the maximum extent permitted by law, this requirement shall apply to any new development or
any redevelopment, as defined in California Health and Safety Code Sections 33020 and 33021
as amended from time to time, that meets the use and size requirements specified in this section.
Subject to applicable law, FEW in accordance with this resolution must be submitted to the City
for consideration prior to the granting of any required land use entitlements for the project
If current economic impact assessment information already exists for a project, and that
information analyzes and discusses one or more of the FEIA factors identified in Section 6(a -g)
of this resolution, then that existing information may be used by the City or its consultants in the
preparation of the FEIA. The City may elect to obtain peer review of existing economic impact
assessment information. The source for all data and studies relied upon by the FEIA shall be
identified, including materials submitted by the applicant and/or the public.
d. Preliminary Information Required from Applicants
Prior to commencing an FEIA, applicants for projects subject to this resolution shall submit to
the City the following information in a form acceptable to the City:
a. Complete applicant and project manager contact information.
Resolution No 2008-189 N.0 S Page
b. Descriptions of proposed uses, where those uses are known, by area (square footage),
owner(s), and tenancies. Where owner(s), tenancies and/or users are not known, reasonable
assumptions regarding proposed types of retail users (e.g., home electronics, furniture, clothing,
etc.) may be substituted.
5. FEIA Costs
Applicants for projects subject to this resolution shall be responsible for all costs associated with
the preparation, administration and processing of the FEIA, including the cost of consulting
services, noticing, and any subsequent analysis in accordance with this resolution. Applicants
shall file with the City a deposit against Consultant costs for the preparation of the FEIA and the
City's administration and processing costs in an amount to be determined by the City. To avoid
delayed FEIA preparation and processing, applicants must update deposits when and as directed
by the City.
6. FEIA Contents
FEIAs shall analyze and discuss each of the following factors in sufficient detail to assist City
officials and bodies responsible for project review and entitlement determinations in assessing
project consistency with General Plan economic goals, policies and programs, including whether
the project will have a net positive impact on Petaluma's economy, existing businesses, City
finances and quality of life in accordance with Policy 9-P-2 of the General Plan and this
resolution. . FEIAs shall include a separate section on each of the factors and a summary
discussion on potential impacts to the local economy. For each factor, FEIAs shall analyze
project impacts for a five-year period from the estimated completion of the project. FEIAs
required pursuant to this resolution may analyze and discuss in addition to the following factors,
any additional factors or information an applicant deems important or relevant for a meaningful
assessment of the project's economic impact.
a. The existing local retail market conditions for market sectors proposed for the project,
including project primary and significant secondary market sectors , leakage of sales to other
comnumities in those market sectors, regional market competition in the project market sectors,
and population, demographic and related data for the project market sectors.
b. Estimated retail sales by project retail sectors or merchandise categories per square
foot, including estimated captured leakage.
c. Current and estimated retail supply and demand for each project retail sector or
merchandise category.
d. The following estimated employment characteristics: i) the estimated number and
type of jobs, including construction related, permanent, part-time and full-time of the proposed
project for the period covered by the FEIA; ii) whether the proposed project will result in
significantly increased or decreased permanent part-time jobs (35 hours or less per week), or
permanent full-time jobs (more than 35 hours per week), or a combination of permanent and full-
time jobs compared to or using applicable local or regional employment projections, such as
those from the Association of Bay Area Governments ("ABAG") for Petaluma for the period
covered by the FEIA; iii) estimated employee wages, benefits, and employer contributions for
the proposed project compared with or using relevant data for the Petaluma community, such as
living wages established in the Petaluma Municipal Code, or California Employment
Resoluuuo No. 2008-189 N.CS. Page 3
Development Department occupational wage data for the Santa Rosa -Petaluma Metropolitan
Statistical Area for the period covered by the FETA.
e. The estimated impacts of the proposed project on existing retail businesses, including
the potential for opportunities for business renewal and growth due to new businesses locating in
the Petaluma community, as well as the potential for negative impacts such as reduced sales or
closures.
f. The estimated project impacts on current and projected public revenues, including:
sales tax, use tax, base property tax, tax increment, transient occupancy tax, development fee
proceeds, benefit assessments, land dedication, exactions, developer -funded improvements, and
other public revenue benefits.
g. The estimated cost of public contributions, services and infrastructure required by the
project, including: tax rebates or refunds, land right -downs, below market or contingent loans,
site acquisition or preparation costs, fee waivers or payments, and unfunded infrastructure and
public improvement costs, and whether the estimated project public revenues will equal or
exceed estimated project public contribution, services, and infrastructures costs.
7. FEIA Preparation
Consultants preparing FEIAs must be designated or approved by the City. Project applicants
may propose FEIA consultants. City staff will coordinate with project applicants and FETA
consultants to avoid conflicts among FEIAs that are being prepared at the same time, or that
involve related or overlapping market studies, or that otherwise could conflict.
8. Treatment of FEIA and Other Project Information
The contents of FEIAs, and other project information supplied in accordance with this resolution,
will be available to members of the public, except to the extent such information is exempt from
disclosure or the disclosure of such information is prohibited pursuant to the California Public
Records Act and/or other applicable law.
9. Notice of FEIA Availability and Council Hearing on FEIA
Upon receipt of the completed FEIA, the Community Development Department shall provide a
public notice of its completion and availability for public review. Notice shall be provided in the
form of a one-eighth page display advertisement in the City's adjudicated newspaper of general
circulation, and by mail to all property owners and residents within 1,000 feet of the project site
and to all others that have requested such notice in writing. Additional information shall be
provided on the City's website and at designated City facilities. The notice shall appear at least
thirty days prior to the City Council hearing on the FEIA. The notice shall contain the time and
place of the City Council hearing on the FEIA.
10. City Council Hearing and Use of FEIAs
Before a project subject to this resolution is granted any required land use entitlements, the City
Council will hold a public hearing, noticed in accordance with Section 9, to consider and discuss
the FEIA and the project, and to permit project applicants, FEIA consultants, and the public to
comment on the FEIA and the project. The FEIA hearing before the City Council is not intended
Resolution No, 2008-189 N C 5 page 4
to require or result in separate findings, conclusions or approvals regarding a project. The
purpose of the Council FETA hearing is to have public discussion of project FEIAs with the City
Council, applicants and the public before required project land use entitlements are granted.
The City officials and/or bodies responsible for project review and entitlement determinations
shall, in the normal course of their project review and entitlement determination responsibilities,
use the FETA to assist them in determining project consistency with General Plan economic
goals, policies and programs, including whether the project will have a net positive impact on
Petaluma's economy, existing businesses, city finances and quality of life. In the normal course
of their project review and entitlement determination responsibilities and after due consideration
of the information, analysis and conclusions contained in the FETA, the City officials and/or
bodies responsible for project review and entitlement determinations may accept and adopt the
information, analysis, and conclusions of the FEIA as findings of the officials or bodies in
support of their action concerning the project. However, nothing in this resolution requires
reviewing bodies to make findings concerning project consistency with the General Plan
economic goals, policies and programs separate from or in addition to findings required by law
or that are part of the City's existing entitlement process.
11. No Private Right of Action
Nothing in this resolution creates or shall be construed as creating a private right ofaction.
REFERENCE:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Under the power and authority conferred upon this Council by the Charter of said City.
1 hereby certify the foregoing Resolution was introduced and adopted by the
Council of the City ol'Petallima at a Regular meeting our the 6" day or October,
ao{}A. by the Following rote:
Barrett. Harris, Neu, Vice Mayor Rabbin, Mayor'forlintt
Prcilas, O'Brien
None
None
t
City lCUAIJ
Uzs,�9-L-
Resolution No. 2008-t89 N C.S.
Bayo,
/' Approved as to
form:
IV
e1ly Attorney
Page 5