HomeMy WebLinkAboutApp-E_Bakersfield-Gateway-Urban-Decay_10-17-14Appendix E
Bakersfield Gateway Urban Decay Analysis
17461 Irvine Blvd., Suite P, Tustin, CA 92780 (714) 772-8900 www.gobar.com
ALFRED GOBAR ASSOCIATES
October 17, 2014
Mr. John Guimara, Jr.
3 J’S & R LLC
P.O. Bin 1969
Bakersfield, CA 93303
Subject: Bakersfield Gateway Urban Decay Analysis
Dear Mr. Guimara:
Enclosed is an Administrative Draft of the report titled, “Bakersfield Gateway Urban
Decay Analysis .” This report summarizes major research components of analysis
including; a market study of retail potential (Chapter III), a market study of lodging
potential (Chapter IV), and assessment of the project impact on existing businesses,
including the corresponding risk of urban decay (Chapter V). An executive summary is
also included that provides a synopsis of major research findings and economic-
environmental determinations (Chapter II). This report is based on the June 10, 2014
Scheme 3 concept of the Bakersfield Gateway Center as prepared by HTH Architects.
This Administrative Draft is submitted for review by ICF Jones & Stokes (the City
selected environmental consultant) for ultimate inclusion as a Technical Report
Appendix to the Draft EIR.
I will be out of the office from Monday, October 26th to Friday October 31st, but will
regularly check email and respond to inquiries as able during that period.
Very truly yours,
ALFRED GOBAR ASSOCIATES
Alonzo Pedrin
Principal
alonzo@gobar.com
(714) 772-8900 x310
Encl.
Cc: Mr. Dave Dmohowski – Principal Planner, QUAD KNOPF, INC.
F:\BAKERSFIELD-GATEWAY-URBAN-DECAY_ADMIN-DRAFT\OCTOBER 17, 2014\B
ALFRED GOBAR ASSOCIATES
17461 Irvine Blvd., Suite P, Tustin, CA 92780 (714) 772-8900 www.gobar.com
BAKERSFIELD GATEWAY URBAN DECAY ANALYSIS
Prepared for:
3 J’S & R LLC
October 2014
ALFRED GOBAR ASSOCIATES
Table of Contents
Bakersfield Gateway Urban Decay Analysis – Administrative Draft i
CHAPTER ....................................................................................... PAGE
I INTRODUCTION ........................................................................ I-1
Project Overview and Study Background .............................. I-1
Study Objectives and Research Tasks ................................. I-2
Retail Land Use .............................................................. I-2
Hotel Land Use ............................................................... I-4
Study Resources .................................................................. I-5
II EXECUTIVE SUMMARY ............................................................ II-1
Study Overview .................................................................... II-1
Project Description ............................................................... II-1
Project Retail Potential and Impact ....................................... II-2
Project Lodging Potential and Impact ................................... II-7
Cumulative Effect of Project Development ............................ II-9
Project Economic Impact and Urban Decay .......................... II-10
III RETAIL MARKET POTENTIAL .................................................. III-1
Project Description ............................................................... III-1
Functional Role of Bakersfield Metro Area ............................ III-5
Bakersfield Gateway Center Retail Trade Area ..................... III-9
Trade Area Consumer Characteristics .................................. III-11
Trade Area Population Growth ............................................. III-12
Consumer Spending Potential .............................................. III-15
Existing Retail Facilities ........................................................ III-20
Retail Expansion and Future Facilities .................................. III-21
Retail Market Potential .......................................................... III-24
Regional-Oriented Retail Potential .................................. III-26
Neighborhood Oriented Retail Potential .......................... III-31
Target Retail Sales and Residual Potential ..................... III-33
Entertainment-Leisure Market Potential ................................ III-34
Movie Theater Potential .................................................. III-35
Health Club-Fitness Center Potential .............................. III-38
IV LODGING MARKET POTENTIAL .............................................. IV-1
Lodging Industry Overview ................................................... IV-1
Kern County Lodging Overview ............................................ IV-2
Bakersfield Metro Area Lodging Facilities and Trends .......... IV-5
Bakersfield Metro Area Overall Lodging Potential ................. IV-9
Lodging Demand Potential ............................................. IV-10
Lodging Supply Growth ................................................... IV-11
Residual Market Potential ............................................... IV-12
Lodging Market Potential – Upscale Hotels .......................... IV-14
Lodging Market Potential – Midscale-Economy Hotels ......... IV-16
ALFRED GOBAR ASSOCIATES
Table of Contents
Bakersfield Gateway Urban Decay Analysis – Administrative Draft ii
CHAPTER ....................................................................................... PAGE
V PROJECT ECONOMIC IMPACT AND URBAN DECAY ............. V-1
Project Impact on Existing Businesses ................................. V-2
Impact on Retail Businesses ........................................... V-2
Impact on Entertainment-Leisure Businesses ................. V-9
Impact on Lodging Businesses ....................................... V-9
Urban Decay Risk of Sale Impact ................................... V-11
Operating Resiliency and Risk of Business Failure ............... V-12
Retail Resiliency and Business Failure ........................... V-12
Risk of Business Failure and At-Risk Groups .................. V-16
Protracted Vacancy Risk ...................................................... V-17
Vacancy Replacement Potential .................................... V-18
Cumulative Effect of Project Development ............................ V-19
Project Economic Impact and Urban Decay .......................... V-21
EXHIBIT
III-1 Bakersfield Gateway Center
Site Concept and Commercial Land Use Elements
III-2 Selected Retail Center Characteristics By Type Venue
III-3 Bakersfield Gateway Center
Phasing, Floor Area, Store Mix & Sales Performance Summary
III-4 Retail Performance Comparisons – 2012
City of Bakersfield and Selected Geographic Regions
III-5 Bakersfield Gateway Center Metro Trade Area Setting
III-6 Consumer Demographics For Selected Reference Areas
III-7 Household Retail Spending Behavior By Income Level
III-8 Consumer Spending Potential
SBOE Reporting Detail and Store-Group Classification Scheme
III-9 Per Capita Spending Potential of Trade Area Consumers
III-10 Summary of Retail Anchor Facilities
Within Bakersfield Metro Area
III-11 Retail Anchor Facilities Surveyed
Bakersfield Gateway Metro Area – March 2014
ALFRED GOBAR ASSOCIATES
Table of Contents
Bakersfield Gateway Urban Decay Analysis – Administrative Draft iii
EXHIBIT
III-12 Planned and Proposed Retail Center Development
Bakersfield Metro Area
III-13 Bakersfield Trade Area Retail Growth Simulation 2012 to 2016
III-14 2016 Trade Area Residual Support Potential
Bakersfield Gateway Center, Bakersfield CA
IV-1 Index of Population-Employment-Visitor Spending and
Room-Night Demand Trends, Kern County Region
IV-2 Bakersfield Metro Area Hotels By Price Segment
IV-3 Annual Occupancy and Average Daily Rate Trends
Bakersfield Metro Area By Price Segment
IV-4 Room-Nights Sold as Index of 2006 Average Performance
Bakersfield Metro Area By Price Segment
V-1 Bakersfield Gateway Center – Projected Sales Shift
V-2 Bakersfield Gateway Center – 2019 Impact of Projected Sales Shift
V-3 Year-To-Year Growth and Decline In
Sales And Establishment Permits – Constant Dollar Trends
City of Bakersfield, California
V-4 Post-Project Growth In Retail Sales Support
Bakersfield Metro Area
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft I-1
Chapter I
Introduction
Project Overview and Study Background
The proposed Bakersfield Gateway Center is planned to include approximately
800,000 square feet of retail space plus 240 rooms of lodging that will add roughly
84,000 square feet to the overall development. When completed and fully occupied,
the Bakersfield Gateway Center would host the third largest concentration of retail
space within the Bakersfield Metro Area as shown below.
Bakersfield Metro Area - Largest Retail Centers
Retail Anchor-Scale Percent Center
Name of Center Lease Area Lease Area Anchored Type
Valley Plaza Center 1,291,434 799,995 62%Super Regional
Northwest Promenade I & II 851,885 803,174 94%Power
Bakersfield Gateway (Subject)800,000 705,000 88%Power-Hybrid
Gosford Village 501,766 483,657 96%Power
East Hills Mall 403,052 259,199 64%Regional
Panama Lane 368,630 353,615 96%Power
Bakersfield Plaza 365,472 278,992 76%Power
Source: CoStar Group; Alfred Gobar Associates
The lodging component of the Bakersfield Gateway Center is likely to consist of two
(2) separate or affiliated hotel operations of roughly similar size. When complete, on-
site lodging would add to a lodging base of nearly 6,100 rooms within 62 hotel
facilities operating within the Bakersfield Metro Area.
The project sponsor (3J’s and R, LLC) has requested the preparation of an urban
decay study that evaluates the potential impact of the proposed center on existing
retail and lodging market competitors. A 2004 court ruling (Bakersfield Citizens for
Local Control v. City of Bakersfield – 124 Cal.App. 4th 1184) defined Urban Decay as
“…a chain reaction of store closures and long -term vacancies, ultimately destroying
existing neighborhoods and leaving decaying shells in their wake.” The court also
determined that when social and economic effects result in changes to the physical
environment, urban decay must be examined as an environmental issue under
California Environmental Quality Act (CEQA). Subsequent to this decision, the City of
Bakersfield (City) adopted a land use implementation policy as part of the
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft I-2
Metropolitan Bakersfield General Plan requiring preparation of an Urban Decay Study
for a commercial center exceeding 250,000 square feet of gross leasable space.
Alfred Gobar Associates has prepared this analysis, which is included as a technical
appendix to the Draft Environmental Impact Report being prepared by ICF Jones &
Stokes for the City.
Study Objectives and Research Tasks
Retail Land Use
This economic analysis seeks to address the following key question related to retail
land use:
What is the potential for the Bakersfield Gateway Center to cause significant
physical impact to the environment in the form of urban decay among existing
retail facilities in the Bakersfield area?
To determine if the project will cause significant physical impacts to retail facilities, the
following factors are evaluated:
Market Potential – the relative abundance or absence of market potential
determines the extent project sales is dependent on sales support that currently
flows to existing retailers. Market potential is the amount of sales support that
remains available to the project after accounting for potential sales support from
market area consumers, minus actual sales support captured by existing retailers.
For purpose of this study, market potential is the residual product of sales
potential, less actual sales.
Sales Impact – the extent to which project sales performance is dependent on
sales currently captured by existing retailers. When project sales performance
depends on capturing sales that currently flow to existing retailers, a shift in sales
occurs (sales shift). Existing retailers that suffer a reduction in store sales due to
sales shift face added competition and operating pressure that may increase the
potential for business failure and attendant vacancy. The magnitude and duration
of sales shift are important factors that contribute to potential for widespread
business failure and attendant vacancy.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft I-3
Retail Resiliency – the demonstrated ability of existing retailers to weather and
rebound from sales impacts. Whether or not the sales impact significantly
increases the risk of widespread business failure and attendant vacancy depends
on the resiliency of existing retailers. Precedent trends describing sales
fluctuations and growth in number of establishments willing to compete in the
market area are evaluated. The demonstrated resiliency of existing retailers is
used to determine the significance of risk that widespread vacancy will result due
to business failure.
Post-Project Market Growth – the amount of future market growth that can be
expected and the corresponding potential to fill vacated space with a replacement
or alternate retail activity. The likelihood that existing retail space will be impacted
by a period of protracted vacancy depends on the market potential to again fill
vacated space with replacement retail activity or an alternate retail use. Growth in
trade area potential is evaluated in terms of the amount of retail space that can be
competitively supported.
Cumulative Effects – the extent the project contributes directly and indirectly to
urban decay based on the cumulative effects of the project and other retail
development programs likely to compete for a portion of future market growth
after the project is in operation.
Alfred Gobar Associates performed several research tasks during the course of this
investigation. Specific research tasks performed are briefly summarized as follows:
Characterize the retail focus of the Bakersfield Gateway Center by comparing the
proposed project against large base of conventional shopping center programs.
Identify the relevant market area of the Bakersfield Gateway Center.
Evaluate trade area consumer population, projected growth, and expenditure
potential describing retail demand currently and over a mid-term time frame.
Analyze taxable and non-taxable retail merchandising activity in the market area.
Estimate share of project sales that describe taxable retail merchandising and
non-taxable consumer service activities.
Identify share of projects sales support originating from within trade area versus
share from County residents living outside the trade area.
Conduct field work to identify major retail competitors in the trade area.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft I-4
Review Planning information on major retail projects expected to be in place when
the Bakersfield Gateway begins Phase 1 operations in 2016 and Phase 2
operations in 2019.
Estimate the sales impact on existing trade area retailers.
Assess the competitive resiliency of existing trade area retailers and likelihood
widespread and protracted retail vacancy will result after Center begins operating.
Assess cumulative sales growth after project is developed and assess potential to
replace potentially vacant space with replacement or alternate retail uses.
Assess the extent to which development and operation of the Bakersfield
Gateway Center may or may not contribute to urban decay in the market area.
Hotel Land Use
In addition, this analysis also evaluates the potential for significant physical impact to
the environment in the form of urban decay among existing lodging facilities in the
Bakersfield area. The approach and methodology used to assess potential impacts
on lodging facilities is summarized below:
Market Potential – growth in demand for room-night lodging expected to exceed a
level of market capture that characterizes normative performance of existing
Bakersfield area hotels. Competitive factors such as average daily revenue and
occupancy levels are evaluated to identify distinct pricing segments that
distinguish competing classes of lodging in the Bakersfield area. Precedent
lodging performance is compared against economic factors such population,
employment, and visitor activity to identify incident rates of demand associated
with growth in lodging potential. Projected growth in lodging demand is compared
against existing and projected growth in lodging supply in order to identify residual
room-night demand available for new hotel development begining in 2016.
Lodging Impact – the extent to which new hotel development at the Bakersfield
Gateway Center reduces room-night occupancy at existing hotels below
normative levels of performance that should be anticipated if not for the project.
To the extent lodging activity at the Bakersfield Gateway Center is dependent on
capturing room-night demand that would otherwise flow to existing hotels, a
lodging impact can be expected. A substantial drop in room-night lodging
performance over a protracted period raises the risk of business failure and
eventual hotel vacancy.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft I-5
Post-Project Lodging Potential – whether or not the indicated lodging impact
significantly increases the risk protracted vacancy depends on the level of growth
in lodging demand that enables existing hotels to again achieve room-night
occupancy levels that would have been realized if not for the impact of the project.
Post-project potential identifies the likely time period any resulting hotel vacancy
will persist until sufficient market potential exists to attract a replacement operator.
This above research approach is integrated into a comprehensive analysis of project
impact and urban decay addressed in Chapter V of this report.
Study Resources
A wide variety of data resources were relied upon to complete this study. The scope
of analysis reflected in this study is based upon preliminary concept plan information
provided by HTH Architecture, land use activities permitted by the City Zoning
Ordinance at the site location (See Appendix A), and the background and experience
of Alfred Gobar Associates evaluating real estate market potential for a wide variety
of land use activity. The research summarized in this analysis relied extensively on
public information obtained from government sources, industry associations, and
private data vendors. Alfred Gobar Associates also conducted extensive in-field
research during March and June of 2014 to identify significant retail and lodging
facilities competing within the Bakersfield Metro Area and contributing to cumulative
development. Alfred Gobar Associates did not have access to any proprietary data or
resources describing confidential operations of any individual retail or lodging
competitor. The findings of this analysis reflect a thorough and reasoned assessment
of public information obtained directly from government websites or purchased
through a subscription service or special tabulation request. Finally, key data sources
relied upon to prepare this economic impact and urban decay analysis are briefly
described in Appendix B.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-1
Chapter II
Executive Summary
Study Overview
This analysis seeks to determine the potential for the Bakersfield Gateway Center to
cause significant physical impact to the environment in the form of urban decay
among existing retail and lodging facilities in the surrounding metro area. A 2004
court ruling (Bakersfield Citizens for Local Control v. City of Bakersfield 124 Cal.App.
4th 1184) defined Urban Decay as “…a chain reaction of store closures and long -term
vacancies, ultimately destroying existing neighborhoods and leaving decaying shells
in their wake.” For purpose of this analysis, “urban decay” is characterized by
physical conditions attributed to long-term vacancy that include, but are not limited to,
the deterioration of buildings and parking lots that create a haven for litter, graffiti,
vandalism, loitering, and homeless populations.
To determine the potential for urban decay, a probable chain of economic and
physical events leading up to and following development and operation of the
Bakersfield Gateway Center is evaluated, including: market potential not captured by
existing retail and lodging businesses when the center begins operating; sales impact
the proposed center is expected to have on existing retail and lodging businesses;
risk the identified sales impact will bring about widespread business closures and
vacancy of existing facilities; likelihood that resulting vacancies will be long-term in
the absence of market opportunity to re-fill vacated space; and risk that the probable
tenure of vacancy will bring about significant urban decay of existing retail and
lodging facilities. This analysis also considers the cumulative the effect of project
development on existing retail and lodging facilities.
Project Description
The Bakersfield Gateway Center will occupy roughly 85 acres at the northeast corner
of the SR99 Freeway and Hoskings Avenue, in the southeastern area of Bakersfield.
Based on preliminary concept plans, the project can be characterized as a regional-
serving commercial center hosting 800,000 square feet of retail activity and 240
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-2
rooms of lodging activity. The project is envisioned to be built in two phases, with
Phase 1 completed and in operation by 2016 and the balance of the project
completed and in operation by 2019. The market focus of on-site retail activity is not
yet defined (a 60,000 square foot Bass Pro is the only prospective tenant with a letter
of intent) but is likely to reflect a hybrid mix of retail activities. Similarly, the market
focus of project lodging is only defined in terms of a 240 room total but is expected to
consist of two separate operations targeting distinct groups of travelers. For purpose
of this analysis a baseline market focus and a modified market focus is used to
describe the completed project in 2019 as summarized below.
Bakersfield Gateway Center - 2019 Phased Completion Summary
Baseline Focus Modified Focus2
Leasable 2019 Equiv.Leasable 2019 Equiv.
Project Land Use Activity Bldg Area Gr Sales Bldg Area Gr Sales
(Sq Ft)($000's)(Sq Ft)($000's)
Retail Merchandising 701,000 $211,306 701,000 $217,576
GAFO Products1 526,000 153,496 466,000 134,416
Building Materials 120,000 36,960 120,000 36,960
Drug-Sundry-Food-Grocery 0 0 60,000 25,350
Dining-Snack Services 45,000 18,270 45,000 18,270
Auto Parts/Supply/TBA 10,000 2,580 10,000 2,580
Fin-Ent-Leisure Services 99,000 $6,740 99,000 $6,740
Banking Services 4,000 760 4,000 760
Cinema (14-16 Screens)60,000 4,440 60,000 4,440
Fitness-Recreation 35,000 1,540 35,000 1,540
Retail-Dining-Leisure Activity 800,000 $218,046 800,000 $224,316
Lodging Activity (240 Rooms)84,000 6,216 84,000 6,216
Bakersfield Gateway Center:884,000 $224,262 884,000 $230,532
Note:
1 GAFO - includes General Merchandise, Apparel, Furnishings, & Other Specialty-Misc Products
2 Modified retail focus includes a Supermarket & Drug Store and reduced amount of GAFO
Source: Alfred Gobar Associates; HTH Architects
The market focus of on-site lodging is expected to include an upscale hotel and
midscale-economy hotel under the baseline and modified scenarios described above.
Project Retail Potential and Impact
The scale of development dictates a regional-oriented trade area if the project is
expected to capture sufficient market support to warrant 800,000 square feet of retail
activity in a single site location. The geographic boundary describing the Metro
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-3
Bakersfield General Plan (jointly adopted by the City and County in 2009) describes
the relevant trade area to evaluate market potential for retail activity within the project.
For purpose of this study the relevant trade area is described as the Bakersfield
Metro Area (Metro Area).
Historically, retail establishments within the City of Bakersfield and adjoining Metro
Area have functioned as an attractive destination for retail demand originating
throughout the broader Kern County region. According to State Board of Equalization
(SBOE) data, roughly 25% of 2012 sales (latest available data) captured by City-
based retailers represents an influx of support from consumers residing outside the
City. By comparison, the pace of retail expansion (described in terms of
establishment permits per population) has been lagging behind the rate of market
growth describing broad retail industry performance indexes as illustrated below.
Retail Establishment Growth Trends For Selected Regions
Source: State Board of Equalization; CA-Department of Finance; Alfred Gobar Associates
7.0
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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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Bakersfield Kern County Southern California California
Since 2011, only about 175,000 square feet of retail space has been added to the
supply of retail facilities in the Metro Area, less than the amount of space built and
occupied in 2010 alone. In short, growth in the number of Metro Area retail
competitors and supply of retail facilities has been very limited despite steady
recovery and growth in retail potential following the Great Recession.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-4
Retail demand is largely defined by consumer spending potential, which is greatly
influenced by household income. Historical and projected trends describing
consumer spending potential within the Bakersfield Metro Area are illustrated below.
Annual Per Capita Spending Trends and Potential
Note:Indicated potential reflects taxable & non-taxable per capita spending, excluding automobile and gasoline purchases.
illustrated spending levels based on 2012 inflation-adjusted constant dollar reporting data.
Source: State Board of Equalization; Department of Finance; Employment Development Department; Alfred Gobar Associates
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
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California Southern California Kern County Bakersfield Metro Area
Excluding a brief period of extraordinary spending preceding the Great Recession,
overall retail potential describing Metro Area consumers has consistently lagged the
broader State-wide index by roughly 10%. The outlook is that per capita spending
potential will continue to rise sharply over the short-term but moderate over the mid-
term. Despite the positive near-term outlook of spending potential, the absolute level
of per capita spending in the trade area is not expected to reach the 2006 pre-
recession level of spending until nearly 2020.
Existing retail competitors will invariably benefit from growing consumer demand by
capturing a share of the increase in consumer spending. Market potential for retail
activities within the Bakersfield Gateway Center is defined by the residual product of
retail demand (described as consumer spending) less retail supply (described as
sales captured by existing businesses). In other words, trade area spending potential
less trade area actual sales equals residual support potential. The level of residual
potential provides a strong indication about the probable sales impact associated with
the project. When a target level of sales describing the project exceeds available
residual potential there is increased risk target sales can only be achieved by shifting
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-5
sales support away from existing businesses. The sales impact attributed to a
regional-oriented mix of project retail activity is summarized below.
Bakersfield Gateway Center - 2019 Projected Sales Shift
Project Available Target Sales Projected Sales Shift
Target Residual As Share of Req'd From As Share of
Retail Store-Group Category Sales Potential Residual Area Stores Target Sales
($000's)($000's)($000's)
GAFO Retail Activity $153,496 $609,464 60%($14,035)43%
General Merchadising 32,400 18,365 >100%(14,035)43%
Apparel & Accessories 30,544 121,635 25%0 neg'l
Furniture & Hshld Appl/Elect.19,320 154,184 13%0 neg'l
Other Specialty-Misc Retail 71,232 315,280 23%0 neg'l
Building Materials 36,960 43,402 85%0 neg'l
Drug & Sundries 0 0 n.a.p.n.a.p.n.a.p.
Food & Beverage 0 0 n.a.p.n.a.p.n.a.p.
Eating & Drinking 18,270 240,912 8%0 neg'l
Auto TBA-Maint 2,580 0 >100%(2,580)100%
Retail & Dining Sub-Total $211,306 $893,778 24%($16,615)8%
Consumer-Ent Services 6,740 n.a.n.a.n.a.n.a.
All Retail-Dining-Ent Activity $218,046 $893,778 24%($16,615)8%
Source: Alfred Gobar Associates
As shown, enough available residual potential is indicated to achieve a target level of
sales for all store-group activities except general merchandising and auto parts-tires-
batteries-accessories (TBA). In 2019, about 43% of the $32.4 Million in general
merchandising sales and 100% of the $2.58 Million in TBA sales within the project is
likely to reflect a sales shift from other similar businesses.
Residual market potential for a drug store, grocery store, multi-screen cinema, and
large-format health club within the Bakersfield Gateway Center was also evaluated to
determine if any of these retail activities are likely to have a sales impact. Shown
below is the potential sales impact of a drug store and grocery store.
2019 Projected Sales Shift For Drug & Grocery
Drug Store Grocery Store
Retail Market Criteria Anchor Anchor
Size of Project Anchor (Sq Ft)15,000 45,000
Target Sales of Project Anchor $6,180,000 $19,170,000
3-Mile Trade Area Residual $6,767,000 $21,881,000__________________
Residual Excess/(Shortage)$587,000 $2,711,000
As Share of Total Residual 9%12%
Projected Sales Shift Neg'l Neg'l
Source: Alfred Gobar Associates
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-6
The analysis of drug and grocery store potential focused on sales support originating
within a 3-mile neighborhood trade area (due to the market focus of these retail
activities). Enough residual potential is indicated to achieve a target level of drug and
grocery sales without shifting sales from other similar businesses. The corresponding
analysis of cinema and health club potential indicates sufficient residual potential
during 2016 to support a 60,000 square foot (14-16 screen) cinema and a 35,000
square foot (large-format) health club without having to shift movie-goer visits or club
membership sales from other similar businesses.
The ultimate impact of the project is not only influenced by the magnitude of the
impact but its duration. If a sales impact is inordinately large or triggers an extended
period before reduced sales performance is recovered, the operating resiliency
(ability to overcome periodic declines in sales performance) of affected businesses
can be compromised, increasing the risk of widespread business failure and related
vacancy of retail facilities. SBOE data tracking fluctuations in sales per
establishment, number of establishment permits, and total store-group sales between
1991 and 2012 indicate existing retailers have been able to withstand 5% to 7%
annual declines in sales over multi-year periods without triggering a significant
reduction in number of competing businesses. The project sales impact on general
merchandise and TBA retailers amounts to less than a 2% decline in sales
performance that can be recovered with a 2-month to 7-month period of same-store
sales growth (when same-store sales growth matches sales growth of the larger
store-group). The magnitude and duration of the indicated sales impact possess
negligible risk of inducing widespread vacancy from store closings.
The possibility remains that one or more existing retail businesses could suffer a loss
in sales performance that ultimately leads to business closure and vacancy of the
previously occupied space. The impact of a store closing can be compounded if the
affected business is an anchor-scale operation (typically larger than 10,000 square
feet) generating repeat shopper traffic that increases exposure and sales
performance opportunity for adjacent non-anchor businesses. A protracted period of
vacancy increases the risk that affected retail facilities will be impacted by urban
decay. The probable duration of any vacancy attributed to the Bakersfield Gateway
Center depends on the incremental pace of future retail market growth and potential
to re-occupy the vacated space with a replacement business. The expected pace of
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-7
retail market growth for a wide variety of store-group activities throughout the Metro
Area substantially reduces the risk that an affected retail property will suffer a
protracted period of vacancy. The post-project outlook of retail support potential is
summarized below.
Post-Project Retail Support Potential - Bakersfield Metro Area
Cumulative Increase In Incremental Retail Floor Space Support
Retail Store-Group Activity 2019 2020 2021 2022 2023 2024 2025
General Merchadising - 114,000 257,000 393,000 520,000 644,000 767,000
Apparel & Accessories 37,000 80,000 132,000 183,000 230,000 275,000 320,000
Furniture & Hshld Appl/Elect.57,000 86,000 121,000 155,000 187,000 218,000 249,000
Other Specialty-Misc Retail 100,000 166,000 247,000 326,000 399,000 469,000 540,000
Building Materials 14,000 53,000 102,000 148,000 192,000 234,000 276,000
Drug & Sundries n.a.n.a.n.a.n.a.n.a.n.a.n.a.
Food Store Activity n.a.n.a.n.a.n.a.n.a.n.a.n.a.
Eating & Drinking 70,000 143,000 233,000 320,000 401,000 479,000 557,000
Auto Parts & Accsy - 11,000 26,000 40,000 53,000 65,000 78,000
Service stations - 6,000 13,000 20,000 27,000 34,000 40,000
Auto & Vehicle Sales - 30,000 60,000 100,000 130,000 160,000 190,000
All Retail Activity Combined 278,000 689,000 1,191,000 1,685,000 2,139,000 2,578,000 3,017,000
Source: Alfred Gobar Associates
Project Lodging Potential and Impact
Lodging potential can be evaluated in terms of demand for overnight stays (room-
night demand) associated with basic components of economic growth; area
population, area employment, and visitor travel activity. Site lodging will compete
most directly with other hotels in the Metro Area, which competes for a share of
economic growth throughout the larger Kern County region as shown below.
Kern County-Bakersfield Metro Area Hotel Room Supply
Source: Smith Travel Research; Alfred Gobar Associates
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014p
Nu
m
b
e
r
o
f
H
o
t
e
l
R
o
o
m
s
Kern County Region Bakersfield Metro Area
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-8
All hotels do not compete for the same consumer and all consumers do not prefer the
same lodging experience. Long-term market trends in the Metro Area indicate a
strong shift in traveler preference for more upscale lodging, particularly since the cost
of staying in an upscale hotel within the Bakersfield area is among the lowest in the
State. Market trends tracking hotel revenue performance indicate a growing
concentration of hotel operations into two distinct pricing segments. The mid-term
outlook is that Metro Area hotels will compete extensively in one of two distinct pricing
segments consisting of upscale hotels and midscale-economy hotels.
Bakersfield Metro Area - Average Daily Rate (ADR) Trends
Source: Smith Travel Research; Alfred Gobar Associates
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014p
Upscale Midscale Economy
The 240 rooms of lodging activity within the project will likely be characterized by a
120-room upscale hotel and a 120-room midscale-economy hotel. A stand-alone
120-room hotel operating within the project would be larger than nearly 75% of all
existing hotels competing within the Metro Area. Specific phasing of project hotel
development has not been identified. The market potential analysis assigns 2016 as
the first full-year of operation describing one or both on-site hotel facilities.
For purpose of this analysis residual market potential for lodging at the project site is
defined as the residual product of overall room-nights demanded less room-nights
sold by existing hotels operating at an above-average rate of occupancy (equal to the
80th percentile level of occupancy achieved between 2001 and 2013). Whether or not
project lodging impacts existing hotels depends on the indicated level of residual
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-9
potential. With respect to a prospective upscale hotel facility, residual potential and
likely sales impact on other similar hotel facilities is summarized below.
Projected Impact of Upscale Lodging Activity
Rm-Nt Existing Hotels Residual Potential Impact of Project Lodging
Ref Demand Room Annual Rm-Nts Equiv Room Total Hotel Rm-Nts Req'd
Year (Mill)Supply Occupancy (Mill)Demand Rooms Sold (Mill)Sales Shift
2016 0.689 2,420 71.6%0.056 306 120 0.031 neg'l
2017 0.703 2,420 71.6%0.071 361 120 0.031 neg'l
2018 0.719 2,420 71.6%0.086 417 120 0.031 neg'l
2019 0.734 2,420 71.6%0.101 475 120 0.031 neg'l
2020 0.750 2,420 71.6%0.117 534 120 0.031 neg'l
Source: Smith Travel Research; Alfred Gobar Associates
By 2016, enough residual demand for upscale lodging is identified to support 306
additional rooms, while still allowing other similar hotels to achieve above average
occupancy. Corresponding residual potential and the expected sales impact of a
midscale-economy hotel within the project is summarized below. By 2016, enough
residual potential is indicated to support 196 additional rooms while still allowing other
similar hotels to achieve above average occupancy as shown below.
Projected Impact of Midscale-Economy Lodging Activity
Rm-Nt Existing Hotels Residual Potential Impact of Project Lodging
Ref Demand Room Annual Rm-Nts Equiv Room Total Hotel Rm-Nts Req'd
Year (Mill)Supply Occupancy (Mill)Demand Rooms Sold (Mill)Sales Shift
2016 0.880 3,750 61.0%0.045 196 120 0.027 neg'l
2017 0.897 3,750 61.0%0.061 269 120 0.027 neg'l
2018 0.914 3,750 61.0%0.078 341 120 0.027 neg'l
2019 0.930 3,750 61.0%0.095 413 120 0.027 neg'l
2020 0.947 3,750 61.0%0.112 487 120 0.027 neg'l
Source: Smith Travel Research; Alfred Gobar Associates
Sufficient residual potential is indicated to warrant the envisioned scope of project
lodging activity with negligible risk that other similar hotels would suffer a decline in
room-nights sold and corresponding operating occupancy.
Cumulative Effect of Project Development
Potential cumulative effects include the direct environmental impact that can be
attributed to the proposed project and indirect effects that may also exist when the
proposed project is considered in the context of a broader group of future
development of which it is a part. The direct environmental impact of the project has
been evaluated above in the context of existing and expected future development,
excluding a number of planned projects that have made little formal progress toward
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-10
completion since conceptually approved. These planned but unscheduled
development programs were considered in evaluating the potential cumulative effect
of the project. The potential cumulative effect of project retail development is
summarized below.
Cumulative Effect of Project & Unscheuduled Future Retail
Future Incremental Incremental Cumulative
Reference Retail Retail Market
Market Growth Criteria Year Demand Supply Balance
(Sq Ft)(Sq Ft)(Sq Ft)
Pre-Project Cumulative Residual 2014-2019 2,032,000 - 2,032,000
Bakersfield Gateway Center 2019 - 800,000 1,232,000
Unscheduled Future Retail 2019 - 2,081,700 (849,700)
Post-Project Incremental Residual 2019 278,000 - (571,700)
Post-Project Incremental Residual 2020 375,000 - (196,700)
Post-Project Incremental Residual 2021 465,000 - 268,300
Post-Project Incremental Residual 2022 447,000 - 715,300
Post-Project Incremental Residual 2023 417,000 - 1,132,300
Post-Project Incremental Residual 2024 402,000 - 1,534,300
Post-Project Incremental Residual 2025 403,000 - 1,937,300
Source: Alfred Gobar Associates
The above cumulative analysis assumes over 2.0 Million square feet of unscheduled
retail space is developed during the same time frame as the project (a highly
improbable scenario). Even with the added retail space, the cumulative effect of the
project and related land use development is short-lived due to future retail market
growth. The cumulative effect of project retail is not significant. With respect to
project lodging, future unscheduled development includes 104 rooms of upscale
lodging. Even including this additional supply of lodging development, enough future
market growth is projected (475 rooms of demand by 2019) to support the added
supply. The cumulative effect of project lodging is not significant.
Project Economic Impact and Urban Decay
Prolonged vacancy is a condition that significantly contributes to urban decay
because it creates financial conditions, including protracted periods without rental
income that diminish property owner incentives to maintain vacant space. Property
owner incentives to maintain property improvements are significantly challenged
when a substantial portion of rental space remains vacant significantly longer than is
customarily required to find a replacement tenant. The economic impact of project
development and risk of the corresponding environmental impact of urban decay is
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft II-11
summarized below for the two major land use components describing the Bakersfield
Gateway Center.
The economic analysis indicates the sales impact on existing retailers (including
entertainment-leisure activities) attributed to the project is negligible for all forms
of retail activity with the exception of general merchandising and tire-battery-
accessory retailers. The identified sales impact on affected business groups is
smaller in magnitude (less than 2%) and shorter in duration (less than 1 year)
than precedent trends defining the operating resiliency of existing retailers and
possess minimal risk of contributing to widespread business failure and attendant
vacancies. The possibility remains that some retail space may be vacated
because one or more existing retailers suffer a business failure. The risk that
vacated space will remain unoccupied over a protracted period is negligible based
on the pace of incremental growth in the retail market, which is expected to
demand 690,000 square feet of added retail space within a year following project
completion and as much as 1.2 million square feet of added space within two
years.
The economic analysis indicates the sales impact on existing hotel facilities
attributed to the project is negligible. Sufficient growth in residual demand for
upscale and midscale-economy lodging is indicated to support 240-rooms of
envisioned hotel activity within the project and still enable existing hotel
operations to achieve an above average level of room-night sale performance.
The risk of lodging business failure and attendant hotel vacancy attributed to the
project is also negligible. Long-term market trends provide a strong indication that
older economy-priced hotels in the Bakersfield Metro Area are under increased
competitive pressure that could contribute to business failure before, during, and
after the development period describing project completion. Incidental hotel
vacancy affecting one or more economy hotels is more correctly attributed to
existing competitive pressure describing shifting traveler preferences in the
Bakersfield lodging market.
The most probable environmental impact that can be attributed to the Bakersfield
Gateway Center is a relatively brief period of vacancy affecting one or more retail
storefront locations in the surrounding Bakersfield Metro Area. The likely impact
corresponding to the vacancy is a diminished level of rental income from the affected
retail property. Incremental growth in retail demand provides a strong indication the
duration of any vacancy will involve a significantly shorter period than needed to bring
about the adverse effects of urban decay. The proposed Bakersfield Gateway Center
can be expected to have a quantifiable economic impact that affects existing retailers
throughout the Bakersfield Metro Area, but no significant environmental impact is
expected in the form of urban decay.
F:\BAKERSFIELD-GATEWAY-URBAN-DECAY_ADMIN-DRAFT\OCTOBER 17, 2014\B
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-1
Chapter III
Retail Market Potential
Project Description
A broad conceptual layout of the Bakersfield Gateway Center is illustrated in Exhibit
III-1. The general configuration combines commercial elements of a power retail
center, pad-convenience retail, entertainment-leisure retail, and lodging on a single
site. Also highlighted in Exhibit III-1 is a conceptual physical arrangement of the
commercial elements, which are further summarized below.
Bakersfield Gateway - Overview
Commercial Leasable
Land Use Element Area (SF)
Anchored Retail 646,000
Pad-Conv-Service Retail 34,000
Ent-Leisure Retail 120,000
Project Retail 800,000
Hotel Lodging 84,000
Site Development Overall 884,000
Source: Alfred Gobar Associates
The specific design for the Bakersfield Gateway Center remains conceptual in nature
and has been illustrated for purpose of evaluating the environmental impacts (traffic,
noise, urban decay, etc.) associated with the scope and scale of development. Given
the conceptual nature of the site design, site specifics such as architecture motif,
lease space sizing, and building configurations are similarly defined in broad generic
terms within the overall limits of the entitlement request for 800,000 square feet of
leasable retail area. Consequently, the specific market focus of a hotel operation or
detailed tenant mix describing retail activities within the project has not been
established. It is too early in the development process to undertake an extensive
tenant solicitation and leasing effort in order to formulate a detailed description of the
lodging operators and retail tenants likely to occupy the center. To date, the Bass
Pro Shops is the only tenant with a signed a letter of intent to occupy roughly 60,000
square feet within the anchored retail portion of the site.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-2
For purpose of this analysis the project has been characterized in terms of a baseline
and modified retail merchandising focus and in terms of a mix of storefront floor space
and 2014 equivalent sales activity that can be reasonably expected.
Bakersfield Gateway Center - Comparison of Baseline & Modified Retail Focus
Baseline Focus Modified Focus2 Baseline vs Modified
Leasable 2014 Equiv.Leasable 2014 Equiv.Leasable 2014 Equiv.
Project Land Use Activity Bldg Area Gr Sales Bldg Area Gr Sales Bldg Area Gr Sales
(Sq Ft)($000's)(Sq Ft)($000's)(Sq Ft)($000's)
Retail Merchandising 701,000 $204,495 701,000 $210,570 - ($6,075)
GAFO Products1 526,000 148,220 466,000 129,620 60,000 18,600
Building Materials 120,000 36,000 120,000 36,000 - -
Drug-Sundry-Food-Grocery - - 60,000 24,675 (60,000) (24,675)
Dining-Snack Services 45,000 17,775 45,000 17,775 - -
Auto Parts/Supply/TBA 10,000 2,500 10,000 2,500 - -
Retail Ent-Leisure-Service 99,000 $6,440 99,000 $6,440 - $0
Consumer Finance/Banking 4,000 740 4,000 740 - -
Cinema (14-16 Screens)60,000 4,250 60,000 4,250 - -
Fitness-Recreation 35,000 1,450 35,000 1,450 - -
Retail Land Use Activity 800,000 $210,935 800,000 $217,010 - ($6,075)
Lodging Activity (240 Rooms)84,000 5,760 84,000 5,760 - -
Bakersfield Gateway Center:884,000 $216,695 884,000 $222,770 - ($6,075)
Note:
1 GAFO - includes General Merchandise, Apparel, Furnishings, & Other Specialty Products
2 Modified retail focus includes a Supermarket & Drug Store and reduced amount of GAFO
Source: Alfred Gobar Associates; HTH Architects
The baseline retail focus described above characterizes a commercial venue with a
heavy regional-oriented mix of retail merchandising and entertainment-leisure
activities. The modified focus is very similar to the baseline focus but is distinguished
by the inclusion of space for a drug store and grocery store and corresponding
reduction in GAFO merchandising space. GAFO is a retailing term that refers to the
sale of general merchandise (G); apparel, shoes & accessories (A); furniture, home
furnishings & appliances (F); and other specialty-miscellaneous products (O) such as
sporting goods, fabrics, hobbies & crafts, etc.
The above project description of retail activities and corresponding building area is
based on the Consultant’s assessment of the site conceptual plan prepared by HTH
Architects; in-field observation of anchor-store tenants within existing Bakersfield
retail centers; and shopping center design and performance survey data compiled by
the Urban Land Institute and International Council of Shopping Centers (ULI-ICSC).
Exhibit III-2 provides a summary of normative space configuration and sales
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-3
performance benchmarks for distinct types of shopping centers describing
contemporary retailing immediately preceding the Great Recession. As the
storefront, floor area, and sales mix data indicates, not all shopping centers are the
same. As shown, the mix of store-group activities varies based on the development
scale and retail focus of the center. GAFO merchandising accounts for an increased
share of storefronts, floor area, and overall sales among regional oriented retail
centers. Conversely, the merchandising of drug & sundries, food & groceries, and
building materials accounts for a larger share of retail floor space and sales activity in
neighborhood and community serving retail centers. Consumer-Entertainment
services fluctuate as a share of floor space and sales activity among the retail venues
identified but largely consist of consumer-personal service activities (hair salon, tax
accounting, real estate, etc.) within neighborhood-oriented centers and greater share
of entertainment-based activities (movie theater, health club, specialized recreation,
etc.) within community and regional-oriented venues. The general layout of the
Bakersfield Gateway Center reflects a hybrid mix of retailing activities.
It is expected the Bakersfield Gateway Center will be built in two phases. 2016 is
identified as the first full year of operation for Phase 1, with 2019 as the first full year
of operation for Phase 2. A conceptual phasing program is identified below.
Bakersfield Gateway Center - Phasing & Retail Focus Comparison
Community-Regional (Baseline)Added Neighborhood (Modified)
Phase 1 Phase 2 Overall Phase 1 Phase 2 Overall
Project Land Use Activity Bldg Area Bldg Area Bldg Area Bldg Area Bldg Area Bldg Area
(Sq Ft)(Sq Ft)(Sq Ft)(Sq Ft)(Sq Ft)(Sq Ft)
Retail Merchandising 353,000 348,000 701,000 353,000 348,000 701,000
GAFO Products1 196,000 330,000 526,000 196,000 270,000 466,000
Building Materials 120,000 0 120,000 120,000 0 120,000
Drug-Sundry-Food-Grocery 0 0 0 0 60,000 60,000
Dining-Snack Services 27,000 18,000 45,000 27,000 18,000 45,000
Auto Parts/Supply/TBA 10,000 0 10,000 10,000 0 10,000
Fin-Ent-Leisure Services 99,000 0 99,000 99,000 0 99,000
Banking Services 4,000 0 4,000 4,000 0 4,000
Cinema (14-16 Screens)60,000 0 60,000 60,000 0 60,000
Fitness-Recreation 35,000 0 35,000 35,000 0 35,000
Retail-Dining-Leisure Activity 452,000 348,000 800,000 452,000 348,000 800,000
Lodging Activity (240 Rooms)42,000 42,000 84,000 42,000 42,000 84,000
Bakersfield Gateway Center:494,000 390,000 884,000 494,000 390,000 884,000
Note:
1 GAFO - includes General Merchandise, Apparel, Furnishings, & Other Specialty Products
2 Modified retail focus includes a Supermarket & Drug Store and reduced amount of GAFO
Source: Alfred Gobar Associates; HTH Architects
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-4
Overall, about 452,000 square feet of leasable retail area will be included in Phase 1,
with another 348,000 square feet in Phase 2. The quantity and mix of retail space
describing Phase 1 is identical for both the baseline and modified retail focus. For
Phase 2, the modified retail focus of is distinguished from the baseline retail focus by
a 15,000 square foot drug-store and 45,000 square foot grocery-store (60,000 square
feet for both combined) and corresponding reduction in floor area for GAFO retail.
In order to determine the retail impact of the Bakersfield Gateway Center it is also
necessary to identify a probable scenario of sales performance describing on-site
retail activity. Historically, the total number of retail establishments competing for
sales support in all markets has increased in response to population gains and
corresponding spending potential. By comparison, effective sales performance per
unit has not increased, but instead has slowly declined with the corresponding
increase in retail competitors. Constant dollar (inflation adjusted) per establishment
sales for nearly all store-group activities in California have been slowly declining as
summarized below.
Historical Sales Growth Per Establishment
State of California
1990-12 1990-00 2000-08 2008-12 2012
Retail Store-Group Activity CAGR CAGR CAGR CAGR $/Estab
Apparel, Shoes & Accessories 1.1%1.4%0.4%1.2%$457
General Merchandise (3.0%)(6.5%)(8.8%)0.0%2,913
Drugs & Personal Health Care (2.3%)(2.4%)(2.1%)(3.3%)1,139
Grocery & Beverage (1.4%)(1.6%)(1.4%)(1.9%)829
Beer, Wine, & Liquor (0.9%)(1.3%)(0.8%)(0.9%)533
Eating and Drinking 0.0%(0.2%)(0.8%)0.3%625
Home Furn-Elect-Appl 1.2%1.0%(0.7%)1.9%589
Bldg Mat & Garden Supplies 0.6%2.5%(2.1%)(1.4%)1,592
Auto Dealers and Auto Supplies (2.7%)(5.4%)(7.8%)(0.5%)1,823
Service Stations 3.8%8.3%4.7%0.3%5,806
Other-Specialty Retail (3.5%)(2.8%)(3.3%)(6.1%)170
All Retail Stores (1.2%)(1.5%)(2.2%)(1.4%)$705
Note: CAGR based on 2012 Constant Dollar values for reference period
Source: Alfred Gobar Associates; California State Board of Equalization
The per store sales trends described above offer reasonable assurance that the latest
available per square foot sales data compiled by ULI-ICSC (as late as 2008) provides
a relevant initial reference point for estimating future sales performance of retail
activity within the Bakersfield Gateway Center. Invariably, future sales performance
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-5
will not reflect historic sales performance indicated by the ULI-ICSC survey data or
the above estimate of 2014 equivalent sales. Exhibit III-3 describes a conceptual
vision of phasing, floor area mix, and sales performance for Phase 1, Phase 2, and
the completed Bakersfield Gateway Center based on the regional-oriented (baseline)
retail focus. Identified sales per square foot for each store-group activity assumes a
modest 0.5% to 1.5% increase in sales performance through 2019 (in contrast to
historic declines in per establishment sales throughout California). The floor area mix
and target level of sales used to characterize a completed Bakersfield Gateway
Center during the first full year of operation (2019) is summarized below for each
alternative retail focus.
Bakersfield Gateway Center - 2019 Phased Completion Summary
Baseline Focus Modified Focus2
Leasable 2019 Equiv.Leasable 2019 Equiv.
Project Land Use Activity Bldg Area Gr Sales Bldg Area Gr Sales
(Sq Ft)($000's)(Sq Ft)($000's)
Retail Merchandising 701,000 $211,306 701,000 $217,576
GAFO Products1 526,000 153,496 466,000 134,416
Building Materials 120,000 36,960 120,000 36,960
Drug-Sundry-Food-Grocery 0 0 60,000 25,350
Dining-Snack Services 45,000 18,270 45,000 18,270
Auto Parts/Supply/TBA 10,000 2,580 10,000 2,580
Fin-Ent-Leisure Services 99,000 $6,740 99,000 $6,740
Banking Services 4,000 760 4,000 760
Cinema (14-16 Screens)60,000 4,440 60,000 4,440
Fitness-Recreation 35,000 1,540 35,000 1,540
Retail-Dining-Leisure Activity 800,000 $218,046 800,000 $224,316
Lodging Activity (240 Rooms)84,000 6,216 84,000 6,216
Bakersfield Gateway Center:884,000 $224,262 884,000 $230,532
Note:
1 GAFO - includes General Merchandise, Apparel, Furnishings, & Other Specialty Products
2 Modified retail focus includes a Supermarket & Drug Store and reduced amount of GAFO
Source: Alfred Gobar Associates; HTH Architects
As shown, gross retail sales (taxable and non-taxable) during the 2019 operating
period is projected to range from $218M to $224M.
Functional Role of Bakersfield Metro Area
Bakersfield is the 11th largest city in California and largest Metro Area in the southern
section of the Central Valley. Bakersfield plays an important role as the
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-6
administrative seat of Kern County. Bakersfield is also located equal distance
between Fresno and Los Angeles and hosts the largest concentration of housing,
education, employment, cultural, shopping, and entertainment facilities in Kern
County and the lower Central Valley. When complete, the Bakersfield Gateway
Center will constitute the third largest commercial center within the Bakersfield area
with approximately 800,000 square feet of leasable retail space. As such, the market
area focus of the proposed project is regional in nature and can be best understood
by examining recent trends affecting retail growth in general and the competitive role
of the Bakersfield Metro Area in serving consumer needs of the City of Bakersfield
and surrounding rural areas of Kern County.
The retail industry continues to recover and has steadily regained losses and declines
imposed by the Great Recession as shown below.
Index of Selected Trends Describing Overall Taxable Retail Sales - California
Note:Illustrated trends indexed to 2007 (Peak year of retail employment preceeding Great Recession). Trends reflect estimate
of 2013 conditions and projection of 2014 conditions; shaded areas indicate period of economic contraction
Source: CA-SBOE; CA-EDD; CA-DOF; USCensus-County Bus Patterns; Alfred Gobar Associates
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
In
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e
x
o
f
2
0
0
7
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o
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i
t
i
o
n
s
Taxable Retail Sales Retail Permits Retail-Dining Emp Sales Per Emp
Overall, retail suffered the largest decline in total taxable sales and corresponding
sales per retail employee, while the total number of retail establishments and retail
workers also fell sharply in 2008 and 2009. Since 2010, the total supply of retail
establishments and workers has effectively recovered to pre-recession levels while
constant dollar (inflation-adjusted) sales and corresponding sales per employee
continue to rebound but at a more moderate pace.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-7
Exhibit III-4 provides a comparison of sales per capita and sales per establishment
describing the City of Bakersfield, Kern County, the 6-County Southern California
Region, and State of California during 2012 (latest available annual data). The
overall and detailed comparison data underscores the important role played by the
City of Bakersfield (Bakersfield Metro Area) in serving retail demand throughout the
broader geographic region. For purpose of this analysis, the Bakersfield Metro Area
can be reasonably defined by the geographic region used to formulate the Metro
Bakersfield General Plan, adopted in April 2009 as a joint long-term planning effort by
the City of Bakersfield and Kern County. From a practical standpoint the Bakersfield
Metro Area includes the City of Bakersfield and adjacent developed areas within
unincorporated County territory. Due to data reporting methods used by the SBOE, it
is not feasible to disaggregate available data to precisely describe retail activity for
the Bakersfield Metro Area. For this reason, the City of Bakersfield is used as an
approximate measure of the competitive role played by the larger Bakersfield Metro
Area. This data limitation does not materially alter the overall assessment of
competitive influence, since the City of Bakersfield hosts virtually all significant retail
development existing within the Bakersfield Metro Area.
The City of Bakersfield is a component part of Kern County, yet the comparison data
shown in Exhibit III-4 indicates a dichotomy of retail performance distinguishing these
two geographic reference areas. To a large extent, per capita and per establishment
retail performance describing Kern County as a whole significantly lags below the
corresponding Statewide average (brown shaded values), while the same
performance measure describing the City of Bakersfield significantly exceeds the
Statewide average (blue shaded values). Strong sales performance at the City level
reflects the relative attraction of the Bakersfield Metro Area as a shopping destination
for consumers residing within the City itself and throughout the surrounding Kern
County Region.
The long-standing role of the Bakersfield Metro Area as a destination retail location is
further evidenced by a high level of constant dollar (inflation-adjusted) per capita
sales achieved for all retail store-groups during the past 11 years (see chart below).
For purpose of comparing County versus Metro Area sales performance, per capita
sales is a measure of the volume of sales activity captured within a given geographic
area versus the actual spending behavior of individual consumers (total sales divided
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-8
by the underlying resident population). In 2012, effective per capita sales within the
City of Bakersfield was equal to $8,059 (excluding automobile and fuel sales), versus
$5,129 for the County as a whole, and $3,028 for portions of Kern County outside the
City of Bakersfield. In effect, Metro area retailers capture roughly 2.7 times greater
volume ($8,059 divided by $3,028) of sales support per consumer resident than is
true of retailers located in the surrounding unincorporated areas of Kern County.
Per Capita Sales Trends for All Retail Activity (Excluding Fuel & Auto Sales)
Source: State Board of Equalization; CA-Department of Finance; Alfred Gobar Associates
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Bakersfield Kern County Southern California California
Despite the relative attraction of the Bakersfield Metro Area as a retail destination
within Kern County, the actual supply of storefront competitors is not keeping pace
with the growing consumer population (see chart below). Prior to the Great
Recession, the incidence of retail competitors (store permits per 1,000 population)
equaled or exceed incidence rates describing the retail industry throughout the State
of California and the 6-County Southern California region. Since the onset of the
Great Recession and during the subsequent recovery period, the incidence of
storefront permits per 1,000 population within the City of Bakersfield and throughout
Kern County has declined and remains stagnated at levels far below the Statewide
rate of retail storefront representation.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-9
Retail Establishment Growth Trends For Selected Regions
Source: State Board of Equalization; CA-Department of Finance; Alfred Gobar Associates
7.0
8.0
9.0
10.0
11.0
12.0
13.0
14.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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Bakersfield Kern County Southern California California
The low incidence of retail storefront permits within the City and throughout the
County is an indication the retail market has been slow to respond to growing
consumer demand. During the recession, the Bakersfield-Delano MSA did not suffer
the same proportionate drops in payroll employment as did by many metropolitan
areas throughout California and the mid-term outlook for economic recovery and
growth in the region is very good. A recent study (U.S. Metro Economies – June
2014) presented by IHS Global (a nationally recognized business & economics
research group) at the U.S. Conference of Mayors identifies the Bakersfield-Delano
MSA as the 68th largest metro economy within the US ($35.2 Billion in 2013 GMP-
Gross Metro Product) but 14th among all metro areas in terms of the expected rate of
GMP growth (4.1% annually) between 2013 and 2020.
Bakersfield Gateway Center Retail Trade Area
The scale of development proposed for the Bakersfield Gateway Center combined
with the dominant role played by the Bakersfield Metro Area in serving retail demand
from all of Kern County, provides a good indication that sales support for on-site
activity will have a regional-orientation. Exhibit III-5 illustrates the trade area region
providing the primary base of support for project retail activities. The illustrated trade
area reasonably conforms to the geographic boundary describing the Metro
Bakersfield General Plan (jointly adopted by the City and County in April 2009). The
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-10
trade area describes the geographic boundary from where a majority of sales support
for project retail activity will originate. Because the Bakersfield Gateway Center is
expected to function as a regional serving venue, it is also expected to receive a
component of sales support from consumers living throughout Kern County.
Within large metropolitan regions of the Pacific-Southwest, the relevant trade area for
contemporary forms of retail development can be generally described as follows:
Typical Trade Area Settings
Classification of
Retail Development
Relevant
Trade Area
Convenience Center 0.5 to 1.0 Mile
Neighborhood Center 1.5 to 2.0 Mile
Community/Power Center 3.0 to 5.0 Miles
Regional Center 5.0 to 7.0 Miles
Super-Regional Center 5.0 to 10.0 Miles
Outlet/Festival Center 50.0 Miles Minimum
Source: Alfred Gobar Associates
These generalized trade area settings are most appropriate for retail venues within
larger metropolitan settings (2.0+ million) characterized by urban population densities
(4,000+ persons per square mile). The project trade Area setting is best described as
a modestly sized lower-density metro market surrounded by an expansive rural area.
Population data describing the Bakersfield Metro Area is compared against other
geographic reference areas below.
Bakersfield Gateway Trade Area Setting
Selected Reference Area
City of Bakersfield County of State of
Criteria 3 miles Bakersfield Metro Area Kern California
2000 Population 51,150 253,562 407,389 661,649 33,871,648
2013 Population 82,461 359,350 550,164 863,589 37,905,036
Pop Per Sq Mi 2,900 2,500 1,400 300 700
2000-13 CAGR 3.74%2.72%2.34%2.07%0.87%
Source: ESRI ArcGIS; Alfred Gobar Associates
Lower density metro markets and rural areas invariably require retail operators to
compete within a larger trade area setting than is typical for urban density metro
markets. An expanded trade area setting is necessary for two reasons. First, the
lower population density translates to a lower incidence of demand per unit of
geography served, thereby requiring a larger geographic area to be served in order to
capture a level of sales sufficient to warrant retail operations. Second, the challenge
associated with a scarcity of consumers is amplified in a rural market setting, thereby
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-11
requiring consumers to travel longer distances in order to reach a venue where the
massing of retail operators is warranted.
Finally, the population base of the Bakersfield Metro (about 550,000 residents)
indicates it will continue to function as a single-cell trade area for regional-oriented
retail development. Quartering up the Bakersfield Metro Area into mutually exclusive
trade areas based on the geographic location of the largest existing retail
concentrations (Valley Plaza Center, East Hills Center, Northwest Promenade, etc.)
effectively ignores an overlap of consumer support that must be realistically
recognized to characterize the competitive influence of regional-serving retail centers
in this metro-market area.
Trade Area Consumer Characteristics
Selected demographic characteristics describing resident consumers within the
Bakersfield Metro Area and other selected geographic regions (3-Mile Ring, City of
Bakersfield, Kern County, and State of California) are summarized in Exhibit III-6.
Identified population and demographic characteristics describe 2013 mid-year
conditions based on the latest available statistical estimates from ESRI.com (a
commercial data purveyor) as of the date of the in-field audit for this analysis (April-
2014). Demographic conditions described are based on the 2010 Census, American
Community Survey – 5 Year Estimates, Dunn & Bradstreet business analytics, and
other business analysis data sources. The demographic conditions described in
Exhibit III-6 provide a reasonably good assessment of selected consumer
characteristics expected to influence retail support potential over a near-term (1-2
years) to mid-term (3-6 years) time frame. Absolute increases in consumer
population are addressed more directly in the discussion of population growth below.
Selected demographic characteristics of area consumers expected to influence retail
potential are summarized below.
The Bakersfield Metro Area (Metro Area) is characterized by a relatively strong
family household orientation. About 75% of Metro Area households and 83% of
households within 3 miles of the project are comprised of family members
compared to 69% for the State. A high incidence of families indicates the
presence of dependent children that influences consumer purchase decisions.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-12
The Metro Area is relatively young, with a median age of 30.3 years compared to
35.4 years for the State. The younger median age reflects a relatively large share
of children under 15 years of age (25.8%) compared to the State (20.1%) but
lower proportion of seniors 65 years and older (9.0% versus 12.2%).
The Metro Area reflects a slightly more heterogeneous population mix than the
State as a whole. The share of Metro Area consumers that self-identify as White
(57.5%), Black (6.1%), or Multiple Race (4.9%) compares with the State, while
Asian is substantially lower (4.6%) than the State (13.3%). The Metro Area
includes a notably higher share of consumers that self-identify as Some Other
Race Alone (25.3% versus 17.6%) and of Hispanic/Latino ethnicity (51.4% versus
39.0%). Very strong racial or ethnic concentrations can provide an indication of
cultural preferences, particularly for food and grocery items.
The rate of workforce participation (payroll workers, self-employed workers, and
family-run businesses) throughout Kern County and the Metro Area is slightly
lower than is true of the State. When measured in terms of household population
(total population less group quarter population), there are 411 workers per 1,000
population in the Metro Area compared to 455 workers per 1,000 population
describing the State. In contrast, the ratio of workers per household within the
Metro Area (1.31 workers per household) compares very closely to the State
(1.32 workers per household). The lower ratio of workers per population is an
indication of the strong family orientation of Metro Area consumer households.
Workforce participation offers insight about the per capita income level that
describes a market trade area. Per capita income is an indicator of overall
consumer wealth and capacity for “discretionary” versus “subsistence” type
purchase decisions.
The level of per capita income describing the Metro Area ($21,370 per capita) is
significantly lower than is true for the State ($28,800 per capita). Per capita
income provides an indication about the capacity to support retail demands of all
household consumers (including household workers and dependents). The
median level of household income describing the Metro Area is about $49,370 per
year, meaning one-half of households report a higher level and one-half report a
lower level. The median income level of Metro Area households is about 15%
below the corresponding income level for the State ($58,900 per year). The lower
median household income that describes the Metro Area combined with a larger
average household size (with a high incidence of family households) are factors
that contribute to a significantly lower level of per capita income. The effect of
household income on consumer spending is an important consideration in
estimating consumer support potential within the Bakersfield Metro Area
(discussed later below).
Trade Area Population Growth
For purpose of this analysis, 2016 and 2019 is used to describe the first full year of
operation for phased development describing the Bakersfield Gateway Center.
Shown below are three alternate population growth projections through 2025. The
alternate projections include: a county-level projection prepared every 2-years by the
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-13
California Department of Finance; a 2009 growth outlook projection prepared by Kern
County Council of Governments as part of its long-term transportation planning
mission; and an independent projection prepared by Alfred Gobar Associates based
on a 2020 employment estimate from the California Employment Development
Department.
Historcial & Projected Population Growth - Kern County
Source:Calif Dept of Finance-Demographic Research P1 Projections; Kern County Council of Govts
2009 Growth Outlook Calif Employment Development Department 2020 Industry Employment
Projections; Alfred Gobar Associates
600
650
700
750
800
850
900
950
1,000
1,050
1,100
1,150
1,200
1,250
1,300
20
0
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Kern County-DOF P1 Kern County-COG Kern County-EDD Based
For purpose of this analysis, special consideration is given to the population
projection based on employment growth. Employment is a key factor driving
household formation and corresponding income needed to support retail spending. In
addition, the historic and projected outlook of employment growth for Kern County is
quite positive, even based on 2012 post-recession projections prepared by the State
as shown below.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-14
Civilian Employment Growth Trends
Source: California Employment Development Department; Alfred Gobar Associates
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
19
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California Kern Co
The ratio of jobs per 1,000 population has fluctuated with economic cycles but the
ratio of Kern County non-farm jobs per 1,000 population has been trending downward
over the past 20 years as shown below.
Historcial & Projected Employment Growth - Kern County
Source:Calif Dept of Finance-Demographic Research Section; Calif Employment Development
Department 2020 Industry Employment Projections; Alfred Gobar Associates
240
250
260
270
280
290
300
310
320
330
0
50
100
150
200
250
300
350
400
450
19
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Kern Co Non-Farm Jobs Kern Co Farm & Self-Emp Jobs Non-Farm Jobs Per 1,000 Pop
The declining Jobs-Pop ratio likely reflects a social emphasis on the traditional family
unit characterized by a primary bread-winner and also a greater reliance on self-
employed and family-business jobs in the post-recession era. The historical trend
describing the relationship between payroll jobs and population results in a more
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-15
conservative outlook of population growth than the alternate projections prepared by
the State Department of Finance or Kern COG. For purpose of this analysis, the
more conservative EDD-based projection summarized below is used to evaluate
future retail potential.
Bakersfield Metro Area Projected Household Population (000's)
Alternative Projection 2010 2012 2014 2016 2019 2022 2025
DOF 2010-50 P1 Projection 532.8 543.0 566.0 598.7 651.1 704.7 744.2
Kern COG Projection 535.1 557.2 572.3 591.1 620.5 651.3 683.7
EDD-Based Projection 532.8 543.0 557.8 575.6 602.4 633.8 665.4
Source:Calif Dept of Finance-Demographic Research P1 Projections; Kern County
Council of Govts 2009 Growth Outlook Calif Employment Development
Department 2020 Industry Employment Projections; Alfred Gobar Associates
Consumer Spending Potential
Consumer demand for retail products within a defined trade can be estimated on the
basis of observed per capita spending for a selected reference area. Four important
factors influence the relevant reference area that should be used to gauge per capita
spending potential. First, it is necessary to have regular and reliable reporting of
retail spending activity within the selected reference area. Second, the reference
area should host a sufficient base of retailers that offer a full range of retail products
and services demanded across the spectrum of income levels represented. Third,
the reference area should cover a sufficiently large geographic area to capture the
vast majority of daily spending activity by area residents. Fourth, the income
distribution of reference area households should reasonably reflect the corresponding
income distribution in the subject trade area.
Alfred Gobar Associates relies on taxable retail sales data reported by the SBOE for
the State of California and each individual county since taxable sales data reflects
actual expenditure by consumers for distinct retail product groups. Not all consumer
spending behavior is the same across all market regions. The mix and volume of
retail sales activity describing San Francisco County alone or Imperial County alone is
unlikely to provide an adequate measure of consumer spending behavior in the
Bakersfield Metro Area. By comparison, the retail base within a City level reference
area invariably is too small to fully reflect the spectrum of sales activity describing
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-16
consumer demand. Many individual counties within inland California also host a
limited retail base. SBOE data suggests the retail base of Kern County, despite its
large geographic expanse and population base nearing 900,000, does not fully satisfy
consumer demand (see chart below). Based on Statewide average per capita
spending levels, Kern County as a whole fails to satisfy between 13% and 26% of
consumer spending potential, depending on whether or not the sale of motor vehicles
and fuel is considered. The level of retail sales outflow shown below for Kern County
is modestly overstated because income distribution that describes Kern County and
the Bakersfield Metro Area is not the same as the State overall.
Shown below is the household income distribution for the Bakersfield Metro Area,
Kern County, and State of California.
Kern County Taxable Sales Flow Based On Statewide Potential
Taxable Retail Sales ($000)Inflow or (Outflow) of Potential
Retail Store-Group Activity Actual Potential1 ($000)% of Potential
Apparel, Shoes & Accessories $348,403 $730,557 ($382,154)(52.3%)
General Merchandise 1,081,876 1,128,803 (46,927)(4.2%)
Drugs & Personal Health Care 121,539 150,045 (28,506)(19.0%)
Grocery & Beverage 488,736 475,079 13,657 2.9%
Beer, Wine, & Liquor 34,367 78,338 (43,971)(56.1%)
Eating and Drinking 910,760 1,332,925 (422,164)(31.7%)
Home Furn-Elect-Appl 266,164 557,260 (291,096)(52.2%)
Bldg Mat & Garden Supplies 586,099 619,488 (33,389)(5.4%)
Auto Dealers and Auto Supplies 1,371,696 1,389,606 (17,911)(1.3%)
Service Stations 1,773,711 1,309,644 464,067 35.4%
Other-Specialty Retail 541,877 838,762 (296,885)(35.4%)
All Retail Stores $7,525,227 $8,610,507 ($1,085,280)(12.6%)
All-Excld Auto Sales-Fuel $4,379,820 $5,911,257 ($1,531,436)(25.9%)
1 Based on the overall average per capita retail sales for State of California and the estimated mid-2012 population base:
County population estimate for mid-12 = 853,944 persons.
Source: Alfred Gobar Associates; California State Board of Equalization
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-17
Bakersfield Metro Area - Household Income Distribution
Source: ESRI; Alfed Gobar Associates
0%
4%
8%
12%
16%
20%
Under
$15,000
$15,000 -
$24,999
$25,000 -
$34,999
$35,000 -
$49,999
$50,000 -
$74,999
$75,000 -
$99,999
$100,000 -
$149,999
$150,000 -
$199,999
$200,000
Plus
Sh
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H
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s
Household Income Range
California Kern County Bakersfield Metro Area
Household income distribution of the Bakersfield Metro Area is distinguished from the
State by a notably higher share of households with income below $50,000 per year.
The Bakersfield Metro Area is distinguished from Kern County by a modestly higher
share of households with income above $75,000 per year.
For purpose of this impact analysis, the income distribution of area households is
considered in estimating consumer expenditure potential. While the State of
California offers a good broad-based geographic reference to estimate per capita
spending, the overall income profile of the State includes a larger share of higher
income households and suggests a State-based estimate is likely to overstate market
potential. Conversely, estimating consumer potential based strictly on Kern County
per capita spending is likely to understate market potential.
Household income is an important measure of consumer support potential because
retail purchase decisions are strongly influenced by the amount of income available to
meet consumption needs and desires of all household members. The relationship
between income and consumer spending is characterized in Exhibit III-7 based on the
latest survey of household expenditures by the Bureau of Labor Statistics, which has
been further adjusted to account for actual taxable retail sales in California. As
shown, the overall level of taxable retail spending is strongly influenced by the
household income level. Lower income households spend a higher share of total
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-18
income on retail purchases than is true of higher income households but the absolute
level of spending is lower due to the lower income. The income-spending relationship
illustrated in Exhibit III-7 does not account for household size and corresponding
effect on per capita spending potential.
For purpose of this analysis, consumer spending and market potential is described in
terms of major store-group activities that reflect retail activity within the project.
Estimated store-group potential is based on the most detailed level of sales activity
reported by the SBOE, subsequently summarized by store-group classification.
Exhibit III-8 illustrates the methodology used to translate SBOE detailed reporting
data into store-group classifications used to evaluate the Bakersfield Gateway center.
Historic spending trends and the near-term to mid-term outlook of per capita spending
is illustrated below for the Bakersfield Metro Area and other selected geographic
regions.
Annual Per Capita Spending Trends and Potential
Note:Indicated potential reflects taxable & non-taxable per capita spending, excluding automobile and gasoline purchases.
illustrated spending levels based on 2012 inflation-adjusted constant dollar reporting data.
Source: State Board of Equalization; Department of Finance; Employment Development Department; Alfred Gobar Associates
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
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0
California Southern California Kern County Bakersfield Metro Area
The above historical trend shows the level of per capita spending in the Bakersfield
Metro Area briefly rivaled per capita spending for the State as a whole before
plunging with the onset of the Great Recession. Until 2012, the recovery in per capita
spending within the Bakersfield Metro Area generally lagged corresponding spending
growth for the State as a whole, despite a relatively faster pace of employment
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-19
growth within Kern County. Retail employment data through 2014 combined with a
strong outlook for regional employment growth suggests overall per capita spending
within the Bakersfield Metro Area can be expected to increase more rapidly than the
State before growing at a more moderate pace after 2016. Despite this optimistic
outlook of near-term per capita spending growth, the mid-term outlook suggests per
capita spending within the Bakersfield Metro Area will not reach the 2006 peak-year
spending level until 2020 or beyond.
Based on the above general outlook of per capita spending growth, corresponding
spending potential of Bakersfield Metro Area consumers is identified in Exhibit III-9.
As shown, overall per capita spending describing the Bakersfield Metro Area during
2016 is projected to lag the corresponding spending level for the State as a whole by
about 10%. By 2019, the overall gap expected to decrease to about 9%, as regional
employment and economic growth drive a moderately faster pace of per capita
spending growth over the mid-term. The longer term outlook is for per capita
spending potential is remain roughly 9% lower than the State as a whole. The
projected outlook of spending potential describing Bakersfield Metro Area consumers
is summarized below.
Per Capita Spending Potential
2016 Consumer Potential 2019 Consumer Potential
Retail Store-Group Category State Metro Area State Metro Area
GAFO Retail Activity 3,497$ 3,211$ 3,678$ 3,407$
General Merchadising 1,644 1,571 1,729 1,667
Apparel & Accessories 887 785 933 833
Furniture & Hshld Appl/Elect.573 507 603 538
Other Specialty Retail 393 348 414 369
Building Materials 763 676 803 717
Drug & Sundries 564 492 594 522
Food & Groceries 1,818 1,616 1,912 1,715
Eating & Drinking 1,857 1,691 1,953 1,794
Auto Parts & Accsy 213 184 224 196
Misc-Other Retail 979 883 1,030 937
Retail & Dining (Auto-Fuel Excld)9,692$ 8,754$ 10,194$ 9,287$
Service stations 1,778 1,569 1,870 1,665
Auto & Vehicle Sales 1,757 1,581 1,848 1,677
Retail & Dining (Auto-Fuel Incld)13,227$ 11,904$ 13,912$ 12,629$
Source: Bureau of Labor Statistics - Household Expenditure Survey; State Board of
Equalization; Department of Finance; Alfred Gobar Associates
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-20
Existing Retail Facilities
Alfred Gobar Associates conducted and in-field audit of anchor-scale retail storefronts
during March and April of 2014 to determine the supply and mix of retail uses
expected to compete most directly with the Bakersfield Gateway Center for consumer
support. For purpose of this analysis, anchor-scale retail generally includes stores
that occupy at least 10,000 square feet. Anchors constitute an important focus of this
impact analysis because such retailers most often compete within a broader trade
area in order to attract sufficient sales support to warrant large product inventories
and volume-discount pricing practices that characterize larger scale storefronts. The
retail component of the Bakersfield Gateway Center will be dominated by anchor-
scale space designed to host larger scale storefront operations.
In all, over 300 retail storefront locations were audited throughout the Bakersfield
Metro Area, representing over 10.0 million square feet of anchor space. A summary
of the supply and distribution of anchor storefronts audited throughout Bakersfield
Metro Area is identified in Exhibit III-10 and further summarized below.
Retail Anchors Within Bakersfield Metro Area
City of Bakersfield Adjacent County Area Total For Metro Area
Retail Storefront Anchor Storefront Anchor Storefront Anchor
Store Group Locations Floor Area Locations Floor Area Locations Floor Area
General Merchdse 49 3,082,106 12 212,932 61 3,295,038
Apparel & Accsy 19 387,580 5 71,255 24 458,835
Furn-Elect-Appl 27 465,167 5 48,805 32 513,972
Other Specialties 27 568,009 1 5,727 28 573,736
Home Impvt-Misc 29 1,297,725 3 29,762 32 1,327,487
Pharmacy & Drug 25 411,575 9 138,187 34 549,762
Food & Grocery 36 1,488,005 9 280,518 45 1,768,523
Auto Parts-Tires-Etc 0 0 0 0 0 0
Pers-Leisure Svcs 24 663,956 0 0 24 663,956
Bus-Prof-Other Svcs 7 152,752 0 0 7 152,752
Vacant 19 697,411 2 35,654 21 733,065
Total:262 9,214,285 46 822,840 308 10,037,124
Source: March-April 2014 field audit by Alfred Gobar Associates
In general, only about one-eighth of all retail anchor space is located within 3 miles of
the project site, while one-half is located at least 5 miles from the site. As shown
above, about 85% of all anchor storefronts and 92% of anchor space is located within
the City of Bakersfield. For purpose of evaluating retail potential, auto parts stores,
tire-battery-accessory (TBA) shops, restaurants, beverage-snack shops, personal
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-21
service shops, consumer-repair service shops, and other smaller retail storefronts are
generally treated as non-anchor storefronts. A detailed listing of the anchor
storefronts audited as part of this analysis is provided in Exhibit III-11. The overall
supply of anchor space identified in the Exhibit III-11 (9.8 million square feet)
excludes about 237,000 square feet in 10 retail storefront locations occupied by
religious organizations and government assistance agencies normally excluded from
the supply of competing retail facilities.
Retail Expansion and Future Facilities
When the Bakersfield Gateway Center begins operating, it will benefit from an
increase in the trade area consumer population and related retail spending potential.
Similarly, the project will also need to compete against existing retailers achieving an
increased level of same-store sales and an interim increase in the supply of
competing retail facilities. An historical overview of the aggregate supply of existing
retail facilities is illustrated below based on leasing and sale data compiled by the
CoStar Group, a commercial transaction data provider.
Bakersfield Metro Area - Retail Lease Space
Source: CoStar Group; Alfred Gobar Associates
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
22,000,000
24,000,000
20
0
7
3
Q
20
0
7
4
Q
20
0
8
1
Q
20
0
8
2
Q
20
0
8
3
Q
20
0
8
4
Q
20
0
9
1
Q
20
0
9
2
Q
20
0
9
3
Q
20
0
9
4
Q
20
1
0
1
Q
20
1
0
2
Q
20
1
0
3
Q
20
1
0
4
Q
20
1
1
1
Q
20
1
1
2
Q
20
1
1
3
Q
20
1
1
4
Q
20
1
2
1
Q
20
1
2
2
Q
20
1
2
3
Q
20
1
2
4
Q
20
1
3
1
Q
20
1
3
2
Q
20
1
3
3
Q
20
1
3
4
Q
20
1
4
1
Q
20
1
4
2
Q
Re
n
t
a
b
l
e
B
u
i
l
d
i
n
g
A
r
e
a
(
S
F
)
Freestanding-Other Regional-Power-Community Neighborhood Strip Center
The Bakersfield Gateway Center will add to the supply of regional, power, and
community oriented retail centers identified. Over the past 15 years, numerous
master plan community programs containing residential and commercial tracts have
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-22
been proposed and even approved by the City. In theory, tract map approvals signify
an incremental step toward future increases in the supply of retail facilities. For the
most part residential tracts within approved master plan projects have been recorded
and in various states of completion but many commercial tracts have recently come
under threat of expiring if a final map is not recorded. In July 2013, the State
legislature increased the number of extensions that may be filed to postpone the
ultimate expiration of unrecorded tract maps. For purpose of this analysis,
commercial tracts without corresponding development plans, final maps, and active
marketing program in place are treated the same as the underlying General Plan land
use designation controlling property use rather than a development project actively
moving toward completion. Since 2010, few retail entitlement approvals that have
actually resulted in site development and the corresponding increase in retail facilities
serving the Bakersfield Metro Area has also been very limited as illustrated below.
Bakersfield Metro Area - Retail Space Additions
Source: CoStar Group; Alfred Gobar Associates
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
20
0
7
3
Q
20
0
7
4
Q
20
0
8
1
Q
20
0
8
2
Q
20
0
8
3
Q
20
0
8
4
Q
20
0
9
1
Q
20
0
9
2
Q
20
0
9
3
Q
20
0
9
4
Q
20
1
0
1
Q
20
1
0
2
Q
20
1
0
3
Q
20
1
0
4
Q
20
1
1
1
Q
20
1
1
2
Q
20
1
1
3
Q
20
1
1
4
Q
20
1
2
1
Q
20
1
2
2
Q
20
1
2
3
Q
20
1
2
4
Q
20
1
3
1
Q
20
1
3
2
Q
20
1
3
3
Q
20
1
3
4
Q
20
1
4
1
Q
20
1
4
2
Q
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n
t
a
b
l
e
B
u
i
l
d
i
n
g
A
r
e
a
(
S
F
)
Freestanding-Other Regional-Power-Community Neighborhood Strip Center
During the past 3.5 years, the total supply of retail space in the Bakersfield Metro
Area has only increased by about 175,000 square feet, less than the total amount of
space added in 2010 alone. During 2010, retail completions included a 145,000
square foot Target Greatlands (one of four major anchors within the Valley Plaza
Center) that accounted for 82% of total space added that year. During the first-
quarter 2014, Winco Foods (90,000 square feet) opened as the primary anchor for
Sivercreek Plaza, a community center located on Panama Lane about 3.3 miles west
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-23
of the project site. The Winco Foods grocery anchor is the largest retail completion
(over 50% of total space added) within the Bakersfield Metro Area since 2010.
Presently, retail space under construction within the area is limited to minor additions
and renovations to existing facilities.
The lack of recent development has served to bring retail occupancy more in line with
vacancy rates that characterized the Bakersfield Metro Area prior to the Great
Recession as shown below.
Bakersfield Metro Area - Retail Vacancy Trends
Source: CoStar Group; Alfred Gobar Associates
0%
4%
8%
12%
16%
20%
24%
28%
20
0
7
3
Q
20
0
7
4
Q
20
0
8
1
Q
20
0
8
2
Q
20
0
8
3
Q
20
0
8
4
Q
20
0
9
1
Q
20
0
9
2
Q
20
0
9
3
Q
20
0
9
4
Q
20
1
0
1
Q
20
1
0
2
Q
20
1
0
3
Q
20
1
0
4
Q
20
1
1
1
Q
20
1
1
2
Q
20
1
1
3
Q
20
1
1
4
Q
20
1
2
1
Q
20
1
2
2
Q
20
1
2
3
Q
20
1
2
4
Q
20
1
3
1
Q
20
1
3
2
Q
20
1
3
3
Q
20
1
3
4
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1
4
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20
1
4
2
Q
Pe
r
c
e
n
t
V
a
c
a
n
t
Freestanding-Other Regional-Power-Community Neighborhood
Strip Center All Retail
The vacancy rate describing regional, power, and community centers spiked at the
onset of the Great Recession, peaking at 18% by mid-2009 and holding above 16%
through the end of 2011. Since the beginning of 2012, the vacancy rate describing
regional, power, and community centers has steadily dropped by half to 8% as of
mid-year 2014. Steady employment and economic growth throughout the Kern
County region has been instrumental in driving down overall vacancy rates due to
corresponding growth in retail spending potential.
In order to identify the probable increase in retail space prior to the project opening,
City of Bakersfield Community Development Department staff were consulted about
the progress and status of retail projects with entitlement approval or projects seeking
entitlement approval. The Community Development Department indicates project
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-24
approval activity during the past few years has been largely limited to minor additions,
with the exceptions noted above. In addition, under construction and proposed
project data compiled by the CoStar Group was also reviewed to assess the potential
for a significant interim increase in the supply of retail space. Exhibit III-12
summarizes four centers that are currently proposed. The proposed projects have
received entitlement approval but are not actively progressing toward development.
Projects that have an active leasing program in place (evidenced by advertised space
plans, quoted lease rates, and current marketing brochures) provide a good indication
of the tenanting process that immediately precedes project financing and start of
construction. For purpose of this analysis, it is assumed that projects currently “under
construction” or that are being “actively marketed for tenant leasing” are likely to be
completed in advance of the Bakersfield Gateway Center. The relative timing of the
proposed retail projects described in Exhibit III-12 (projects approved several years in
the past with little or no subsequent mapping/construction/marketing activity) is less
certain. There is no formal evidence to indicate any of the four proposed projects
identified are likely to be constructed and occupied in advance of the Bakersfield
Gateway Center.
Retail Market Potential
Retail is a population-serving form of land use and responds quickly to opportunities
created by a temporary imbalance of demand-supply conditions that periodically
affect healthy retail markets. Factors that may bring about a temporary trade area
imbalance are diverse, but some fundamental conditions that influence the entry and
exit of competing retailers are briefly summarized below:
A limited base of consumer support that unduly restricts the supply of retailers
that can effectively serve a trade area, resulting in an underserved consumer
population that must leave the area in order to satisfy their demand for products
and services.
A relatively limited supply of competing retailers that can result in very strong
sales performance among select retailers, but most often requires consumers to
either forego purchase decisions or leave the area to satisfy demand for products
and services that are not available or are in short supply.
An influx of competing retailers that results in a temporary oversupply of retail and
corresponding reduction in sales until such time enough additional consumer
support exists to increase sales or until such time that the supply or retailers is
sufficiently reduced.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-25
A rapid increase in the base of consumer support that leads to a corresponding
increase in same-store sales but also fuels an outflow of spending potential to
other areas until such time the supply of trade area retailers increases enough to
adequately serve consumer demand for products and services.
No one condition summarized above exists in isolation and any given trade area is
likely to be simultaneously affected by multiple conditions. Evaluating market
potential for future retail development considers the extent to which there exists an
imbalance of demand-supply conditions which indicate the opportunity to increase the
supply of competing retail. For purpose of this analysis, market potential for the
Bakersfield Gateway Center is defined as the residual product of demand and supply
conditions. In effect, potential sales support for the proposed development is
identified after first deducting estimated actual sales captured at existing retailers
from the pool of available support (trade area spending potential less trade area
actual sales equals residual support available to future retail development).
The Bakersfield Metro Area plays a central role in serving retail demand from all
areas of Kern County as data below for the City of Bakersfield strongly suggests.
City Of Bakersfield Taxable Sales Flow Based on Statewide Potential
Taxable Retail Sales ($000)Inflow or (Outflow) of Potential
Retail Store-Group Activity Actual Potential1 ($000)% of Potent.
Apparel, Shoes & Accessories $294,763 $305,289 ($10,526)(3.4%)
General Merchandise 904,090 471,710 432,380 91.7%
Drugs Stores 64,201 62,702 1,499 2.4%
Food & Grocery Stores 215,886 198,529 17,358 8.7%
Beer, Wine, & Liquor Stores 6,176 32,736 (26,560)(81.1%)
Eating and Drinking 568,883 557,009 11,874 2.1%
Home Furn-Elect-Appl 203,522 232,871 (29,348)(12.6%)
Bldg Mat & Garden Supplies 310,438 258,875 51,563 19.9%
Auto Dealers and Auto Supplies 1,067,814 580,696 487,118 83.9%
Service Stations 549,632 547,281 2,351 0.4%
Other-Specialty Retail 306,843 549,035 (242,191)(44.1%)
All Retail Stores $4,492,248 $3,598,203 $894,045 24.8%
All-Excld Auto-Fuel Sales 2,874,802 2,470,226 404,576 16.4%
Notes:
1 Based on the overall average per capita retail sales for State of California and the estimated mid-2012 population base:
City population estimate for mid-12 = 356,851 persons.
Source: Alfred Gobar Associates; California State Board of Equalization; California Department of Finance.
As shown above, nearly 25% of all taxable retail sales captured by City-based
establishments reflects an influx of support from surrounding rural areas of Kern
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-26
County or beyond. Retail sales support that originates within the Bakersfield Metro
Area or that flows in from surrounding areas represents a primary source of potential
support for the Bakersfield Gateway Center.
A few store-group activities shown above are defined by a leakage of sales potential
(apparel, liquor, home furnishings, and specialty retail) despite the strong attraction of
Metro Area stores. These same store-group activities are also defined by a leakage
of sales potential for the County as a whole. The low level of actual sales that
describes these store-group activities is not necessarily an indication that area
residents consume substantially less of such products but more likely an indication of
pent-up demand (a condition of trade area imbalance, where a relative absence of
suitable purchase options prompts consumers to satisfy their demand outside the
region or restrict the purchase of such products).
The vast amount public information available for this analysis reflects historic data
through the 2012 calendar year. By comparison, this analysis assigns 2016 and
2019 as the first full year of operation for each development phase of the Bakersfield
Gateway Center. In order to measure residual potential available during the 2016
and 2019 operating periods, it is also necessary to estimate: a) the increased level of
consumer spending potential representing demand; and b) the increased level of
sales captured by existing retail facilities representing supply.
Regional-Oriented Retail Potential
The estimated increase in consumer support originating within and outside the
Bakersfield Metro Area is shown below for store-group activities closely reflecting the
regional-oriented retail focus of the project. As shown below, about 87% of overall
support potential is from Metro Area residents with surrounding rural area residents
representing 13% of the total shown. Support potential describing Metro Area
residents reflects income-based estimates of spending potential (refer also to Exhibit
III-7). Potential sales inflow from rural Kern County is based a County-wide estimate
of per capita spending potential times the rural area consumer population less an
estimate of sales captured by rural area retailers. The estimated inflow of sales
support to the Bakersfield Metro Area represents less than 20% of total spending
potential describing rural area consumers. For purpose of this analysis, an equal
share of spending potential not captured by rural area retailers is assumed to flow to
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-27
other California regions, such as Los Angeles County, etc., instead of the Bakersfield
Metro Area. As shown, total support potential for retail store-groups closely aligned
with the retail focus of the project is estimated at roughly $5.8 Billion in 2016 and $6.4
Billion in 2019.
Consumer Support Potential - Bakersfield Metro Area
Bakersfield Metro Area - 2016 Bakersfield Metro Area - 2019
Metro Area Rural Kern Overall Metro Area Rural Kern Overall
Retail Store-Group Category Potential Co. Inflow Potential Potential Co. Inflow Potential
($000's)($000's)($000's)($000's)($000's)($000's)
GAFO Retail Activity 2,356,954 620,050 2,977,004 2,616,705 688,341 3,305,046
General Merchadising 904,423 346,186 1,250,609 1,004,096 384,643 1,388,739
Apparel & Accessories 451,752 36,015 487,768 501,538 39,972 541,510
Furniture & Hshld Appl/Elect.291,925 116,700 408,625 324,097 129,541 453,637
Other Specialty-Misc Retail 708,854 121,148 830,002 786,974 134,185 921,159
Building Materials 388,950 54,132 443,082 431,815 59,943 491,758
Drug & Sundries 283,208 5,271 288,479 314,419 5,816 320,236
Food & Beverage 930,385 1,711 932,096 1,032,919 1,892 1,034,810
Eating & Drinking 973,566 80,615 1,054,181 1,080,859 89,383 1,170,242
Auto TBA-Maint 106,085 - 106,085 117,776 - 117,776
Bakersfield Gateway Retail Focus:5,039,148$ 761,778$ 5,800,926$ 5,594,493$ 845,376$ 6,439,868$
Geographic Origin of Support:87%13%100%87%13%100%
Source: Alfred Gobar Associates
Existing retail facilities will invariably benefit from growing consumer demand.
Expected growth in sales support captured by existing retail facilities in advance of
each project phase is detailed in Exhibit III-13 for a broad spectrum of retail activity
and shown below for store-group activities closely reflecting the retail focus of the
project.
Increased Sales Capture by Existing Retailers - Bakersfield Metro Area
2012 Sales 2016 Sales 2012-16 2019 Sales 2012-19
At Existing At Existing Increase In At Existing Increase In
Retail Store-Group Category Retailers Retailers Capture Retailers Capture
($000's)($000's)($000's)($000's)($000's)
GAFO Retail Activity 1,917,070 2,295,471 378,401 2,543,216 626,146
General Merchadising 1,023,362 1,229,279 205,917 1,365,783 342,421
Apparel & Accessories 292,882 351,109 58,227 389,467 96,585
Furniture & Hshld Appl/Elect.195,883 235,067 39,184 260,907 65,024
Other Specialty-Misc Retail 404,944 480,017 75,073 527,059 122,115
Building Materials 329,912 394,907 64,996 437,506 107,594
Drug & Sundries 273,411 324,658 51,246 355,876 82,465
Food & Beverage 818,889 974,473 155,584 1,072,395 253,507
Eating & Drinking 659,607 786,779 127,172 869,102 209,495
Auto TBA-Maint 108,994 128,791 19,796 140,799 31,804
Bakersfield Gateway Retail Focus:4,107,883$ 4,905,079$ 797,195$ 5,418,894$ 1,311,011$
Equivalent CAGR:----4.5%--4.0%
Source: Alfred Gobar Associates
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-28
Overall sales performance at existing retail facilities is projected to increase 4.5%
annually over the near-term (2016) and 4.0% annually over the mid-term (2019).
Historically, the constant dollar (inflation-adjusted) rate of total retail sales growth
within the City of Bakersfield has only been about 1.8% per year on average since
2000, compared to 2.4% for Kern County and 0.5% for California. A high overall rate
sales growth is assigned to the Bakersfield Metro Area to simulate a more rapid pace
of mid-term post-recession recovery.
Also shown in Exhibit III-13, is a simulation of the potential increase in supply of
competing retail facilities over the interim period. The simulation relies on the per
square foot rate of sales describing target sales performance at the Bakersfield
Gateway Center and the historical average rate of sales growth for the City of
Bakersfield (1.8% per year between 2000 and 2012) to calculate a hypothetical
increase in competing retail floor space throughout the Bakersfield Metro Area. As
shown, enough overall sales growth (capture of consumer spending potential) is
projected to hypothetically add another 1.32 million square feet of retail space by
2016 and 2.03 million square feet by 2019, while still allowing existing retail facilities
to increase overall same-store sales at the historic 1.8% rate. In relation to the
historic rate of sales growth, the projected rate of existing store sales growth (from
4.0% to 4.5% per year) reflects a conservative interpretation of residual market
potential. In other words, existing facility sales growth is increased at a historically
high rate thereby reducing the residual amount of sale potential that would otherwise
be available to the project.
In 2012, there were 3,636 active retail establishment permits within the City of
Bakersfield (according to SBOE records) with another 1,053 permits estimated to
exist within unincorporated portions of the Bakersfield Metro Area (about 4,690
establishment permits in all during 2012). Historically, the total number of
establishment permits within the City has increased by about 2.1% per year on
average since 2000, although the increase has not exceeded 0.7% per year since
2008. For purpose of this analysis the total number of establishments competing for
sales support throughout the Bakersfield Metro Area is estimated to increase at a
pace consistent with the longer term average of 2.1% annually. It is not practical to
assume zero increase in the total number of establishment permits describing
retailers competing within the trade area. At the same time, it is not feasible to predict
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-29
the specific mix of storefront activities expected to increase over the interim period.
This analysis assigns a future increase in establishment permits according to the
proportionate mix of existing establishments. Of primary importance when estimating
residual retail potential is the difference between the total level of sales supported by
consumers versus the total level of sales captured by existing retailers.
Residual market potential describing a broad spectrum of retail activity is detailed in
Exhibit III-14 and further summarized below for store-group activities closely reflecting
the project retail focus.
Residual Retail Potential - Bakersfield Metro Area
Overal 2016 2016 Residual Potential Overal 2019 2019 Residual Potential
Metro Area Sales As Share of Metro Area Sales As Share of
Retail Store-Group Category Potential Potential Overall Potential Potential Overall
($000's)($000's)($000's)($000's)
GAFO Retail Activity 2,977,004$ 681,532$ 23%3,305,046$ 761,829$ 23%
General Merchadising 1,250,609 21,330 2%1,388,739 22,956 2%
Apparel & Accessories 487,768 136,659 28%541,510 152,043 28%
Furniture & Hshld Appl/Elect.408,625 173,558 42%453,637 192,731 42%
Other Specialty-Misc Retail 830,002 349,985 42%921,159 394,100 43%
Building Materials 443,082 48,175 11%491,758 54,252 11%
Drug & Sundries 288,479 - 0%320,236 - 0%
Food & Beverage 932,096 - 0%1,034,810 - 0%
Eating & Drinking 1,054,181 267,402 25%1,170,242 301,140 26%
Auto TBA-Maint 106,085 - 0%117,776 - 0%
Bakersfield Gateway Retail Focus:5,800,926$ 997,109$ 17%6,439,868$ 1,117,222$ 17%
Source: Alfred Gobar Associates
As shown above and in Exhibit III-14, overall residual potential totals $997 Million in
2016 and reflects support potential that remains after first deducting sales support
captured by existing retail facilities. The residual potential largely represents
consumer support that existing retailers failed to capture and consequently can be
expected to benefit new retail venues such as the Bakersfield Gateway Center. By
2019 overall residual potential is estimated to exceed $1.1 Billion. The high level of
residual sales potential describing the entire Bakersfield Metro Area does not mean
the Bakersfield Gateway Center is expected to achieve the indicated level of residual
sales. The high level of uncaptured residual sales potential means the opportunity for
the Bakersfield Gateway Center to achieve a target level of sales performance
without having to shift sales away from existing retailers is greatly improved. The
competitive level of market performance describing the project has already been
identified at about $218 Million in equivalent retail sales during the 2019 year of
operation (refer also to Exhibit III-3).
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-30
Other Specialty-Miscellaneous Retail Potential
Roughly $816 Million of overall residual potential identified above ($1.11 Billion less
$301 Million) describes store-group activities closely associated with the mix of
anchor-scale retail expected to characterize the Bakersfield Gateway Center. Of the
$816 Million in anchor-related potential, nearly one-half ($394 Million) reflects residual
support for Other-Specialty-Miscellaneous retail products. The Other-Specialty store-
group includes a broad mix of retail activities commonly found in larger retail centers,
including sporting goods, hobby & craft, pet supplies, etc. Project retail activity
described by the Other-Specialty-Miscellaneous store-group is expected to occupy
roughly 225,000 square feet of retail lease space within the completed project. A
special analysis of residual potential describing a selected variety of specialty store-
type activities was prepared to provide some insight about the level support available
for this overall store-group of activity as summarized below.
2019 Residual Retail Potential - Selected Specialty-Misc Retail Activities
Overall 2019 2019 Sales 2019 Floor Area
Metro Area At Existing Residual Supported At
Retail Store-Group Category Potential Retailers Potential $320/SF
($000's)($000's)($000's)
All Specialty-Misc Retail Combined $921,159 $527,059 $394,100 1,232,000
Selected Specialty-Misc Activities $523,676 $365,737 $157,939 493,000
Sporting Goods 115,282 58,543 56,739 177,000
Hobby & Crafts 54,426 46,712 7,715 24,000
Fabrics 18,802 16,137 2,665 8,000
Books, Music, & Media 53,120 26,870 26,250 82,000
Party Supplies 14,276 12,253 2,024 6,000
Pets & Pet Supplies 71,384 61,266 10,118 32,000
Beer, Wine, & Liquor 38,627 16,966 21,661 68,000
Office Supplies 80,167 60,398 19,769 62,000
Other Specialty-Misc Anchors 77,591 66,593 10,998 34,000
Note: The Bakersfield Gateway Center is projected to host roughly 225,000 square feet for Other Specialty
Miscellaneous retail activity, including 60,000 square feet for the Bass Pro Shops sporting goods store.
Source: Alfred Gobar Associates
As shown, the nine (9) selected specialty store-type activities account for nearly 57%
($523 out of $921 Million) of overall support potential describing the Metro Area but
about 40% of residual support potential ($157 out of $394 Million). Also shown is the
amount of retail lease space that can be supported based on a 2019 target level of
sales performance equal to $320 per square foot. As shown above, enough residual
support is projected to warrant 493,000 square feet of retail anchor space occupied
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-31
by the nine (9) specialty store-type activities described above. By comparison, the
completed Bakersfield Gateway Center is only anticipated to host roughly 225,000
square feet of anchor space occupied by specialty retail store-type activities.
Neighborhood-Oriented Retail Potential
The baseline retailing focus of the Bakersfield Gateway Center can be characterized
as a commercial venue with a heavy regional-oriented mix of retail merchandising
and entertainment-leisure activities. For purpose of this analysis, a modified retail
focus that includes a 15,000 square foot drug store anchor and 45,000 square foot
grocery store anchor in place of retail space for GAFO activities is also evaluated. A
drug store and grocery store hosted within the project can be expected to compete
most directly within a neighborhood-oriented trade area versus the regional-oriented
trade used to evaluate the baseline retail focus of the project.
A relevant neighborhood-oriented trade area for a prospective drug store and grocery
store can be reasonably defined by a 3-mile radius from the principal surface street
entry to the project (Hosking Avenue and H Street). Within this neighborhood trade
area setting several drug and grocery store anchors currently compete for household
sales support as summarize below (refer also to Exhibit III-11).
Existing Drug & Grocery Store Anchors Within 3 Miles
Ref ID Name of Anchor Store Area Distance
DS1 Rite-Aid 15,901 1.39
DS2 CVS 12,992 1.44
DS3 Walgreens 13,543 1.45
DS4 Ideal Pharmacy 6,680 1.55
DS5 Walgreens 13,543 2.94
DS6 Walgreens 14,605 3.00
77,264
GS1 Vallarta Supermarket 40,195 1.01
GS2 Pumpkin Center Market 9,561 1.31
GS3 Albertsons 51,048 1.49
GS4 Fresh-N-Easy 10,000 2.24
GS5 Foods Co.62,775 2.43
GS6 Superior Grocers 57,738 2.59
GS7 Sams Supermarket 9,600 2.70
GS8 Smart and Final 19,869 2.75
260,786
Source: Alfred Gobar Associates
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-32
The current household population within the 3-mile trade includes nearly 84,000
residents. Between 2000 and 2013, the 3-mile trade area has accounted for as little
as 17% to as much as 80% of annual population growth throughout the City of
Bakersfield. Since 2010, the trade area share of City growth has ranged from 20% to
46%. This analysis assigns 2019 as the first year of operation for a drug store or
grocery store developed within the project under the modified retail focus. Using a
precedent share of sales growth ranging from 20% to 25% of City population growth,
nearly 92,500 resident consumers are projected to live within a 3-mile area by 2019.
The analysis of residual support potential for a drug and grocery store anchor within
the Bakersfield Gateway Center is shown below.
2019 Retail Anchor Potential Within 3-Mile Area
Drug Store Grocery Store
Retail Market Criteria Anchor Anchor
Consumer Population 92,467 92,467
Per Capita Spending $520 $1,710
Overall Sales Support $48,083,000 $158,118,000
Est. Anchor Store Sales $35,155,100 $116,049,800
Anchor Floor Area (Sq Ft)77,264 260,786
Est. Anchor Sales/Sq Ft $455 $445
Est. Non-Anchor Store Sales $3,905,900 $12,894,200
Existing Retail Sales Capture $39,061,000 $128,944,000
Overall Residual Potentilal $9,022,000 $29,174,000
Anchor Capture Allowance 75%75%
Availalble Residual For Anchor $6,767,000 $21,881,000
Anchor Store Area (Sq Ft)15,000 45,000
Target Sales/Sq Ft $412 $426
Sales At Bakersfield Gateway $6,180,000 $19,170,000
Anchor Store Residual Potential $6,767,000 $21,881,000
Sales At Bakersfield Gateway $6,180,000 $19,170,000
As Share of Residual 91%88%
Residual Excess/(Shortage)$587,000 $2,711,000
As Share of Residual 9%12%
Source: Alfred Gobar Associates
Current trade area residents are characterized by a smaller share of households with
total income below $35,000 per year than is true for the Metro Area overall, but also a
smaller share of households with total income exceeding $100,000 per year. Current
trade area resident also include a much higher ratio of workers per household than is
true for the Metro Area overall (1.48 versus 1.31 workers per household) and larger
average household size (3.77 versus 3.19 persons per household). These consumer
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-33
characteristics suggest that current and future trade area residents are likely to
provide strong support for staple products including drug and sundry and food and
beverage items. As shown above, enough residual support potential is projected
within the 3-mile trade area to support a drug store anchor and grocery store anchor
after first deducting consumer sales support captured by existing retailers.
Target Retail Sales and Residual Market Potential
The overall level of residual potential describing the Metro Area in 2019 is more than
five times greater than the target level of retail sales describing the completed project
($218 Million). A substantial amount of excess support potential should benefit the
Bakersfield Gateway Center but does not entirely eliminate the risk for some level of
competitive impact at the store-group level (as example; excess support potential for
apparel products does not necessarily translate to increased support potential for
non-apparel products such as building materials, furniture and furnishings, etc.). A
closer inspection of residual support potential at the store-group level suggests some
level of competitive impact associated the Bakersfield Gateway Center can be
expected for specific store-group activities as suggested below.
Residual vs Target Sales - Bakersfield Gateway Center - Phase 1 & 2
2019 Project Outook Target Sales Excess or
Residual Target Sales as Share of (Shortage)
Retail Store-Group Category Potential of Project Residual of Residual
($000's)($000's)($000's)
GAFO Retail Activity 761,829$ 153,496$ 20%608,333$
General Merchadising 22,956 32,400 141%(9,444)
Apparel & Accessories 152,043 30,544 20%121,499
Furniture & Hshld Appl/Elect.192,731 19,320 10%173,411
Other Specialty-Misc Retail 394,100 71,232 18%322,868
Building Materials 54,252 36,960 68%17,292
Drug & Sundries - - 0%-
Food & Beverage - - 0%-
Eating & Drinking 301,140 18,270 6%282,870
Auto TBA-Maint - 2,580 No Residual (2,580)
Bakersfield Gateway Retail Focus:1,117,222$ 211,306$ 19%905,916$
Note: Residual-Target comparison shown above is for baseline retail focus of project (regional-oriented)
Source: Alfred Gobar Associates
When the target level of sales performance for a store-group activity exceeds
corresponding residual potential there is increased risk that target sales can only be
realized by shifting a portion of sales support that would have been enjoyed by
existing retail facilities, if not for the competitive impact of the project. With limited
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-34
exception, residual support for each store-group activity shown above exceeds the
corresponding target level of sales performance. The two exceptions include general
merchandising retail activity and auto parts-tires-batteries-accessory (TBA)
operations. The potential environmental impact of the project on existing retail is
addressed more directly in Chapter V of this analysis. Overall, enough gross residual
potential exists at the store-group level ($199.3M) to support over 94% of the target
level of retail sales ($211.3M excluding entertainment-leisure activities) describing the
Bakersfield Gateway Center in 2019.
Entertainment-Leisure Market Potential
For purpose of this analysis, the Bakersfield Gateway Center consists of four
commercial elements previously identified (anchored retail, pad-convenience retail,
entertainment-leisure retail, and lodging). Market potential describing the anchor and
pad-convenience retail components of the project have been addressed above. The
entertainment-leisure component of the project will be built as during Phase 1 and is
generally defined to include a prospective movie theater occupying roughly 60,000
square feet, roughly 35,000 square feet for some form of recreation-leisure activity
(not yet defined), and 25,000 square feet of sit-down restaurant space.
Market potential for all restaurant space within the project has already been address
above as part of the analysis of retail potential. It is beyond the scope of this analysis
to evaluate market potential for an unlimited selection of leisure-recreation activities
that might be hosted on site (game center, disco bowling, indoor Karting, gymnastics,
rock climbing, laser tag, indoor trampolines, indoor volleyball, indoor hockey-ice
skating, etc.). Evident from the field audit, however, is a prevalence of health clubs-
fitness centers occupying anchor space within several retail centers throughout the
Bakersfield Metro Area. This analysis addresses the potential for a movie theater
and a health club within the Bakersfield Gateway Center. Movie theaters and health
clubs describe the two most prevalent entertainment-leisure activities that merit
further investigation of market potential and whether inclusion as part of the project is
likely to trigger the impact of urban decay within existing retail facilities.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-35
Movie Theater Potential
An over-zealous period of cinema expansion during the late-90’s triggered a period of
cinema closures, and chain mergers and consolidation that is expected to drive
market growth opportunities for the foreseeable future. Market trends affecting
growth potential for the past 12 to 24 years are illustrated below.
Indexed Trends Describing Growth In Movie Screens
Source: National Association of Theater Owners (NATO); U.S. Census Bureau; AGA.
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Screens Per Site Number of Screens Number of Sites
As shown, the absolute number of cinema venues has been on the decline while the
total number of movie screens and screens per cinema venue has been on the rise.
This trend indicates a historic proliferation of cinema venues (particularly sites with
less than 8 screens) is being replaced with fewer but larger venues that host a
greater number of screen options for visiting patrons (most often hosting 14 or more
screens). The shift to fewer larger venues with more screen options has been
influenced by a complex mix of factors, including but not limited to changing
preferences by the movie-viewing public, competition from alternative digital
distribution channels (Netflix, Redbox, etc.), high-resolution cinema and home
viewing technology, and revenue and intellectual property right battles between
content producers and content distributors (including cinema operators). Cinema
growth potential is strongly influenced by the ability to achieve increased receipts per
screen in operation as illustrated below.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-36
Indexed Trends Characterizing Cinema Demand
Source: National Association of Theater Owners (NATO); U.S. Census Bureau; AGA.
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Box Office Receipts/Visit Receipts/Screen Population/Screen
Receipts per visitor and receipts per screen in operation continue to increase while
the rate at which new screens are developed has held relatively constant in relation to
the base of public being served. Near-term market potential for cinemas within the
Bakersfield Metro Area is expected to be influenced by the above precedent trends
describing the larger movie-viewing industry.
Movie cinemas were included as part of the field audit of existing retail anchor
facilities as previously identified (refer to Exhibit III-11) and further summarized below.
Existing Cinemas in Bakersfield Metro Area
Name of Cinema Total Cinema Area Per Miles
And Type of Venue Street Address Screens Bldg Area Screen From Site
Single Screen
None --------------------
Miniplexes (2-7 Screens)
$1 Movies 4200 California Avenue 6 17,298 2,883 6.2
Multiplexes (8-15 Screens)
Regal Cinema 9000 W. Ming Avenue 14 56,885 4,063 6.2
Regency Theater 3100 Mall View Road 10 23,716 2,372 8.5
Megaplexes (16+ Screens)
Reading Cinemas 2000 Wible Road 16 62,677 3,917 3.9
Maya Cinema 1000 California Avenue 16 67,106 4,194 6.1
__________________
62 227,682 3,672
Source: Field Audit by Alfred Gobar Associates
The 16-Screen Maya Cinema is the newest of the five cinemas identified. On-site
visits and movie experience reviews on Yelp indicate the Regal Cinema venue on
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-37
Ming Avenue and the Maya Cinema venue on California Avenue provide the highest
quality movie viewing experience among existing facilities, while the rest are
characterized as discount options within aging facilities. In short, the full extent of
demand for movie-viewing consumption is not being served to the level suggested by
the 62 screen count in existing venues. Summarized below is the near-term outlook
of cinema market potential based on more normative levels of movie viewing demand
and overall population within the Bakersfield Metro Area.
Cinema Market Potential - Bakersfield Gateway Center
Market Estimated Demand Estimated Supply Site Residual Potential
Criteria 2013 2016 2013 2016 2013 2016
Bakersfield Metro Area 549,970 575,640 549,970 575,640 549,970 575,640
Movie Screen Potential 69 72 62 62 18 24
Populaiton/Screen 8,000 8,000 8,870 9,280 n.a.n.a.
Box Office Visitor Potential
Total Visitors (000's)2,387 2,470 1,613 1,649 581 779
Visitors Per Screen 34,600 34,300 26,010 26,600 32,900 32,900
Potential Receipts
Total Receipts ($000's)$22,368 $24,523 $10,910 $12,270 $4,620 $6,726
Total Receipts/Visit $9.37 $9.93 $6.77 $7.44 $7.95 $8.63
Box Office Receipts/Visit $8.15 $8.64 $5.89 $6.48 $6.92 $7.51
Other Receipts/Visit $1.22 $1.29 $0.88 $0.96 $1.03 $1.12
Note: Residual screen potential is based on site capture of movie admission leakage not total screen count.
Source: National Association of Theater Owners; Alfred Gobar Associates
The estimate of market potential indicates that in 2013 the Bakersfield Metro Area
could have supported 69 movie screens attracting 2.38 million visitors per year and
about $22.3 million in total receipts based on National rates of movie-viewing
demand. In 2013, it is estimated that the 62 existing cinemas only attracted roughly
1.6 million visitors and roughly $10.9 million in total receipts. These factors suggest
existing Metro Area cinemas failed to attract nearly 0.77 million visitor trips in 2013
due to the marginal movie experience offered in many of the existing venues. Using
a lower rate of visitor demand per screen to describe the Bakersfield Metro Area
(32,900 visits per screen versus 34,600 visits per screen), 18 additional screens
providing marquee caliber experience could have been supported in 2013. By 2016,
it is estimated stagnant performance characterizing most of the existing cinema
venues and a growing consumer population will generate enough unmet support
potential for another 24 screens to be added. The corresponding level of revenue
potential describing a marquee movie house is estimated at roughly 12% to 15%
below the National pricing average to reflect low average pricing within many existing
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-38
venues and expected resistance to premium pricing for a contemporary moving-
viewing experience.
The Bakersfield Gateway Center conceptual plan identifies roughly 60,000 square
feet of building space for a cinema operation. This amount of floor space suggests a
maximum of 14 to 16 screens (about 4,000 to 4,200 square feet per screen) could be
developed within the project and still provide a top-level movie-going experience. By
comparison, the Bakersfield Metro Area can be reasonably expected to support
another 24 screens offering a contemporary movie-viewing experience by 2016.
Health Club-Fitness Center Potential
The health club and fitness center (Health Club) business is often viewed as a
cyclical industry characterized by periodic spurts of gym development and
memberships growth due to seasonal indoor exercise routines in many regions of the
US. In reality, health club membership at the National level has been steadily
growing over the past 12 years as illustrated below. The long-term growth trend
identified is based on an industry analysis prepared by IBISWorld, an independent
industry and market research firm headquartered in Los Angeles that provides
analysis for a wide range on US industries.
Health Clubs Membership Trends - US Market
Notes
Large health clubs defined as clubs with at least 20 employees and at least 2,000 active members.
Small health clubs defined as clubs with fewer than 20 employees and less than 2,000 active members.
Source: IBIS World; Int'l Health, US Economic Census; Alfred Gobar Associates
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ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-39
The above estimate of membership (44.6 million in 2013) reflects a conservative
assessment when compared to a corresponding estimate by the International Health,
Racquet & Sportsclub Association (51.3 million in 2013). Regardless, both sources
identify consistent membership growth over the past 12 and expect membership
participation in the health club industry to increase as the general public becomes
more health-conscious and an expanding base of aging consumers places more
emphasis on staying fit.
A health club within the Bakersfield Gateway Center is likely to occupy roughly
35,000 square feet building space designated for recreation-leisure activity. The
designated amount of recreation-leisure floor space corresponds more closely to a
large format health club. For purpose of this analysis a large format health club is
one with at least 20 payroll employees and 2,000 members. This assessment of
market potential focuses on fitness operations that can be characterized as large
format facilities. As shown below, the total number of large format health clubs and
corresponding business receipts has grown more rapidly than the corresponding
base of membership over the past 12 years.
Large Health Club Membership & Receipts - US Market
Described trends for clubs with at least 20 employees; and 2,000+ member revenue base.
Source: US Economic Census; IBIS World; Int'l Health, Racquet, & Sportclub Association; Alfred Gobar Associates
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Large Format Clubs Receipts ($Bill)Members
Prior to the Great Recession total receipts for large health clubs increased more
rapidly than either the number of clubs or membership enrollment but has fallen more
in line with the pace of club openings since 2011. Selected market trends underlying
the growth in large-format health clubs are summarized below.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-40
Large Health Clubs - Selected Market Trends
Described trends for clubs with at least 20 employees; and 2,000+ member revenue base.
Source: US Economic Census; IBIS World; Int'l Health, Racquet, & Sportclub Association; Alfred Gobar Associates
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Large Clubs/100K Pop Members/1K Pop Members/Club
The number of members per club has been on the decline. For most of the past 12
years, the downward trend in members per club was offset by a growing incident rate
of membership (memberships sold per 1,000 residents in each market area served)
which helped drive new club growth. With the onset of the Great Recession, the
incident rate of membership sales remained flat and even declined through 2011 but
has been on the rise during the past two years along with new club growth. The
market trends above suggest a declining incident rate of membership sales drives a
slower pace of new club growth while a constant or increasing incident rate of
memberships sales helps drive a faster pace of new club growth.
Health Club-Fitness Centers were included as part of the field audit of existing retail
anchor facilities as previously identified (refer to Exhibit III-11) and further
summarized below. In all, 15 large format health clubs occupying nearly 228,000
square feet of building space were identified at freestanding or center-based retail
locations. On average there is roughly 15,000 square feet of occupied space per
health club surveyed, due to the inclusion of some smaller facilities associated with
the dominant chain-brands competing in the Bakersfield Metro Area. The largest
health club occupies over 43,000 square feet. A 35,000 square foot health club
within the Bakersfield Gateway Center would constitute the fourth largest facility in
the metro area.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-41
Existing Large-Format Health Clubs In Bakersfield Metro Area
Building Miles
Name of Health Club Address Location Center Location Area (SF)From Site
Body X-Change Fitness 3515 Panama Ln Unamed Center 18,370 1.4
In Shape City 4801 White Ln Stine & White Crossings 43,271 3.1
Body X-Change Fitness 7701 White Ln Unamed Center 35,208 4.5
24-Hour Fitness 4302 Gosford Rd Freestanding location 23,057 4.6
In-Shape City 6901 Ming Ave Freestanding location 9,180 4.9
In-Shape City 4230 California Ave Bakersfield Plaza 34,523 6.2
Body X-Change Fitness 1130 Truxtan Ave Freestanding location 7,452 6.4
24-Hour Fitness 3633 Rosedale Hwy Rosedale Place 22,060 7.1
Body X-Change Fitness 9500 Brimhal Rd Brimhal Square 9,270 7.8
24-Hour Fitness 3400 Bernard St Freestanding location 18,013 8.6
In-shape Sport 3409 Coffee Rd River Rock Plaza 26,502 8.6
Body X-Change Fitness 13019 Stockdale Hwy Riverwalk Plaza 14,000 8.7
Body X-Change Fitness 2749 Calloway Dr Rosedale Village Center 36,114 8.8
In-Shape City 2681 Oswell St East Hills Village 24,000 8.9
Fitness 19 9620 Hageman Rd Plaza At Riverlakes 11,499 9.5
227,682
Source: Field Audit by Alfred Gobar Associates
Projected market potential for a new health club facility within the Bakersfield
Gateway Center is based on the near-term outlook regarding the incident rate of
membership sales that can be realized. National membership data suggests a broad
incident rate of 97 members per 1,000 population can be expected for large format
health clubs within a given market region served. Shown below is the near-term
outlook of market potential using a reduced 2013 incident rate of about 87
memberships per 1,000 population.
Health Club Market Potential - Bakersfield Gateway Center
Market Estimated Demand Estimated Supply Site Residual Potential
Criteria 2013 2016 2013 2016 2013 2016
Bakersfield Metro Area 549,970 575,640 549,970 575,640 549,970 575,640
Health Club Potential 16 19 15 15 1 2
Population:Club Ratio 33,800 30,500 36,700 38,400 n.a.n.a.
Membership Potential
Health Club Members 48,800 55,600 44,600 48,600 3,800 6,700
Members Per Club 3,100 2,940 2,930 2,780 2,930 2,780
Members Per 1K Pop 87.2 96.3 82.3 96.3 n.a.n.a.
Potential Receipts
Total Reciepts ($000's)$24,600 $29,600 $21,000 $24,200 $1,450 $2,800
Receipts/Member $505 $533 $471 $498 $498 $512
Note: Residual health club potential is based on population-related membership potential, not club count.
Source: US Economic Census; IBIS World; Int'l Health, Racquet, & Sportclub Association; Alfred Gobar Associates
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft III-42
As shown, overall potential during the 2013 calendar year is estimated at roughly
48,800 club members with membership at the 15 existing clubs characterized by
slightly less than 45,000 total club members generating an average of $471 per year
per member in dues and related purchases at each club. Estimated 2013
performance suggests enough residual potential remains to capture 3,800 additional
membership enrollments. Total residual potential exceeds a target threshold rate of
about 2,930 members per club facility. In short, enough market potential existed in
2013 to support one additional large format health club serving the Metro Area.
The National outlook is that the incident rate of membership sales is expected to
increase over the mid-term in response to evolving demographic and social dynamics
that place a greater emphasis on fitness. Growth in health club membership interest
within the Bakersfield Metro Area is also expected to follow the National trend but is
still expected to lag the National rate by roughly 5% (96 members per 1,000 versus
101 members per 1,000). As shown above, membership at existing health clubs is
projected to grow to roughly 48,600 members while overall membership potential for
the Bakersfield Metro Area is expected to increase to 55,600 members. By 2016,
enough residual membership potential is projected to support two additional large
format health clubs serving the Bakersfield Metro Area.
F:\BAKERSFIELD-GATEWAY-URBAN-DECAY_ADMIN-DRAFT\OCTOBER 17, 2014\B
Exhibit III-1
Bakersfield Gateway Center
Site Concept and Commercial Land Use Elements
Anchored Retail
Pad-Convenience Retail
Entertainment Retail
Hotel Lodging
Exhibit III-2
Selected Retail Center Characteristics By Type Venue
Design and Performance Neighborhood Center Super Community Center Regional Center Super Regional Center
Characteristics By
Retail Store-Group Activity Storefronts Floor Area Total Sales Storefronts Floor Area Total Sales Storefronts Floor Area Total Sales Storefronts Floor Area Total Sales
GAFO Products 20%23%12%38%53%40%59%82%71%72%90%87%
General Merchadising 2%8%3%4%26%16%3%54%24%4%63%41%
Apparel & Accessories 3%6%3%11%11%10%30%17%26%37%19%27%
Furniture & Hshld Appl/Elect.4%2%1%8%6%5%6%3%5%7%2%4%
Specialty Retail 11%8%5%15%10%9%20%8%16%24%7%15%
Building Materials 1%0%0%1%11%13%0%0%0%0%0%0%
Drug & Sundries 2%12%16%1%3%5%0%0%0%0%0%0%
Misc-Other Retail 9%5%3%5%5%4%11%4%5%3%1%1%
Food Store Activity 5%34%50%3%11%20%1%3%9%1%0%0%
Supermarkets 5%34%50%3%11%20%1%3%9%1%0%0%
All Other Food Stores 0%0%0%0%0%0%0%0%0%0%0%0%
Eating & Drinking 23%11%9%20%8%10%17%5%10%15%4%9%
Auto Parts & Accsy 1%0%0%1%0%0%0%0%0%0%0%0%Selected Retail & Dining 61%86%90%70%90%92%88%93%95%91%95%97%
Service stations 0%0%0%0%0%0%0%0%0%0%0%0%
Auto & Vehicle Sales 0%0%0%0%0%0%0%0%0%0%0%0%
All Retail & Dining Combined 61%86%90%70%90%92%88%93%95%91%95%97%
Consumer-Ent Services 39%14%10%30%10%8%12%7%5%9%5%3%
Retail, Dining & Service Total 100%100%100%100%100%100%100%100%100%100%100%100%
Design and Performance Neighborhood-Super Super Community Regional &All Type Centers
Characteristics By Community Hybrid & Regional Hybrid Super Regional Hybrid Combined
Retail Store-Group Activity Storefronts Floor Area Total Sales Storefronts Floor Area Total Sales Storefronts Floor Area Total Sales Storefronts Floor Area Total Sales
GAFO Products 28%34%23%41%49%39%65%85%81%47%64%51%
General Merchadising 3%13%6%3%29%14%3%54%30%3%34%17%
Apparel & Accessories 8%8%6%12%8%8%33%19%28%20%17%17%
Furniture & Hshld Appl/Elect.5%4%4%7%4%4%6%4%6%7%4%5%
Specialty Retail 13%8%7%19%9%13%22%8%17%18%9%12%
Building Materials 3%10%13%1%21%26%0%0%0%1%3%4%
Drug & Sundries 3%5%9%1%3%4%0%0%0%1%2%3%
Misc-Other Retail 8%6%5%10%5%5%7%2%4%7%4%4%
Food Store Activity 3%22%38%1%5%12%1%1%3%3%11%22%
Supermarkets 3%22%38%1%5%12%1%1%3%3%11%22%
All Other Food Stores 0%0%0%0%0%0%0%0%0%0%0%0%
Eating & Drinking 23%10%10%21%7%10%16%5%10%18%6%9%
Auto Parts & Accsy 0%0%0%1%1%1%0%0%0%0%0%0%
Selected Retail & Dining 67%88%96%77%92%98%89%94%98%77%90%92%
Service stations 0%0%0%0%0%0%0%0%0%0%0%0%
Auto & Vehicle Sales 0%0%0%0%0%0%0%0%0%0%0%0%
All Retail & Dining Combined 67%88%96%77%92%98%89%94%98%77%90%92%
Consumer-Ent Services 33%12%4%23%8%2%11%6%2%23%10%8%
Retail, Dining & Service Total 100%100%100%100%100%100%100%100%100%100%100%100%
Source: Urban Land Institute & International Council of Shopping Centers - 2008 Dollars and Cents of Shopping Centers; Alfred Gobar Associates
Site-Development_6-10-Plan/ULI-ICSC Sum
Exhibit III-3
Bakersfield Gateway Center
Phasing, Floor Area, Store Mix, & Sales Performance Summary
Community-Regional Orientation: Baseline Retail Focus Phase 1
Leasable Building Area 2016 Equivalent Sales Performance Sales Tax
Retail Store-Group Activity Total SF Area Mix Sales/SF Total ($000's)Sales Mix Revenue
GAFO Retail Activity 206,000 45%$301 $62,028,000 52%$620,200
General Merchadising 30,000 6%214 6,420,000 5%64,200
Apparel & Accessories 46,000 10%322 14,812,000 13%148,100
Furniture & Hshld Appl/Elect.12,000 3%312 3,744,000 3%37,400
Other Specialty-Misc Retail 118,000 26%314 37,052,000 31%370,500
Building Materials 120,000 26%304 36,480,000 31%364,800
Drug & Sundries 0 0%0 0 0%0
Food & Beverage 0 0%0 0 0%0
Eating & Drinking 27,000 6%400 10,800,000 9%108,000
Auto Parts/Supply/TBA 10,000 2%254 2,540,000 2%19,100
Retail & Dining Sub-Total 363,000 79%$308 $111,848,000 94%$1,112,100
Consumer-Ent Services 99,000 21%66 6,542,000 6%7,800
Consumer Finance/Banking 4,000 1%188 752,000 1%900
Movie Cinema (14-16 Screens)60,000 13%72 4,320,000 4%5,400
Recreation-Fitness Center 35,000 8%42 1,470,000 1%1,500
All Retail-Dining-Ent Activity 462,000 100%$256 $118,390,000 100%$1,119,900
Community-Regional Orientation: Baseline Retail Focus Phase 2
Leasable Building Area 2019 Equivalent Sales Performance Sales Tax
Retail Store-Group Activity Total SF Area Mix Sales/SF Overall Sales Mix Revenue
GAFO Retail Activity 320,000 95%$282 $90,356,000 93%$903,600
General Merchadising 120,000 36%216 25,920,000 27%259,200
Apparel & Accessories 46,000 14%332 15,272,000 16%152,700
Furniture & Hshld Appl/Elect.48,000 14%322 15,456,000 16%154,600
Other Specialty-Misc Retail 106,000 31%318 33,708,000 35%337,100
Building Materials 0 0%0 0 0%0
Drug & Sundries 0 0%0 0 0%0
Food & Beverage 0 0%0 0 0%0
Eating & Drinking 18,000 5%406 7,308,000 7%73,100
Auto Parts/Supply/TBA 0 0%0 0 0%0
Retail & Dining Sub-Total 338,000 100%$289 $97,664,000 100%$976,700
Consumer-Ent Services 0 0%0 0 0%0
Consumer Finance/Banking 0 0%0 0 0%0
Movie Cinema (14-16 Screens)0 0%0 0 0%0
Recreation-Fitness Center 0 0%0 0 0%0
All Retail-Dining-Ent Activity 338,000 100%$289 $97,664,000 100%$976,700
Community-Regional Orientation: Baseline Retail Focus 2019 Phased Completion
Leasable Building Area 2019 Equivalent Sales Performance Sales Tax
Retail Store-Group Activity Total SF Area Mix Sales/SF Overall Sales Mix Revenue
GAFO Retail Activity 526,000 66%$292 $153,496,000 70%$1,534,900
General Merchadising 150,000 19%216 32,400,000 15%324,000
Apparel & Accessories 92,000 12%332 30,544,000 14%305,400
Furniture & Hshld Appl/Elect.60,000 8%322 19,320,000 9%193,200
Other Specialty-Misc Retail 224,000 28%318 71,232,000 33%712,300
Building Materials 120,000 15%308 36,960,000 17%369,600
Drug & Sundries 0 0%0 0 0%0
Food & Beverage 0 0%0 0 0%0
Eating & Drinking 45,000 6%406 18,270,000 8%182,700
Auto Parts/Supply/TBA 10,000 1%258 2,580,000 1%19,400
Retail & Dining Sub-Total 701,000 88%$301 $211,306,000 97%$2,106,600
Consumer-Ent Services 99,000 12%68 6,740,000 3%8,100
Consumer Finance/Banking 4,000 1%190 760,000 0%1,000
Movie Cinema (14-16 Screens)60,000 8%74 4,440,000 2%5,600
Recreation-Fitness Center 35,000 4%44 1,540,000 1%1,500
All Retail-Dining-Ent Activity 800,000 100%$273 $218,046,000 100%$2,114,700
Note:
Identified Phasing reflects hypothetical scenario formulated for purpose of evaluating project impact on existing retail facilities.
Stated year sales performance reflects time-period adjustment of 2014 sales per square foot rounded to nearest $2 increment.
Source: Alfred Gobar Associates; Urban Land Institute-International Council of Shopping Centers; HTH Architects
Site-Development_6-10-Plan/Site Sum 1 10/15/2014
Exhibit III-4
Retail Performance Comparisons - 2012
City Of Bakersfield And Selected Geographic Regions
Taxable Retail Sales Per Capita Taxable Retail Sales Per Establishment ($000's)
Retail Store-Group Activity City County So. Cal.State City County So. Cal State
Apparel, Shoes & Accessories $826 $408 $936 $856 $661 $478 $436 $457
General Merchandise 2,534 1,267 1,323 1,322 8,001 4,177 2,397 2,913
Drugs Stores 180 142 166 176 988 965 943 1,139
Food & Grocery Stores 605 572 528 556 1,043 865 813 829
Beer, Wine, & Liquor Stores 17 40 85 92 281 435 544 533
Eating and Drinking 1,594 1,067 1,614 1,561 708 563 660 625
Home Furn-Elect-Appl 570 312 660 653 709 528 552 589
Bldg Mat & Garden Supplies 870 686 673 725 2,929 1,855 1,648 1,592
Auto Dealers and Auto Supplies 2,992 1,606 1,673 1,627 3,390 1,900 1,793 1,823
Service Stations 1,540 2,077 1,513 1,534 5,089 5,039 6,544 5,806
Other-Specialty Retail 860 635 1,005 982 195 161 168 170
All Retail Stores $12,589 $8,812 $10,175 $10,083 $1,111 $871 $684 $705
All-Excld Auto-Fuel Sales 8,056 5,129 6,988 6,922 794 579 731 526
- Performance is more than 1.15 times the State average
- Performance is less than 0.85 times the State average
Note:
Taxable retail sales describing Drug Stores and Liquor stores are not broken out at the City level of reporting. For city level
reporting, Drug Store sales were included as part of the General Merchandise category until 2008 then as part of the
Other-Specialty Retail category beginning in 2009. Liquor Store sales were included as part of the Other-Specialty Retail category
until 2008 then as part of the Food & Grocery category beginning in 2009. A special tabulation was requested and prepared by the
State Board of Equalization to facilitate comparison between the City of Bakersfield and larger geographic areas.
Source: Alfred Gobar Associates; California State Board of Equalization; California Department of Finance.
SBOE-Trends_2002-12_Bakersfield/8/3/2014 RE
Exhibit III-5
Bakersfield Gateway Center Metro Trade Area Setting
Bakersfield City Limit Area
Metro Bakersfield General Plan Area (Bakersfield Gateway Center Primary Trade Area)
Bakersfield Gateway Center
Exhibit III-6
Consumer Demographics For Selected Reference Areas
Selected Reference Area
City of Bakersfield County of State of
Demographic Criteria 3 miles Bakersfield Metro Area Kern California
Population & Households
2000 Population 51,150 253,562 407,389 661,649 33,871,648
2010 Population 78,933 347,483 532,823 839,631 37,253,956
2013 Population 82,461 359,350 550,164 863,589 37,905,036
2013 Household Population 82,216 356,407 545,987 826,338 37,082,392
2013 Group Quarter Population 245 2,943 4,177 37,251 822,644
Group Quarter Share of Total 0.3%0.8%0.8%4.3%2.2%
2013 Households 21,804 113,932 170,968 259,905 12,770,627
Avg Household Size 3.77 3.13 3.19 3.18 2.90
% Family Hshlds 83%75%75%75%69%
Avg Family Size 4.08 3.60 3.64 3.64 3.45
Age Distribution
Under 10 18.7%17.2%17.6%16.7%13.3%
10 to 14 9.1%8.1%8.2%7.8%6.8%
15 to 24 17.5%15.8%16.1%16.1%14.8%
25 to 34 15.3%15.0%14.8%15.2%14.6%
35 to 54 24.6%24.8%24.4%24.7%26.9%
55 to 64 8.1%9.8%9.8%9.9%11.5%
65 to 74 4.2%5.4%5.3%5.6%6.8%
75 & Older 2.4%3.9%3.7%3.9%5.4%
Median Age 27.9 30.7 30.3 30.9 35.4
Racial-Ethnic Composition
White 47.9%56.0%57.5%58.2%56.9%
Black 7.4%7.7%6.1%5.6%6.1%
Asian 6.6%6.0%4.6%4.2%13.3%
Pacific Island/Amer Indian 1.2%1.5%1.6%1.5%1.0%
Other Race Alone 32.1%23.6%25.3%25.7%17.6%
Multiple Races 4.8%5.2%4.9%4.8%5.1%
Hispanic Origin 64.7%48.1%51.4%51.7%39.0%
Housing & Household Tenure
Housing Units 23,541 124,369 186,697 291,081 13,894,416
Share of Units Vacant 7.4%8.4%8.4%10.7%8.1%
Occupied Housing Tenure
Owner Occupied 64.4%58.4%57.2%58.3%54.3%
Renter Occupied 35.6%41.6%42.8%41.7%45.7%
Educational Achievement - 25+Yrs of Age
Grade School or Less 19.1%11.0%13.8%14.5%10.3%
Some High School 17.5%11.5%13.0%13.9%8.8%
HS Diploma/GED 28.5%24.9%25.6%26.3%21.1%
Some College/Tech Ed 21.0%24.8%23.7%23.3%21.9%
Associate Degree (2Yr)5.7%8.0%7.1%7.0%7.7%
College Degree (4Yr)6.5%13.2%11.0%10.0%19.3%
Graduate/Prof Degree 1.8%6.7%5.7%5.0%11.0%
ESRI-2013-Ver2-Dem-Sum_3538-Bfield/Exhibit-Wrksht Page 1 of 2
Exhibit III-6 Cont'd Cont'd
Consumer Demographics For Selected Reference Areas
Selected Reference Area
City of Bakersfield County of State of
Demographic Criteria 3 miles Bakersfield Metro Area Kern California
Workforce Employment
Employed Workers 16+ Yrs Old 32,247 152,199 224,151 331,881 16,866,781
Workers Per Household 1.48 1.34 1.31 1.28 1.32
Workers Per 1,000 Pop 392 427 411 402 455
Occupation Employment - Workers 16+Yrs of Age
White Collar Workers 40.6%53.7%50.4%47.7%60.7%
Mgmt-Prof-Fin 18.8%30.1%27.3%26.0%36.5%
Sales 9.1%10.5%10.3%9.6%11.0%
Admin Support 12.7%13.2%12.8%12.2%13.2%
Service Workers 21.0%21.4%21.4%21.0%19.5%
Blue Collar Workers 38.5%24.9%28.2%31.3%19.8%
Agric-Min-Const 13.8%8.5%11.2%14.0%5.9%
Install-Maint-Repair 4.6%3.7%4.0%4.3%3.0%
Production 6.7%4.7%4.9%4.9%5.3%
Transp-Mat Moving 13.4%7.8%8.0%8.0%5.6%
Industry Employment - Workers 16+Yrs of Age
Agric-Mining 13.9%11.1%13.2%15.6%2.2%
Construction 7.9%5.3%5.9%5.6%5.5%
Manufacturing 5.5%5.0%5.0%5.3%10.0%
Wholesale Trade 1.7%2.6%2.7%2.5%2.8%
Retail Trade 13.2%11.6%11.4%11.2%11.3%
Transp-Utilities 7.1%4.9%4.9%4.9%4.4%
Information 1.7%1.4%1.2%1.0%2.3%
Fin-Ins-RE 3.5%5.1%4.7%4.0%6.3%
Prof-Educ-Food-Other Svcs 41.6%47.0%45.6%43.0%50.7%
Public Admin 3.8%6.1%5.5%7.0%4.5%
Household Income Distribution
<$15,000 9.9%11.1%12.7%14.0%10.9%
$15,000 - $24,999 9.6%9.7%10.6%11.0%8.8%
$25,000 - $34,999 11.6%10.8%11.5%11.6%9.5%
$35,000 - $49,999 23.2%15.7%15.7%15.9%13.2%
$50,000 - $74,999 21.3%17.8%17.1%17.0%17.1%
$75,000 - $99,999 13.2%13.1%12.2%11.5%12.3%
$100,000 - $149,999 8.1%14.0%12.8%12.0%15.2%
$150,000 - $199,999 2.3%4.6%4.3%4.1%6.6%
$200,000+0.8%3.3%3.1%2.7%6.4%
Median Household Income 46,241 52,653 49,370 46,746 58,881
Average Household Income 57,654 71,646 68,232 65,363 84,086
Per Capita Income 15,321 22,982 21,369 20,622 28,796
Source: ESRI ArcGIS - 2013 Market Profile Demographics; Alfred Gobar Associates
ESRI-2013-Ver2-Dem-Sum_3538-Bfield/Exhibit-Wrksht Page 2 of 2
Exhibit III-7
Household Retail Spending Behavior By Income Level
Note:- Indexed spending levels exclude automobile-gasoline purchases and spending on personal-repair services.
- GAFO includes general merchandise, apparel & shoes, furnishings & appliances, and other specialty products.
Verify or Update SoCal Retail Expend Reference>>>>- Average 2012 retail spending per household in California is estimated at $20,880 per year, excluding
Verify or Update SoCal Retail Expend Reference>>>> automotive vehcicle and gasoline purchases; and $29,790 per year including these items.
Source: Consumer Expenditure Survey, U.S. Bureau of Labor Statistics, November, 2013; Alfred Gobar Associates
45%13%14%20%8%
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00
All
Households
$10,000 to
$14,999
$15,000 to
$19,999
$20,000 to
$29,999
$30,000 to
$39,999
$40,000 to
$49,999
$50,000 to
$69,999
$70,000 to
$79,999
$80,000 to
$99,999
$100,000 to
$119,999
$120,000 to
$149,000
$150,000
and above
Overall Indexed Level of Household Retail Spending
An
n
u
a
l
H
o
u
s
e
h
o
l
d
I
n
c
o
m
e
GAFO-Specialty Items
Home Bldg-Garden Supplies
Grocery-Health Products
Eating & Drinking
Auto Supply-Misc Products
2012_Expend-Pot_Bfield-Gateway/Expend Mix
Exhibit III-8
Consumer Spending Potential - SBOE Reporting Detail and Store-Group Classification Scheme
SBOE Reporting Format 2012 State Equivalent Retail Impact Analysis 2012 State
County-State Level Detail Per Capita Store-Group Activity Store-Group Level Reporting Per Capita
GAFO Retail Activity 3,030
Women's apparel 128 Apparel & Accessories General Merchadising 1,424
Men's apparel 24 Apparel & Accessories Apparel & Accessories 768
Family apparel 527 Apparel & Accessories Furniture & Hshld Appl/Elect.497
Shoes 90 Apparel & Accessories Other Specialty Retail 341
General merchandise stores 1,424 General Merchadising Building Materials 662
Drug stores*489 Drug & Sundries Drug & Sundries 489
Supermarkets*1,332 Food & Groceries Food & Groceries 1,576
All other food stores*244 Food & Groceries Eating & Drinking 1,609
Limited-service restaurants 770 Eating & Drinking Auto Parts & Accsy 185
Full-service eating and drinking places 839 Eating & Drinking Misc-Other Retail 849
Household and home furnishings 263 Furniture & Hshld Appl/Elect.Retail & Dining (Auto-Fuel Excld)8,400
Household appliance dealers 233 Furniture & Hshld Appl/Elect.Service stations 1,541
Building materials 662 Building Materials Auto & Vehicle Sales 1,522
New motor vehicle dealers 1,278 Auto & Vehicle Sales Retail & Dining (Auto-Fuel Incld)11,463
Used motor vehicle dealers 170 Auto & Vehicle Sales
Automotive supplies and parts 185 Auto Parts & Accsy
RV and all other vehicles 75 Auto & Vehicle Sales
Service stations 1,541 Service stations
Gifts, art goods, and novelties 42 Other Specialty Retail
Sporting goods 125 Other Specialty Retail
Florists 13 Other Specialty Retail
Photographic equipment and supplies 10 Other Specialty Retail
Book, Periodical, and Music Stores 62 Other Specialty Retail
Office Supplies and Stationery Stores 113 Misc-Other Retail
Jewelry 90 Other Specialty Retail
Computer and Software Stores 151 Misc-Other Retail
Packaged liquor stores 93 Misc-Other Retail
Second-hand merchandise 22 Misc-Other Retail
Farm and garden supply stores 67 Misc-Other Retail
Fuel and ice dealers 0 Misc-Other Retail
Miscellaneous retail nec 403 Misc-Other Retail
Retail Stores Totals (Excld Non-Store)11,463 --
All Other Outlets n.a.p.Not A Part
Totals All Outlets n.a.p.--
Note: * Expenditure figure shown is for taxable and non-taxable items combined. Non-taxable drug-sundry & food-grocery sales estimated to
equal 35% of total sales for these store-type activities
Source: California State Board of Equalization; Alfred Gobar Associates
Gateway-TA-Potential/Bridge
Exhibit III-9
Per Capita Spending Potential of Trade Area Consumers1
2016 Consumer Potential Metro As
Retail Store-Group Category State Kern Co Metro Area % of State
GAFO Retail Activity 4,476$ 3,943$ 4,095$ 91.5%
General Merchadising 1,644 1,512 1,571 95.6%
Apparel & Accessories 887 755 785 88.5%
Furniture & Hshld Appl/Elect.573 488 507 88.5%
Other Specialty-Misc Retail 1,373 1,187 1,231 89.7%
Building Materials 763 650 676 88.5%
Drug & Sundries 564 473 492 87.2%
Food & Groceries 1,818 1,558 1,616 88.9%
Eating & Drinking 1,857 1,639 1,691 91.1%
Auto Parts & Accsy 213 176 184 86.4%
Retail & Dining (Auto-Fuel Excld)9,692$ 8,439$ 8,754$ 90.3%
Service stations 1,778 1,510 1,569 88.3%
Auto & Vehicle Sales 1,757 1,525 1,581 90.0%
Retail & Dining (Auto-Fuel Incld)13,227$ 11,474$ 11,904$ 90.0%
2019 Consumer Potential Metro As
Retail Store-Group Category State Kern Co Metro Area % of State
GAFO Retail Activity 4,708$ 4,175$ 4,344$ 92.3%
General Merchadising 1,729 1,601 1,667 96.4%
Apparel & Accessories 933 800 833 89.3%
Furniture & Hshld Appl/Elect.603 517 538 89.3%
Other Specialty-Misc Retail 1,444 1,257 1,306 90.5%
Building Materials 803 689 717 89.3%
Drug & Sundries 594 500 522 87.9%
Food & Groceries 1,912 1,650 1,715 89.7%
Eating & Drinking 1,953 1,735 1,794 91.9%
Auto Parts & Accsy 224 187 196 87.2%
Retail & Dining (Auto-Fuel Excld)10,194$ 8,935$ 9,287$ 91.1%
Service stations 1,870 1,599 1,665 89.0%
Auto & Vehicle Sales 1,848 1,614 1,677 90.8%
Retail & Dining (Auto-Fuel Incld)13,912$ 12,149$ 12,629$ 90.8%
Note
1 - Identified capita potential includes taxable and non-taxable sale of drug & sundries and food & groceries
Source: Bureau of Labor Statistics - Household Expenditure Survey; State Board of Equalization;
Department of Finance; Alfred Gobar Associates
Gateway-TA-Potential_6-10-14-Plan/Capita
Exhibit III-10 WORKSHEET
Summary of Retail Anchor Facilities Within Bakersfield Metro Area Summary of Retail Anchor Facilities Within Bakersfield Metro Area
North-South-East-West Quadrant Location of Existing Retail Anchors
Absolute Totals Effective Average Relative Mix of Totals
Quadrant Location Storefront Square Footage Vacancy Size of Storefront Square Footage
From Site Locations Total Vacant Rate Anchor Locations Total Vacant
Southeast < 3 Miles 1 6,680 0 0.0%6,680 0.3%0.1%0.0%
3+ Miles 7 101,305 0 0.0%14,472 2.3%1.0%0.0%
Southwest < 3 Miles 4 369,567 0 0.0%92,392 1.3%3.7%0.0%
3+ Miles 0 0 0 0.0%0 0.0%0.0%0.0%
Northeast1 < 3 Miles 8 156,558 0 0.0%19,570 2.6%1.6%0.0%
3+ Miles 70 1,991,888 327,450 16.4%28,456 22.7%19.8%44.7%
Northwest < 3 Miles 15 633,265 60,000 9.5%42,218 4.9%6.3%8.2%
3+ Miles 203 6,777,862 345,615 5.1%33,388 65.9%67.5%47.1%
Total:308 10,037,124 733,065 7.3%32,588 100%100%100%
Distance Location of Existing Retail Anchors
Absolute Totals Effective Average Relative Mix of Totals
Miles From Storefront Square Footage Vacancy Size of Storefront Square Footage
Site Location Locations Total Vacant Rate Anchor Locations Total Vacant
Under 3.0 28 1,166,070 60,000 5.1%41,645 9.1%11.6%8.2%
3.0 to 4.99 82 3,181,834 184,424 5.8%38,803 26.6%31.7%25.2%
5.0 to 6.99 67 1,403,228 115,850 8.3%20,944 21.8%14.0%15.8%
7.0 to 8.99 107 3,677,150 321,448 8.7%34,366 34.7%36.6%43.8%
9.0 or More 24 608,843 51,343 8.4%25,368 7.8%6.1%7.0%
Total:308 10,037,124 733,065 7.3%32,588 100%100%100%
Selected Anchor Store Groups Within Metro Area
Less Than 3 Miles Beyond 3 Miles Bakersfield Metro Area Overall
Retail Storefront Anchor Storefront Anchor Storefront Anchor Storefront Floor Area
Store Group Locations Floor Area Locations Floor Area Locations Floor Area Mix Mix
General Merchdse 4 386,647 57 2,908,391 61 3,295,038 19.8%32.8%
Apparel & Accsy 3 109,869 21 348,966 24 458,835 7.8%4.6%
Furn-Elect-Appl 2 55,509 30 458,463 32 513,972 10.4%5.1%
Other Specialties 0 0 28 573,736 28 573,736 9.1%5.7%
Home Impvt-Misc 3 174,649 29 1,152,838 32 1,327,487 10.4%13.2%
Pharmacy & Drug 5 62,659 29 487,103 34 549,762 11.0%5.5%
Food & Grocery 8 260,786 37 1,507,737 45 1,768,523 14.6%17.6%
Auto Parts-Tires-Etc 0 0 0 0 0 0 0.0%0.0%
Pers-Leisure Svcs 2 55,951 22 608,005 24 663,956 7.8%6.6%
Bus-Prof-Other Svcs 0 0 7 152,752 7 152,752 2.3%1.5%
Vacant 1 60,000 20 673,065 21 733,065 6.8%7.3%
Total:28 1,166,070 280 8,871,054 308 10,037,124 100%100%
Note:
1 Vacant space identified within Northeast quadrant beyond 3 miles includes about 223,700 square feet within
the East Hills Center Mall previously occupied by Mervyns, Harris, and Gotschalks. Excluding these three
anchors, vacant space totals 103,800 square feet or 5.9% of remaining space.
Source: March-April 2014 field audit by Alfred Gobar Associates supplemented with Google Earth Pro & CoStar Group realty data
Bakersfield-Gateway-Database_Mar-14/10/15/2014
EXHIBIT III-11
Retail Anchor Facilities Surveyed
Bakersfield Metro Area - March 2014
Store Square Dist. From Quadrant
Ref.Store Name Street Address Footage Site Location
Gen Mchdse-Traditional Dept Stores
TD1 Sears 3001 Ming Ave, Bakersfield 203,384 3.9 NW
TD2 Macys 2601 Ming Ave, Bakersfield 156,465 3.9 NW
TD3 JC Penny 2501 Ming Ave, Bakersfield 149,170 3.9 NW
Total:509,019
Gen Mchdse-Discount Dept Stores
DD1 Wal-Mart 6225 Colony St, Bakersfield 213,328 1.1 SW
DD2 Costco 4900 Panama Ln, Bakersfield 141,064 2.3 NW
DD3 K-Mart 3600 Wilson Rd, Bakersfield 92,931 3.8 NW
DD4 Target Greatlands 2901 Ming Ave, Bakersfield 145,428 3.9 NW
DD5 Marshalls 3008 Ming Ave, Bakersfield 25,075 4.1 NW
DD6 T.J. Maxx 3412 Ming Ave, Bakersfield 16,274 4.2 NW
DD7 Walmart 5075 Gosford Rd, Bakersfield 223,557 4.5 NW
DD8 Sams Club 5626 Gosford Rd, Bakersfield 135,549 4.5 NW
DD9 Kohls 5253 Gosford Rd, Bakersfield 96,077 4.5 NW
DD10 Burlington Coat Factory 4400 California Ave, Bakersfield 45,898 6.2 NW
DD11 Costco 3800 Rosedale Hwy, Bakersfield 152,995 7.3 NW
DD12 Target Greatlands 11000 Stockdale Hwy, Bakersfield 139,513 7.5 NW
DD13 Wal-Mart 8400 Rosedale Hwy, Bakersfield 128,395 8.3 NW
DD14 Walmart 2601 Fashion Pl, Bakersfield 116,973 8.3 NE
DD15 Walmart (Expansion)2601 Fashion Pl, Bakersfield 40,600 8.3 NE
DD16 Target 9100 Rosedale Hwy, Bakersfield 138,549 8.5 NW
DD17 Kohls 9400 Rosedale Hwy, Bakersfield 102,044 8.5 NW
DD18 Target 3401 Mall View Rd, Bakersfield 99,956 8.6 NE
Total:2,054,206
Gen Mchdse-Limited Price Variety
DV1 Family Dollar 1507 Panama Ln, Bakersfield 10,340 1.0 NE
DV2 99 cent 1501 White Ln, Bakersfield 21,915 2.4 NE
DV3 Big Lots (TI's)4751 White Ln, Bakersfield 30,440 3.1 NW
DV4 Dollar General 5101 White Ln, Bakersfield 13,570 3.3 NW
DV5 Dollar Tree 2501 H St, Bakersfield 20,900 3.4 NE
DV6 Home Mart 2611 H St, Bakersfield 18,000 3.4 NE
DV7 Dollar General 3101 Wilson Rd, Bakersfield 28,364 3.6 NW
DV8 Big Lots 3580 Wilson Rd, Bakersfield 20,071 3.8 NE
DV9 Tuesday Morning 2500 New Stine Rd, Bakersfield 7,200 4.0 NW
DV10 99 Cent Only 4200 Ming Ave, Bakersfield 19,720 4.4 NW
DV11 Dollar Tree 4456 Ming Ave, Bakersfield 17,309 4.4 NW
DV12 Dollar Tree 7890 White Ln, Bakersfield 10,337 4.7 NW
DV13 Dollar Outlet 2305 Brundage Ln, Bakersfield 17,925 5.0 NW
DV14 Family Dollar 333 Union Ave, Bakersfield 8,000 5.5 NE
DV15 Dollar General Market 401 Union Ave, Bakersfield 20,707 5.6 NE
DV16 Dollar Tree 5430 Stockdale Hwy, Bakersfield 6,745 5.6 NW
DV17 Dollar Tree 10300 Main St, County 9,850 6.2 SE
DV18 Discount City 10302 Main St, County 6,350 6.2 SE
DV19 Family Dollar 2151 Chester Ave, Bakersfield 11,445 6.7 NW
DV20 Dollar General Market 1616 Niles St, Bakersfield 20,800 7.2 NE
DV21 Family Dollar 2110 Niles St, County 13,002 7.2 NE
DV22 Dollar Tree 1721 Golden State Ave, Bakersfield 21,661 7.5 NW
DV23 Dollar General Market 2900 Niles St, County 17,124 7.6 NE
DV24 Dollar Mart 2936 Niles St, County 5,395 7.6 NE
DV25 Dollar General Market 258 Bernard St, County 19,988 7.7 NE
DV26 Family Dollar 5905 Niles St, County 9,250 8.0 NE
DV27 Dollar Tree 6151 Niles St, County 25,175 8.1 NE
Bakersfield-Gateway-Anchor-Tables_Jun-14 10/15/2014 Page 1 of 8
EXHIBIT III-11 Cont'd
Retail Anchor Facilities Surveyed
Bakersfield Metro Area - March 2014
Store Square Dist. From Quadrant
Ref.Store Name Street Address Footage Site Location
DV28 Big Lots 2621 Fashion Pl, Bakersfield 18,884 8.3 NE
DV29 DD's Discounts 2693 Mt Vernon Ave, Bakersfield 25,000 8.5 NE
DV30 Family Dollar 2677 Mt Vernon Ave, Bakersfield 8,500 8.5 NE
DV31 99 Cent Only 2682 Mt Vernon Ave, Bakersfield 28,805 8.6 NE
DV32 Dollar Tree 2717 Calloway Dr, Bakersfield 25,948 8.8 NW
DV33 99 Cent Only 1121 Olive Dr, County 40,230 9.1 NW
DV34 Big Lots 1211 Olive Dr, County 28,780 9.1 NW
DV35 Dollar Tree 731 Airport Rd, County 22,890 9.1 NW
Total:630,620
Women's Apparel
WA1 Forever 21 2801 Ming Ave, Bakersfield 57,111 3.9 NW
WA2 Talbots 9000 Ming Ave, Bakersfield 6,973 6.2 NW
WA3 Dress Barn 9210 Rosedale Hwy, Bakersfield 8,475 8.5 NW
Total:72,559
Family & Misc. Apparel
FA1 Factory 2-U 1505 White Ln, Bakersfield 33,187 2.4 NE
FA2 Fallas Paredes 2300 White Ln, Bakersfield 68,222 2.6 NW
FA3 Melrose Fashions 2601 H St, Bakersfield 10,000 3.4 NE
FA4 Davids Bridal 1210 Wible Rd, Bakersfield 9,670 4.2 NW
FA5 Ross Dress For Less 3759 Ming Ave, Bakersfield 29,338 4.2 NW
FA6 Sports Wear Mart 4440 Ming Ave, Bakersfield 9,426 4.4 NW
FA7 Ross Dress 4 Less (TIs)4300 California Ave, Bakersfield 25,800 6.2 NW
FA8 Factory 2-U 2930 Niles St, County 11,345 7.6 NE
FA9 Fallas Paredes 6249 Niles St, County 25,003 8.1 NE
FA10 T-Shirt Outlet 6151 Niles St, County 13,227 8.1 NE
FA11 Ross Dress For Less 9000 Rosedale Hwy, Bakersfield 30,097 8.5 NW
FA12 Babies R Us 9280 Rosedale Hwy, Bakersfield 28,890 8.5 NW
Total:294,205
Shoes
S1 WSS (Wholesale Shoe Sale)1619 Panama Ln, Bakersfield 8,460 1.0 NE
S2 Sketchers 4480 Ming Ave, Bakersfield 8,773 4.4 NW
S3 WSS (Warehouse Shoe Sale)60 Chester Ave, Bakersfield 9,000 5.1 NW
S4 DB Shoes 4310 California Ave, Bakersfield 11,212 6.2 NW
S5 Gaurantee Shoe Center 2101 Chester Ave, Bakersfield 6,902 6.7 NW
S6 Sketchers 5981 Rosedale Hwy, County 12,000 7.5 NW
S7 Boot Barn 3910 Buck Owens Blvd, Bakersfield 15,970 8.0 NW
S8 WSS (Wholesale Shoe Sale)6025 Niles St, County 9,680 8.0 NE
S9 Famous Footwear 8920 Rosedale Hwy, Bakersfield 10,074 8.5 NW
Total:92,071
Furniture and Home Furnishings
FF1 Furniture Depot 4621 White Ln, Bakersfield 13,240 3.1 NW
FF2 Sleep-N-Air 5101 White Ln, Bakersfield 16,090 3.3 NW
FF3 Oak-Sofa Liquidators 3600 Stine Rd, Bakersfield 14,590 3.5 NW
FF4 MOR Furniture for Less 2200 Wible Rd, Bakersfield 44,723 3.9 NW
FF5 Valley Mattress 2180 Wible Rd, Bakersfield 5,428 3.9 NW
FF6 Summers Furniture Gallery 3601 Ming Ave, Bakersfield 14,770 4.2 NW
FF7 Hampton Place Interiors 4901 Stockdale Hwy, Bakersfield 6,063 5.4 NW
FF8 Weatherbys Furniture Guild 620 Chester Ave, Bakersfield 21,171 5.7 NW
FF9 Surroundings 4606 California Ave, Bakersfield 29,450 6.2 NW
FF10 Andy Richards 10925 Main St, County 7,800 6.3 SE
FF11 Timeless Furnishing 1918 Chester Ave, Bakersfield 15,002 6.6 NW
Bakersfield-Gateway-Anchor-Tables_Jun-14 10/15/2014 Page 2 of 8
EXHIBIT III-11 Cont'd
Retail Anchor Facilities Surveyed
Bakersfield Metro Area - March 2014
Store Square Dist. From Quadrant
Ref.Store Name Street Address Footage Site Location
FF12 Discount Furniture 701 Baker St, Bakersfield 9,153 6.7 NE
FF13 Red Door Interiors 1599 23rd St, Bakersfield 7,147 6.8 NW
FF14 Stinsons Furniture 1108 Baker St, Bakersfield 14,295 7.0 NE
FF15 Star Furniture 4209 Rosedale Hwy, County 14,582 7.2 NW
FF16 Slagles Mattress 5751 Rosedale Hwy, County 10,571 7.5 NW
FF17 Zs Please Mattress 9500 Brimhal Rd, Bakersfield 8,020 7.8 NW
FF18 Signature Mattress 3900 Chester Ave, Bakersfield 11,491 7.9 NW
FF19 Ashley Furniture 8915 Rosedale Hwy, Bakersfield 8,000 8.4 NW
Total:271,586
Misc Furnishings, Housewares & Bedding
FH1 Star Furniture 3025 Coffee Rd, Bakersfield 14,582 8.4 NW
FH2 Bed Bath & Beyond 5000 Stockdale Hwy, Bakersfield 29,688 5.5 NW
FH3 Home Goods 5510 Stockdale Hwy, Bakersfield 24,722 5.6 NW
FH4 Williams-Sonoma 9000 Ming Ave, Bakersfield 9,940 6.2 NW
FH5 Cost Plus 9240 Rosedale Hwy, Bakersfield 18,425 8.5 NW
FH6 Pier 1 Imports 9030 Rosedale Hwy, Bakersfield 10,989 8.5 NW
FH7 Pier 1 Imports 3800 Mall View Rd, Bakersfield 10,853 8.8 NE
Total:119,199
Electronics & Appliances
FE1 Urners - Appl/Elect 4110 Wible Rd, Bakersfield 50,509 2.6 NW
FE2 Sears Outlet 2300 White Ln, Bakersfield 5,000 2.6 NW
FE3 Aarons Comp/Elect 4127 Ming Ave, Bakersfield 7,900 4.3 NW
FE4 Aarons Comp/Elect 6473 Niles St, County 7,302 8.2 NE
FE5 Best Buy 8300 Rosedale Hwy, Bakersfield 43,926 8.3 NW
FE6 Aarons Comp/Elect 1125 Olive Dr, County 8,550 9.1 NW
Total:123,187
Fabrics
FAB1 Hancock Fabrics 5101 White Ln, Bakersfield 14,955 3.3 NW
FAB2 Jo Ann 3010 Ming Ave, Bakersfield 21,360 4.1 NW
FAB3 Annas Linens 4430 Ming Ave, Bakersfield 11,809 4.4 NW
FAB4 F & M Fabrics 2954 Niles St, County 14,898 7.6 NE
FAB5 Linens N Things 9300 Rosedale Hwy, Bakersfield 38,171 8.5 NW
Total:101,193
Hobby, Toy & Games
HTG1 Michaels 2720 Ming Ave, Bakersfield 14,670 4.1 NW
HTG2 Toys R Us 3792 Ming Ave, Bakersfield 43,064 4.3 NW
HTG3 Hobbby Lobby 4450 California Ave, Bakersfield 58,034 6.2 NW
HTG4 Beverly Crafts & Fabrics 2819 F St, Bakersfield 16,003 7.2 NW
HTG5 Michaels 9350 Rosedale Hwy, Bakersfield 24,042 8.5 NW
Total:155,813
Sporting Goods
SG1 Big 5 3214 Ming Ave, Bakersfield 6,984 4.1 NW
SG2 Sports Authority 4821 Ming Ave, Bakersfield 49,575 4.4 NW
SG3 Sports Chalet 5200 Stockdale Hwy, Bakersfield 42,000 5.5 NW
SG4 Sniders Cyclery 2700 Union Ave, Bakersfield 11,035 7.2 NE
SG5 Americas Greatest Surplus 3530 Chester Ave, Bakersfield 9,993 7.6 NW
SG6 Action Sports 9500 Brimhal Rd, Bakersfield 20,110 7.8 NW
SG7 Big 5 3203 Mall View Rd, Bakersfield 15,602 8.6 NE
Total:155,299
Bakersfield-Gateway-Anchor-Tables_Jun-14 10/15/2014 Page 3 of 8
EXHIBIT III-11 Cont'd
Retail Anchor Facilities Surveyed
Bakersfield Metro Area - March 2014
Store Square Dist. From Quadrant
Ref.Store Name Street Address Footage Site Location
Books, Music & Media
BK1 Lifeway Christian Store 2140 Wible Rd, Bakersfield 11,347 3.9 NW
BK2 Borders 4980 Stockdale Hwy, Bakersfield 25,000 5.5 NW
BK3 Barnes & Noble 4001 California Ave, Bakersfield 24,683 6.0 NW
Total:61,030
Pets & Pet Supply
PS1 Pets Mart 4100 Ming Ave, Bakersfield 34,673 4.4 NW
PS2 Petco 5151 Gosford Rd, Bakersfield 14,474 4.5 NW
PS3 Village Pet Supplies 8200 Stockdale Hwy, Bakersfield 10,186 6.6 NW
PS4 Round-Up Pet Supply 5805 Rosedale Hwy, County 5,727 7.5 NW
PS5 CLS Pet Store 3105 F St, Bakersfield 13,914 7.5 NW
PS6 Petco 8220 Rosedale Hwy, Bakersfield 14,364 8.3 NW
PS7 PetSmart 2661 Oswell St, Bakersfield 36,705 8.8 NE
Total:130,043
Office Supply & Stationary
OS1 Office Max 3761 Ming Ave, Bakersfield 17,729 4.2 NW
OS2 Office Depot 5600 Stockdale Hwy, Bakersfield 26,296 5.6 NW
OS3 GW School Supply 4220 California Ave, Bakersfield 9,232 6.2 NW
OS4 Office Max 2635 Mt Vernon Ave, Bakersfield 19,656 8.3 NE
OS5 Office Depot 8800 Rosedale Hwy, Bakersfield 21,811 8.3 NW
Total:94,724
Thrift & Used Merchandise
TS1 Goodwill 4901 Stine Rd, Bakersfield 27,971 2.8 NW
TS2 Salvation Army 4130 Ming Ave, Bakersfield 7,530 4.4 NW
TS3 Great American Antiques 3515 19th St, Bakersfield 13,637 6.6 NE
TS4 Central Park Antique Mall 3515 19th St, Bakersfield 11,479 6.6 NE
TS5 Mill Creek Antiques 3515 19th St, Bakersfield 10,000 6.6 NE
TS6 Woolworths Antique Mall 1400 19th St, Bakersfield 9,638 6.6 NW
TS7 Salvation Army 120 19th St, Bakersfield 5,000 6.6 NW
TS8 Thrift Store 20 Bernard St, Bakersfield 14,407 7.6 NE
TS9 Goodwill 2671 Oswell St, Bakersfield 9,700 8.8 NE
Total:109,362
Other-Specialty Retail
OSR1 Guitar Center 3428 Ming Ave, Bakersfield 15,935 4.2 NW
OSR2 Party City 5544 Stockdale Hwy, Bakersfield 12,950 5.6 NW
OSR3 Olcotts 9000 Ming Ave, Bakersfield 15,000 6.2 NW
OSR4 Ulta 9000 Ming Ave, Bakersfield 10,522 6.2 NW
OSR5 Lassen Natural Foods 4308 California Ave, Bakersfield 16,995 6.2 NW
OSR6 Front Porch Music 1711 19th St, Bakersfield 7,070 6.6 NW
OSR7 Henlys Photos 2000 H St, Bakersfield 6,029 6.6 NW
OSR8 Aaron Brothers 9010 Rosedale Hwy, Bakersfield 5,993 8.5 NW
OSR9 Party City 2710 Company Dr, Bakersfield 10,962 8.7 NW
Total:101,456
Bakersfield-Gateway-Anchor-Tables_Jun-14 10/15/2014 Page 4 of 8
EXHIBIT III-11 Cont'd
Retail Anchor Facilities Surveyed
Bakersfield Metro Area - March 2014
Store Square Dist. From Quadrant
Ref.Store Name Street Address Footage Site Location
Building Material-Home Improvement Centers
HIC1 Lowes 6200 Colony St, Bakersfield 140,287 1.1 SW
HIC2 Home Depot 4001 Ming Ave, Bakersfield 98,731 4.3 NW
HIC3 Home Depot 4700 Gosford Rd, Bakersfield 129,839 4.5 NW
HIC4 Lowes 7825 Rosedale Hwy, Bakersfield 174,424 7.9 NW
HIC5 Home Depot 2655 Mt Vernon Ave, Bakersfield 116,210 8.3 NE
HIC6 Home Depot 8700 Rosedale Hwy, Bakersfield 138,460 8.3 NW
HIC7 Lowe's 1601 Columbus St, Bakersfield 141,834 8.4 NE
Total:939,785
Building, Hardware & Supplies
BHS1 TSC Tractor Supply 2749 Calloway Dr, Bakersfield 20,827 8.8 NW
BHS2 Bugni Hardware-Feed 2612 Taft Hwy, County 6,391 1.1 SW
BHS3 Floyds True Value Hardware 2020 Chester Ave, County 11,271 3.8 NW
BHS4 Dunn Edwards Paint 3929 Ming Ave, Bakersfield 13,594 4.2 NW
BHS5 Orchard Supply & Hardware 6465 Ming Ave, Bakersfield 54,139 4.6 NW
BHS6 Lamont General Store 10405 Main St, County 12,100 6.2 SE
BHS7 Harbor Frieght Tools 3745 Rosedale Hwy, Bakersfield 28,172 7.1 NW
BHS8 Floyds True Value Hardware 3650 Chester Ave, Bakersfield 7,217 7.9 NW
Total:153,711
Grocery Supermarkets
GS1 Vallarta Supermarket 1515 Panama Ln, Bakersfield 40,195 1.0 NE
GS2 Pumpkin Center Market 3001 Taft Hwy, County 9,561 1.3 SW
GS3 Albertsons 3500 Panama Ln, Bakersfield 51,048 1.5 NW
GS4 Fresh-N-Easy 6601 Stine Rd, Bakersfield 10,000 2.2 NW
GS5 Foods Co.1801 White Ln, Bakersfield 62,775 2.4 NW
GS6 Superior Grocers 2100 White Ln, Bakersfield 57,738 2.6 NW
GS7 Sams Supermarket 318 White Ln, County 9,600 2.7 NE
GS8 Smart and Final 3400 White Ln, Bakersfield 19,869 2.7 NE
GS9 Fresh Foods 4800 White Ln, Bakersfield 8,484 3.2 NW
GS10 Winco Foods 6801 Panama Ln, Bakersfield 88,988 3.3 NW
GS11 Vallarta Supermarket 2705 H St, Bakersfield 46,050 3.4 NE
GS12 Vons 3400 Stine Rd, Bakersfield 35,956 3.5 NW
GS13 Food Maxx 6200 White Ln, Bakersfield 53,312 3.9 NW
GS14 Food Maxx 4400 Ming Ave, Bakersfield 49,671 4.4 NW
GS15 Asia Market 7701 White Ln, Bakersfield 23,820 4.5 NW
GS16 Grocery Outlet 6421 Ming Ave, Bakersfield 17,857 4.6 NW
GS17 Albertsons 7900 White Ln, Bakersfield 39,789 4.7 NW
GS18 Albertsons 1520 Brundage Ln, Bakersfield 46,621 5.1 NW
GS19 Youngs Marketplace 3030 Brundage Ln, Bakersfield 28,339 5.1 NW
GS20 Fresh-N-Easy 5190 Stockdale Hwy, Bakersfield 15,980 5.5 NW
GS21 Vons 5700 Stockdale Hwy, Bakersfield 49,349 5.6 NW
GS22 Food Maxx 1115 Union Ave, Bakersfield 51,889 6.0 NE
GS23 Vons 9000 Ming Ave, Bakersfield 56,625 6.2 NW
GS24 County Fair Market 10425 Main St, County 19,500 6.2 SE
GS25 Albertsons 8200 Stockdale Hwy, Bakersfield 40,923 6.6 NW
GS26 Trader Joes 8200 Stockdale Hwy, Bakersfield 10,186 6.6 NW
GS27 Smart N Final 1751 Golden State Ave, Bakersfield 26,244 7.5 NW
GS28 Vallarta Supermarket 5951 Niles St, County 43,674 8.0 NE
GS29 Food Maxx 4128 Chester Ave, Bakersfield 45,688 8.0 NW
GS30 Food Maxx 6347 Niles St, County 67,179 8.1 NE
GS31 Foods Co.2505 Haley St, Bakersfield 73,288 8.2 NE
GS32 Foods Co.8200 Rosedale Hwy, Bakersfield 51,458 8.3 NW
Bakersfield-Gateway-Anchor-Tables_Jun-14 10/15/2014 Page 5 of 8
EXHIBIT III-11 Cont'd
Retail Anchor Facilities Surveyed
Bakersfield Metro Area - March 2014
Store Square Dist. From Quadrant
Ref.Store Name Street Address Footage Site Location
GS33 Albertsons 2691 Mt Vernon Ave, Bakersfield 47,271 8.5 NE
GS34 Fresh-N-Easy 11200 Brimhal Rd, Bakersfield 14,000 8.5 NW
GS35 Fresh-N-Easy 111 Roberts Ln, County 15,000 8.8 NW
GS36 Smart N Final 2749 Calloway Dr, Bakersfield 26,667 8.8 NW
GS37 Vallarta Supermarket 2309 Niles St, Bakersfield 26,227 8.9 NE
GS38 Winco Foods 4200 Coffee Rd, Bakersfield 90,659 8.9 NW
GS39 Vons 4500 Coffee Rd, Bakersfield 55,336 9.1 NW
GS40 Von's 5360 Olive Dr, County 36,800 9.4 NW
GS41 Save-Mart 9600 Hageman Rd, Bakersfield 56,667 9.5 NW
GS42 Albertsons 6045 Coffee Rd, Bakersfield 54,806 10.0 NW
GS43 Vons 2401 Chester Ave, County 30,786 10.1 NW
GS44 Fresh-N-Easy 11000 Olive Dr, Bakersfield 14,230 11.3 NW
GS45 Albertsons 13046 Rosedale Hwy, County 48,418 12.9 NW
Total:1,768,523
Drug & Sundry
DS1 Rite-Aid 3225 Panama Ln, Bakersfield 15,901 1.4 NW
DS2 CVS 6500 Union Ave, Bakersfield 12,992 1.4 NE
DS3 Walgreens 3301 Panama Ln, Bakersfield 13,543 1.4 NW
DS4 Ideal Pharmacy 9905 Union Ave, County 6,680 1.5 SE
DS5 Walgreens 4100 White Ln, Bakersfield 13,543 2.9 NW
DS6 Walgreens 3315 H St, Bakersfield 14,605 3.0 NE
DS7 Longs Drugs 3500 Stine Rd, Bakersfield 23,791 3.5 NW
DS8 Rite-Aid 1425 H St, County 16,477 4.1 SE
DS9 Walgreens 4306 Ming Ave, Bakersfield 13,584 4.4 NW
DS10 Walgreens 4949 Gosford Rd, Bakersfield 14,000 4.5 NW
DS11 Rite-Aid 8000 White Ln, Bakersfield 26,325 4.7 NW
DS12 Walgreens 40 Chester Ave, Bakersfield 14,750 5.1 NW
DS13 CVS 5184 Stockdale Hwy, Bakersfield 13,225 5.5 NW
DS14 Rite-Aid 8008 Panama Rd, County 29,228 6.1 SE
DS15 Rite-Aid 9000 Ming Ave, Bakersfield 16,836 6.2 NW
DS16 CVS 8200 Stockdale Hwy, Bakersfield 24,459 6.6 NW
DS17 Walgreens 3420 Buena Vista Rd, Bakersfield 14,820 6.7 NW
DS18 Rite-Aid 1601 23rd St, Bakersfield 16,516 6.8 NW
DS19 Niles Drugs 1400 Niles St, Bakersfield 6,222 7.1 NE
DS20 CVS 11300 Ming Ave, Bakersfield 11,617 7.3 NW
DS21 Rite-Aid 1107 Calloway Dr, Bakersfield 16,473 7.9 NW
DS22 Walgreens 3815 Niles St, County 14,848 7.9 NE
DS23 Walgreens 2628 Mt Vernon Ave, County 11,809 8.2 NE
DS24 Rite-Aid 2505 Bernard Rd, Bakersfield 17,800 8.2 NE
DS25 CVS 6500 Niles St, County 12,199 8.3 NE
DS26 CVS 2690 Mt Vernon Ave, Bakersfield 26,186 8.6 NE
DS27 CVS 9628 Rosedale Hwy, Bakersfield 14,744 8.7 NW
DS28 CVS 4400 Coffee Rd, Bakersfield 20,993 9.1 NW
DS29 Rite-Aid 715 Airport Rd, County 16,538 9.1 NW
DS30 Walgreens 9550 Hageman Rd, Bakersfield 13,703 9.5 NW
DS31 Rite-Aid 2646 Allen Rd, County 13,870 10.0 NW
DS32 Rite-Aid 6001 Coffee Rd, Bakersfield 16,872 10.0 NW
DS33 Rite-Aid 100 China Grade Loop, County 16,080 10.1 NE
DS34 Rite-Aid 11200 Olive Dr, Bakersfield 18,075 11.3 NW
Total:549,304
Bakersfield-Gateway-Anchor-Tables_Jun-14 10/15/2014 Page 6 of 8
EXHIBIT III-11 Cont'd
Retail Anchor Facilities Surveyed
Bakersfield Metro Area - March 2014
Store Square Dist. From Quadrant
Ref.Store Name Street Address Footage Site Location
Fitness Centers
FIT1 Body X-Change Fitness Center 3515 Panama Ln, Bakersfield 18,370 1.4 NW
FIT2 In Shape City 4801 White Ln, Bakersfield 43,271 3.1 NW
FIT3 Body X-Change Fitness Center 7701 White Ln, Bakersfield 35,208 4.5 NW
FIT4 24-Hour Fitness 4302 Gosford Rd, Bakersfield 23,057 4.6 NW
FIT5 In-Shape City 6901 Ming Ave, Bakersfield 9,180 4.9 NW
FIT6 In-Shape City (TIs)4230 California Ave, Bakersfield 34,523 6.2 NW
FIT7 Body X-Change Fitness Center 1130 Truxtan Ave, Bakersfield 7,452 6.4 NE
FIT8 24-Hour Fitness 3633 Rosedale Hwy, Bakersfield 22,060 7.1 NW
FIT9 Body X-Change Fitness Center 9500 Brimhal Rd, Bakersfield 9,270 7.8 NW
FIT10 24-Hour Fitness 3400 Bernard St, Bakersfield 18,013 8.6 NE
FIT11 In-Shape Fitness 3409 Coffee Rd, Bakersfield 26,502 8.6 NW
FIT12 Body X-Change Fitness Center 13019 Stockdale Hwy, Bakersfield 14,000 8.7 NW
FIT13 Body X-Change Fitness Center 2749 Calloway Dr, Bakersfield 36,114 8.8 NW
FIT14 In-Shape City 2681 Oswell St, Bakersfield 24,000 8.9 NE
FIT15 Fitness 19 9620 Hageman Rd, Bakersfield 11,499 9.5 NW
FIT16 Body X-Change Fitness Center 11206 Olive Dr, Bakersfield 7,095 11.3 NW
Total:339,614
Multi-Plex Cinemas
C1 Reading Cinemas 16 Screens)2000 Wible Rd, Bakersfield 62,677 3.9 NW
C2 Maya Cinema (16 Screens)1000 California Ave, Bakersfield 67,106 6.1 NW
C3 Regal Cinema (14 Screens)9000 Ming Ave, Bakersfield 56,885 6.2 NW
C4 $1 Movies (6 Screens)4200 California Ave, Bakersfield 17,298 6.2 NW
C5 Regency Theaters (10 Screens)3100 Mall View Rd, Bakersfield 35,487 8.5 NE
Total:239,453
Vacant Anchor Space
VAC1 Vacant 2300 White Ln, Bakersfield 60,000 2.6 NW
VAC2 Vacant 1801 Planz Rd, Bakersfield 13,690 3.0 NE
VAC3 Vacant 5101 White Ln, Bakersfield 10,635 3.3 NW
VAC4 Vacant 2160 Wible Rd, Bakersfield 5,428 3.9 NW
VAC5 Vacant 2626 Ming Ave, Bakersfield 29,634 4.1 NW
VAC6 Vacant 1300 Wible Rd, Bakersfield 102,650 4.2 NW
VAC7 Vacant 2207 Brundage Ln, Bakersfield 22,387 5.0 NW
VAC8 Vacant 4901 Stockdale Hwy, Bakersfield 6,063 5.4 NW
VAC9 Vacant 4001 California Ave, Bakersfield 25,560 6.0 NW
VAC10 Vacant 4450 California Ave, Bakersfield 60,000 6.2 NW
VAC11 Vacant 1700 23rd St, Bakersfield 9,594 6.8 NW
VAC12 Vacant 2407 Chester Ave, Bakersfield 14,633 6.9 NW
VAC13 Vacant 2958 Niles St, County 28,014 7.6 NE
VAC14 Vacant 3810 Niles St, County 7,640 7.9 NE
VAC15 Vacant 3000 Mall View Rd, Bakersfield 75,325 8.5 NE
VAC16 Vacant 3200 Mall View Rd, Bakersfield 75,325 8.5 NE
VAC17 Vacant 2800 Mall View Rd, Bakersfield 73,062 8.5 NE
VAC18 Vacant 3501 Mall View Rd, Bakersfield 17,020 8.7 NE
VAC19 Vacant 2733 Calloway Dr, Bakersfield 45,062 8.8 NW
VAC20 Vacant 3711 Columbus St, Bakersfield 37,374 9.0 NE
VAC21 Vacant 8200 Hageman Rd, Bakersfield 13,969 9.2 NW
Total:733,065
Bakersfield-Gateway-Anchor-Tables_Jun-14 10/15/2014 Page 7 of 8
EXHIBIT III-11 Cont'd
Retail Anchor Facilities Surveyed
Bakersfield Metro Area - March 2014
Store Square Dist. From Quadrant
Ref.Store Name Street Address Footage Site Location
Existing Retail Anchor Facilities Surveyed
Store Group Activity Store-Type Classification (Sq. Ft.)Storefronts Avg Size
TD General Merchandise Gen Mchdse-Traditional Dept Stores 509,019 3 169,673
DD General Merchandise Gen Mchdse-Discount Dept Stores 2,054,206 18 114,123
DV General Merchandise Gen Mchdse-Limited Price Variety 630,620 35 18,018
WA Apparel & Accessories Women's Apparel 72,559 3 24,186
FA Apparel & Accessories Family & Misc. Apparel 294,205 12 24,517
S Apparel & Accessories Shoes 92,071 9 10,230
FF Furnishings & Electronics Furniture and Home Furnishings 271,586 19 14,294
FH Furnishings & Electronics Misc Furnishings, Housewares & Bedding 119,199 7 17,028
FE Furnishings & Electronics Electronics & Appliances 123,187 6 20,531
FAB Other Specialty & Misc.Fabrics 101,193 5 20,239
HTG Other Specialty & Misc.Hobby, Toy & Games 155,813 5 31,163
SG Other Specialty & Misc.Sporting Goods 155,299 7 22,186
BK Other Specialty & Misc.Books, Music & Media 61,030 3 20,343
PS Other Specialty & Misc.Pets & Pet Supply 130,043 7 18,578
OS Other Specialty & Misc.Office Supply & Stationary 94,724 5 18,945
TS Other Specialty & Misc.Thrift & Used Merchandise 109,362 9 12,151
OSR Other Specialty & Misc.Other-Specialty Retail 101,456 9 11,273
HIC Building Materials & Supplies Building Material-Home Improvement Centers 939,785 7 134,255
BHS Building Materials & Supplies Building, Hardware & Supplies 153,711 8 19,214
GS Food & Groceries Grocery Supermarkets 1,768,523 45 39,301
DS Drug & Sundries Drug & Sundry 549,304 34 16,156
FIT Recreation-Entertainment Fitness Centers 339,614 16 21,226
C Recreation-Entertainment Multi-Plex Cinemas 239,453 5 47,891
VAC Vacant Vacant Anchor Space 733,065 21 34,908
9,799,025 298 32,883
Note:
Quadrant location based on following:
Source: Field Audit By Alfred Gobar Associates - March 2014
NW
SESW
NE
Bakersfield-Gateway-Anchor-Tables_Jun-14 10/15/2014 Page 8 of 8
Exhibit III-12
Planned & Proposed Retail Center Development
Bakersfield Metro Area
Project Name Entitlement Status Overall Conceptual Building Count and Building Size (Sq Ft)
Project Location Construction Start Building Area On-Site 100,000 50,000 20,000 10,000 5,000 Under
Type Center Marketing Status Rentable SF Buildings and Larger to 99,000 to 49,999 to 19,999 to 9,999 5,000
The Commons City Approved - 2006 1,413,300 39 4 4 2 6 16 7
7th Standard Rd/Coffee Rd No Final Map Activity Comment: Site concept plan calls for roughly 795,000 SF of Super Regional & 620,000 SF of
Super Regional Center Const Start - TBD Community serving retail. Retail part of SACO Ranch Comm'l Center that includes 333,000 SF
Speculative Listing of office & 1.25M SF of industrial. Preliminary concepts show 3 large spaces >120,000 SF plus
another 2 spaces >50,000 SF. Marketing-Leasing brochure not available. Roughly 17% of
space <20,000 SF in size.
Panama Grove City Approved - 2012 585,600 14 2 1 1 - 7 3
Panama Ln/Gosford Rd No Final Map Activity Comment: Conceptual site plan only. Pre-leasing started in 2012 but no updated
Power Center Const Start - TBD Marketing-Leasing informaiton available. Largest contiguous lease space shown is102,000 SF
Speculative Listing with another 8 between 20,000 & 40,000 SF. Roughly 10% of space <20,000 SF in size.
7th Standard Center Plat Map Approval 51,900 7 - - 1 1 1 4
7th Standard Rd/SR65 Hwy No Final Map Activity Comment: Retail site has plat plan approval only. Retail center now under Bank of the Sierra
Neighborhood Center Const Start - TBD ownership. Marketing-Leasing brochue not available. Largest contiguous lease space shown is
Speculative Listing 12,000 SF. No lease space >20,000 SF.
Heritage Plaza City Approved - 2007 30,900 2 - - 1 - - 1
S Union Ave/N-O Chester Ave Site Const - Stopped Comment: Construction began on primary building in 2008, but remains unfinished.
Neighborhood Center No Listing Available Construction site closed. Marketing-Leasing brochure not available. Largest contigous lease
space shown is 15,000 SF. No lease space >20,000 SF.
2,081,700 Total Planned & Proposed Retail Center Development
Source: City of Bakersfield Community Development Department; CoStar Group; Alfred Gobar Associates.
CoStar-Pipeline_Bfield-Metro_Jul-14/Pipeline Sum
Exhibit III-13
Bakersfield Metro Trade Area Retail Growth Simulation1
2012 - 2016 Interim Period To Phase 1 Development
Estimate of Estimate of Interim Growth In Annual Sales Simulated New Growth
Retail Sales Retail Sales Total Sales Existing Store New Growth 2016 Floor Area
Retail Store-Group Category 2012 2016 Increase Increase Increase Sales/SF Supported
GAFO Retail Activity 1,917,070$ 2,295,471$ 378,401$ 142,532$ 235,869$ 250$ 942,000
General Merchadising 1,023,362 1,229,279 205,917 76,086 129,831 214 607,000
Apparel & Accessories 292,882 351,109 58,227 21,775 36,452 322 113,000
Furniture & Hshld Appl/Elect.195,883 235,067 39,184 14,564 24,620 312 79,000
Other Specialty-Misc Retail 404,944 480,017 75,073 30,107 44,966 314 143,000
Building Materials 329,912 394,907 64,996 24,528 40,467 304 133,000
Drug & Sundries 273,411 324,658 51,246 20,328 30,919 - -
Food & Groceries 818,889 974,473 155,584 60,883 94,701 - -
Eating & Drinking 659,607 786,779 127,172 49,041 78,131 400 195,000
Auto Parts & Accsy 108,994 128,791 19,796 8,104 11,693 254 46,000
Retail & Dining (Auto-Fuel Excld)4,107,883$ 4,905,079$ 797,195$ 305,416$ 491,780$ 374$ 1,316,000
Service stations 875,718 1,030,161 154,442 65,108 89,334 n.a.n.a.
Auto & Vehicle Sales 1,035,293 1,242,315 207,022 76,973 130,050 n.a.n.a.
Retail & Dining (Auto-Fuel Incld)6,018,895$ 7,177,555$ 1,158,660$ 447,497$ 711,163$ n.a.1,316,000
Bakersfield Gateway Retail Focus:2 4,107,883$ 4,905,079$ 797,195$ 305,416$ 491,780$ 374$ 1,316,000
Equivalent CAGR:n.a.n.a.4.5%1.8%Approx. 2.7%n.a.n.a.
2012 - 2019 Interim Period To Phase 2 Development
Estimate of Estimate of Interim Growth In Annual Sales Simulated New Growth
Retail Sales Retail Sales Total Sales Existing Store New Growth 2019 Floor Area
Retail Store-Group Category 2012 2019 Increase Increase Increase Sales/SF Supported
GAFO Retail Activity 1,917,070$ 2,543,216$ 626,146$ 256,342$ 369,803$ 253$ 1,460,000
General Merchadising 1,023,362 1,365,783 342,421 136,840 205,581 216 952,000
Apparel & Accessories 292,882 389,467 96,585 39,163 57,422 332 173,000
Furniture & Hshld Appl/Elect.195,883 260,907 65,024 26,193 38,832 322 121,000
Other Specialty-Misc Retail 404,944 527,059 122,115 54,147 67,968 318 214,000
Building Materials 329,912 437,506 107,594 44,114 63,480 308 206,000
Drug & Sundries 273,411 355,876 82,465 36,559 45,906 - -
Food & Groceries 818,889 1,072,395 253,507 109,498 144,008 - -
Eating & Drinking 659,607 869,102 209,495 88,200 121,295 406 299,000
Auto Parts & Accsy 108,994 140,799 31,804 14,574 17,230 258 67,000
Retail & Dining (Auto-Fuel Excld)4,107,883$ 5,418,894$ 1,311,011$ 549,289$ 761,722$ 375$ 2,032,000
Service stations 875,718 1,119,710 243,991 117,097 126,894 n.a.n.a.
Auto & Vehicle Sales 1,035,293 1,380,798 345,505 138,435 207,070 n.a.n.a.
Retail & Dining (Auto-Fuel Incld)6,018,895$ 7,919,402$ 1,900,507$ 804,821$ 1,095,686$ n.a.2,032,000
Bakersfield Gateway Retail Focus:2 4,107,883$ 5,418,894$ 1,311,011$ 549,289$ 761,722$ 375$ 2,032,000
Equivalent CAGR:n.a.n.a.4.0%1.8%Approx. 2.2%n.a.n.a.
Notes:
1 - All sales figures are in thousands ($000's), except for estimated sales per square foot and building floor area.
2 - The State Board of Equalization does not include consumer and entertainment services such personal services, repair services, cinemas, finance
and banking services, etc. as part of the "Retail Stores" group in its detailed reporting of taxable sales activity. Instead these activities are
included as part of a much larger group of aggregated activities reported as "Business and Personal Services" and "All Other Outlets" and not
included in the project description for this component of the retail analysis.
Source: State Board of Equalization; Urban Land Institute-International Council of Shopping Centers; Alfred Gobar Associates
Gateway-TA-Potential_6-10-14-Plan/Grwth-Residual
Exhibit III-14
Metro Trade Area Residual Support Potential1
Bakersfield Gateway Center, Bakersfield CA
2016 Residual Potential
Metro Area Sales Inflow Overal 2016 2016 Sales 2016 Residual Potential
Resident From Rural Metro Area Capture By Support As Share of
Retail Store-Group Category Potential Kern Co.Potential Existing Retail Potential Total Potential
GAFO Retail Activity 2,356,954$ 620,050$ 2,977,004$ 2,295,471$ 681,532$ 23%
General Merchadising 904,423 346,186 1,250,609 1,229,279 21,330 2%
Apparel & Accessories 451,752 36,015 487,768 351,109 136,659 28%
Furniture & Hshld Appl/Elect.291,925 116,700 408,625 235,067 173,558 42%
Other Specialty-Misc Retail 708,854 121,148 830,002 480,017 349,985 42%
Building Materials 388,950 54,132 443,082 394,907 48,175 11%
Drug & Sundries 283,208 5,271 288,479 324,658 - 0%
Food & Groceries 930,385 1,711 932,096 974,473 - 0%
Eating & Drinking 973,566 80,615 1,054,181 786,779 267,402 25%
Auto Parts & Accsy 106,085 - 106,085 128,791 - 0%
Retail & Dining (Auto-Fuel Excld)5,039,148$ 761,778$ 5,800,926$ 4,905,079$ 997,109$ 17%
Service stations 903,451 - 903,451 1,030,161 - 0%
Auto & Vehicle Sales 910,005 353,559 1,263,564 1,242,315 21,249 2%
Retail & Dining (Auto-Fuel Incld)6,852,604$ 1,115,338$ 7,967,942$ 7,177,555$ 1,018,359$ 13%
Bakersfield Gateway Retail Focus:2 5,039,148$ 761,778$ 5,800,926$ 4,905,079$ 997,109$ 17%
Share of Retail & Dining:100%100%100%100%100%n.a.
2019 Residual Potential
Metro Area Sales Inflow Overal 2019 2019 Sales 2019 Residual Potential
Resident From Rural Metro Area Capture By Support As Share of
Retail Store-Group Category Potential Kern Co.Potential Existing Retail Potential Total Potential
GAFO Retail Activity 2,616,705$ 688,341$ 3,305,046$ 2,543,216$ 761,829$ 23%
General Merchadising 1,004,096 384,643 1,388,739 1,365,783 22,956 2%
Apparel & Accessories 501,538 39,972 541,510 389,467 152,043 28%
Furniture & Hshld Appl/Elect.324,097 129,541 453,637 260,907 192,731 42%
Other Specialty-Misc Retail 786,974 134,185 921,159 527,059 394,100 43%
Building Materials 431,815 59,943 491,758 437,506 54,252 11%
Drug & Sundries 314,419 5,816 320,236 355,876 - 0%
Food & Groceries 1,032,919 1,892 1,034,810 1,072,395 - 0%
Eating & Drinking 1,080,859 89,383 1,170,242 869,102 301,140 26%
Auto Parts & Accsy 117,776 - 117,776 140,799 - 0%
Retail & Dining (Auto-Fuel Excld)5,594,493$ 845,376$ 6,439,868$ 5,418,894$ 1,117,222$ 17%
Service stations 1,003,017 - 1,003,017 1,119,710 - 0%
Auto & Vehicle Sales 1,010,293 392,877 1,403,170 1,380,798 22,372 2%
Retail & Dining (Auto-Fuel Incld)7,607,803$ 1,238,253$ 8,846,055$ 7,919,402$ 1,139,594$ 13%
Bakersfield Gateway Retail Focus:2 5,594,493$ 845,376$ 6,439,868$ 5,418,894$ 1,117,222$ 17%
Share of Retail & Dining:100%100%100%100%100%n.a.
Notes:
1 - All sales figures are in thousands ($000's), unless otherwise noted.
2 - The State Board of Equalization does not include consumer and entertainment services such personal services, repair
services, cinemas, finance and banking services, etc. as part of the "Retail Stores" group in its detailed reporting of taxable
sales activity. Instead these activities are included as part of a much larger group of aggregated activities reported as "Business
and Personal Services" and "All Other Outlets" and not included in the project description for this component of the retail analysis.
Source: State Board of Equalization; Alfred Gobar Associates
Gateway-TA-Potential_6-10-14-Plan/Grwth-Residual
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-1
Chapter IV
Lodging Market Potential
Lodging Industry Overview
Hotel lodging is a $163 Billion dollar industry serving domestic, international, leisure,
and business travel throughout the US. The lodging industry has realized very strong
revenue growth during the economic recovery as shown below.
National Room Rate and Lodging Sales Trends
Source: American Hotels & Lodging Association; Marcus & Millichap Hospitality Research; Alfred Gobar Associates
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
$130
$140
$150
$160
$170
$180
$30
$40
$50
$60
$70
$80
$90
$100
$110
$120
$130
$140
$150
$160
$170
$180
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Total Sales ($Billions)Avg Daily Rate (ADR)
Since 2009, total sales revenue has increased at a faster pace than the related
increase in average daily room revenue (ADR – describes effective sales revenue
collected per night of lodging after accounting for discounts, group rates, promotions,
etc.). From 2009 to 2013, ADR increased at an average annual rate of 3.1% while
total sales revenue increased by 6.7% per year on average. The more rapid increase
in total revenue is attributed to growing demand for overnight lodging, estimated to
account for roughly one-half the total increase in lodging revenue. The strong growth
in lodging demand becomes more evident by comparing annual occupancy against
the supply of available hotel rooms as shown below.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-2
National Occupancy and Room Supply Trends
Source: American Hotels & Lodging Association; Marcus & Millichap Hospitality Research; Alfred Gobar Associates
50%
52%
54%
56%
58%
60%
62%
64%
66%
68%
2.50
2.75
3.00
3.25
3.50
3.75
4.00
4.25
4.50
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Hotel Rooms Annual Occupancy
For several years prior to the Great Recession, the National supply of hotel rooms
remained virtually unchanged but existing operators enjoyed increasing levels of
occupancy performance (and sales revenue), as the two graphs above show. With
the onset of the recession, overall occupancy plummeted as consumers and
businesses curtailed travel. With the economic recovery now on more steady footing,
the overall occupancy rate has rebounded and is expected to exceed the occupancy
levels realized immediately prior to the recession. By comparison, the overall supply
of hotel rooms has increased but at a much more modest pace (0.9% annually
between 2009 and 2013). The strong resurgence in lodging demand coupled with the
modest increase in room supply are factors contributing to strong sales revenue
growth in the industry during the economic recovery.
Kern County Lodging Overview
Lodging market demand is driven by the need for overnight stays, commonly referred
to as room-night demand. Underlying factors that drive room-night demand basically
include three fundamental forms of economic activity:
Population Growth – and related family gatherings, life events, interim housing,
etc.
Business Growth – and related meetings, conferences, regional staffing support,
temporary workers, etc.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-3
Visitor Travel Activity – and related overnight stays and spending activity related
to leisure and business travel, as well as domestic and international travel.
Lodging market supply refers to existing lodging facilities available to accommodate
market demand. How well existing facilities are able to satisfy demand is commonly
evaluated in terms of the following performance factors:
Room Supply – describes the number of rooms (capacity) available to
accommodate overnight stays.
Occupancy – describes the effective utilization of capacity and is based on the
number of rooms sold divided by the available room supply.
Average Daily Rate (ADR) – describes the average charge per room for an
overnight stay and is based on room revenue divided by rooms sold.
Revenue Per Available Room (RevPAR) – is a measure of revenue performance
and is based on room revenue divided by rooms available. RevPAR is a blended
measure of occupancy and ADR.
This market assessment evaluates selected demand and supply factors in terms of
conditions that favor an increase in the local supply of rooms via new development or
substantial renovation of existing facilities.
A lodging facility within the Bakersfield Gateway Center will compete most directly
with other hotel facilities within the Bakersfield Metro Area. The Bakersfield Metro
Area represents an important sub-area of economic activity within the larger Kern
County region.
Kern County-Bakersfield Metro Area Hotel Room Supply
Source: Smith Travel Research; Alfred Gobar Associates
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014p
Nu
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Kern County Region Bakersfield Metro Area
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-4
Presently, the Kern County region includes a lodging base of nearly 10,000 hotel
rooms. Historically, the Bakersfield Metro Area has accounted for 60% to 65% of the
total hotel room supply within the larger Kern County region and currently includes a
lodging base of nearly 6,100 hotel rooms.
Exhibit IV-1 illustrates indexed historical trends for population, payroll employment,
and visitor spending activity throughout the Kern County region (including the
Bakersfield Metro Area) and the corresponding trend describing number of room-
nights sold. This market analysis utilizes historic and projected changes in
population, payroll employment, and visitor spending activity to estimate lodging
potential. Room-night potential is evaluated by aggregating population-employment-
visitor trends into an index (PEV index), which is then compared to the number of
room-nights sold. The precedent relationship between economic activity and room-
night lodging activity is tabulated as a PEV capture index (room-nights sold per
increment of PEV activity) and serves as a market-based indicator of potential growth
in lodging demand. The projected mid-term outlook of overall demand potential
describing the Kern County region and corresponding elements of economic activity
driving demand are shown below.
Projected Room-Night Demand Potential - Kern County Region
Note:PEV Index describes population, employment, and visitor activity in region
PEV Room-Night Capture Index describes incidence of room-nights sold in relation to overall regional
pop, emp, & visitor activity (PEV) in a given year compared to the incident rate for 2001.
Source: Alfred Gobar Associates
0.8
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1.0
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2.40
2.60
2.80
3.00
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Historic Demand Projected Demand PEV Activity PEV Capture Rate
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-5
As shown, the index of economic activity (PEV Activity) associated with lodging
demand has increased at a relatively steady pace while the corresponding number of
room-nights sold and PEV capture index has been more cyclical over the historical
period shown. The fluctuation in room-nights sold and PEV capture is largely due to
broader economic cycles at the State and National level. Over the mid-term, a more
stable period of economic recovery and expansion is expected, while the rate of PEV
capture is expected to increase moderately over the near-term and before stabilizing
over the mid-term. Overall lodging demand is projected to increase from roughly 2.33
million room-nights during 2014 to nearly 2.50 million room-nights by 2016 and 2.67
million room-nights by 2019.
Projected lodging demand for the region as a whole establishes a market limit of
performance for lodging demand growth. This means that market potential
subsequently identified within the Bakersfield Metro Area is subject to market growth
limits that describe the broader Kern County region and portions of the region not
included in the Metro Area itself. In addition, identified lodging demand is for all
hotels, regardless of the market class or price segment that best describe the
competitive focus of each hotel operation. Specific estimates of demand potential for
the Bakersfield Gateway Center must account for the market focus describing a
prospective hotel facility.
Bakersfield Metro Area Lodging Facilities and Trends
This analysis of lodging potential is based on market performance trends describing
62 existing hotels operating within the Bakersfield Metro Area as identified in Exhibit
IV-2. The 62 hotel facilities have been grouped into three price segment
classifications - Upscale, Midscale, and Economy. The price segments identified are
intended to characterize the general market focus of each respective lodging
operation. The grouping was based on initial 7-day advance pricing posted on
internet travel websites or the respective hotel chain website. Grouping the existing
supply of lodging facilities into distinct segments for more detailed analysis is
necessary because not all hotels compete for the same consumer and all consumers
do not demand the same lodging experience. Invariably, any lodging market is made
up of groups of hotels offering a comparable lodging experience to consumers with
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-6
distinct lodging needs and preferences. Historical trends describing the supply of
available rooms is shown below.
Bakersfield Metro Area - Room Supply By Price Segment
Source: Smith Travel Research; Alfred Gobar Associates
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014p
Economy Midscale Upscale
As shown the overall supply of hotel rooms increased from less than 5,000 in 2001 to
nearly 6,100 in 2014. Over the reference period shown, the supply of Economy
hotels has seen very little increase, while the bulk of new rooms have been
constructed in Upscale hotel facilities. Average daily room rate trends describing the
existing supply of hotel rooms are also shown below by price segment.
Bakersfield Metro Area - Average Daily Rate (ADR) Trends
Source: Smith Travel Research; Alfred Gobar Associates
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014p
Upscale Midscale Economy
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-7
The Bakersfield Metro Area can be characterized as a value-driven market. In other
words, the average daily rate describing available lodging facilities within the
Bakersfield Metro Area represents a discount when compared against other
California metro markets. For 2013, the annual ADR for all hotel facilities throughout
California was $130.44 per room-night of occupancy but ranged from $187.79 in the
San Francisco-San Mateo market area to $68.95 in the Bakersfield market area. In
2013, the Bakersfield market area ranked lowest in ADR among the 27 markets areas
tracked by the California Tourism and Trade Commission, and was most comparable
to other inland region markets such as the Stockton-Modesto market ($70.13),
Fairfield-Vallejo market ($71.78), and Redding-Chico market ($79.69).
Within the Bakersfield Metro Area, the current ADR achieved by Economy hotels ($49
per room-night) is less than one-half the level achieved by Upscale hotels ($102 per
room-night) as shown above. The average daily rate describing Economy hotels has
only increased by an average of 1.1% per year since 2001 and is a likely factor
limiting the increase in room supply for this price segment over the past 13 years. By
comparison, the average daily rate describing Upscale hotels increased by an
average of 2.4% per year over the same 13 year period. At $57 per room-night, the
current average daily rate describing Midscale hotels is only modestly higher ($8
more per room-night) than is true for Economy hotels. From 2001 and 2008,
Midscale hotels commanded a notably larger premium over Economy hotels (ranging
from $12 to $22 per room-night) than is true today. Currently, ADR performance
describing Midscale hotels is 44% below the revenue level of Upscale hotels, while
ADR describing Economy hotels is 52% lower than Upscale hotels.
Annual average occupancy trends describing the Bakersfield Metro Area are shown
below and clearly illustrate significant fluctuations in occupancy imposed by the Great
Recession. As shown, Upscale hotels in the area are not immune to economic cycles
but have generally achieved higher overall levels of occupancy than is true of
Midscale and Economy hotels in the area. Overall occupancy achieved by Upscale
hotels in the Bakersfield Metro Area has rarely exceeded 70% but a recent
resurgence in lodging demand is expected to push 2014 occupancy to a record level
of nearly 75%. Overall occupancy describing Midscale and Economy hotels has also
increased with the resurgence in lodging demand but at a more moderate pace than
is true for Upscale hotels.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-8
Bakersfield Metro Area - Average Annual Occupancy Trends
Source: Smith Travel Research; Alfred Gobar Associates
40%
45%
50%
55%
60%
65%
70%
75%
80%
40%
45%
50%
55%
60%
65%
70%
75%
80%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014p
Upscale Midscale Economy
Exhibit IV-3 provides a side-by-side comparison of the average daily revenue and
occupancy trends shown above and offers some insight about the competitive trade-
off between Midscale and Economy hotels as a lodging option for travelers to the
Bakersfield Metro Area. As shown between 2001 and 2006, ADR describing
Midscale hotels held constant in relation to ADR describing Economy hotels
(reflecting a $14 per night average premium over the 5-year period) while annual
occupancy at Midscale hotels consistently lagged annual occupancy at Economy
hotels (roughly 5% to 6% lower over the 5-year period). Beginning in 2006, ADR
describing Midscale hotels began to increase at a pace implying a significant pricing
premium over Economy hotels (equal to a $22 per night premium in 2008). Over this
same period the new home housing market and related construction worker demand
for lodging began to falter and ultimately collapsed by the onset of the Great
Recession. Between 2006 and 2008 as the recession gripped the economy, both
occupancy and ADR at Midscale hotels dropped much more significantly than was
true for either Upscale or Economy hotels. Since the recession, ADR that previously
distinguished the Midscale lodging experience from the Economy lodging experience
has been on the decline (dropping from $12 per night in 2009 to $8 per night in 2014).
Since 2010, annual occupancy at Midscale hotels has also tracked more closely with
occupancy at Economy hotels. The above ADR and occupancy trends strongly
suggest Midscale hotels in the Bakersfield Metro Area function more as a marketable
option for consumer who are seeking an Economy lodging experience.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-9
In comparison to the Midscale and Economy price segments, the Upscale price
segment has been able to distinguish itself as the lodging option of choice for area
travelers. Since 2010, Upscale hotels in in the Bakersfield Metro Market have
increased ADR by 20% overall, compared to 2% for Midscale hotels and 11% for
Economy hotels. Despite the increase in ADR, Upscale hotels in the Bakersfield
Metro Area continue to represent a value-driven experience compared to the ADR
describing comparable lodging in other metro markets of California. Since 2010,
occupancy at Upscale hotels has steadily increased, reaching unprecedented levels
in 2013 and 2014, while occupancy at Midscale and Economy hotels has leveled off
or retreated from 2012 peak levels.
The strong market preference for Upscale lodging is illustrated in Exhibit IV-4 as an
index of 2006 room-night sales performance describing each of the three price
segments within the Bakersfield Metro Area. As shown, the total number of room-
nights sold within Upscale hotels remained relatively constant during the recession
while the corresponding level of room-nights sold in Midscale and Economy hotels
dropped substantially. Since 2010, the index level of room-nights sold within Upscale
hotels has far exceeded the 2006 pre-recession peak year reference period. By
comparison, room-nights sold within Midscale and Economy hotels initially climbed
but subsequently retreated during 2013 and first half of 2014. The precedent market
trends described above have been considered in projecting mid-term lodging
potential for the Bakersfield Metro Area and the Bakersfield Gateway Center.
Bakersfield Metro Area Overall Lodging Potential
Market potential for additional lodging facilities is depends on the projected increase
in room-night demand and expected occupancy performance describing existing
hotels that seek to capture a share of lodging demand. This analysis treats market
potential for additional lodging within the Bakersfield Gateway Center as the residual
product of total room-night potential (demand) less room-night demand captured at
existing hotel facilities (supply). In addition, this analysis uses 2016 as the first full
year of operation for a prospective hotel within the project, while 2013 reflects the
latest full-year reporting period for most of the data used to assess market
performance of existing hotels. Evaluating residual market potential during a future
period requires future growth in lodging demand to be identified and also the future
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-10
increase in supply (as well as occupancy performance) of hotels rooms available to
capture lodging demand.
Lodging Demand Potential
The mid-term outlook of lodging demand for all lodging throughout the Bakersfield
Metro Area is shown below.
Room-Night Demand Potential - Bakersfield Metro Area (All Price Segments)
Note:PEV Room-Night Capture Index describes incidence of room-nights sold per increment of regional
pop, emp, & visitor activity (PEV) in a given year compared to the incident rate for 2001.
Source: Alfred Gobar Associates
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
1.80
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Optomistic Conservative PEV Capture Potential PEV Capture Trend
The same methodology used to estimate lodging demand potential for the larger Kern
County region was applied in estimating demand within the Bakersfield Metro Area.
The projected growth in lodging demand is based on the relationship between room-
night sales and overall levels of PEV activity in the broader region, described as PEV
Capture (an indexed rate of room-night sales per increment of PEV activity). The
general outlook over the mid-term is that area hotels will achieve room-night sales at
a moderately higher capture rate than has typified this area during the previous 13
year period (which included the 911 Crises, Tech Stock Crash of 2002, and Great
Recession). As shown, historical PEV Capture has fluctuated but the mid-term PEV
Capture Trend (conservative outlook) anticipates a more steady increase in
performance before stabilizing at a level that is roughly 5% above the long-term
average. The outlook based on PEV Capture Potential (optimistic outlook)
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-11
anticipates increased capture performance before leveling off at roughly 10% above
the long-term average.
Overall room-night demand for all lodging price segments combined is projected to
increase from about 1.45 million in room-nights sold during 2013 to 1.68 million by
2020 under the conservative outlook and up to 1.76 million under the optimistic
outlook. Roughly 6% to 10% of the projected increase in room-night demand can be
attributed to an increase in the PEV capture rate above the long-term average. The
vast majority of the projected increase in room-night demand (90% to 94%) reflects
growth in baseline economic activity described by population, payroll employment,
and visitor activity (the three PEV components).
Lodging Supply Growth
Capturing a share of lodging demand will be a primary objective of existing and future
hotels competing within the market area. Future hotels likely to be constructed and in
operation prior to on-site lodging development need to be considered in the supply
base of rooms available to serve lodging demand. Since the middle of 2009, a total
of 9 hotels throughout the Kern County region have either been newly constructed or
substantially renovated, adding a total of 716 rooms to the overall supply. The
increased room supply within the Bakersfield Metro Area has accounted for less than
40% of the total increase over the past five years as shown below.
Recent Hotel Completions - Kern County Region
Name of Hotel City or Town Rooms Opening STR Market Class
Bakersfield Metro Area
The Padre Hotel Bakersfield 112 Feb-10 Upper Upscale
Hampton Inn Suites Bakersfield Hwy 58 Bakersfield 94 Dec-09 Upper Midscale
Studio 6 Bakersfield Bakersfield 70 Nov-09 Economy
276
Surrounding Rural County Region
Hampton Inn Suites Ridgecrest Ridgecrest 93 Mar-10 Upper Midscale
Fairfield Inn & Suites Tehachapi Tehachapi 82 Jul-09 Upper Midscale
Holiday Inn Express & Suites Frazier Park Lebec 77 Dec-09 Upper Midscale
Microtel Inn & Suites by Wyndham Wheeler Ridge 69 Mar-12 Economy
Best Western California City Inn & Suites California City 60 Mar-12 Midscale
Best Western Plus Wasco Inn & Suites Wasco 59 Apr-09 Upper Midscale
9 Hotels 440
Total Hotel Rooms Added Since 2009:716
Source: Smith Travel Research - Bakersfield Tract-060901 June, 2014; Alfred Gobar Associates
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-12
The pipeline supply (under construction, planned, or proposed) of hotels within the
Bakersfield Metro Area is currently limited to two projects further summarized below.
Hotel Market Pipeline - Bakersfield Metro Area
Name of Hotel City or Town Rooms Status STR Market Class
TownePlace Suites Bakersfield West Bakersfield 95 U/C Upper Midscale
Holiday Inn Express Bakersfield Airport Oildale 104 Proposed Upper Midscale
Source: Smith Travel Research - Market Pipeline Report June, 2014; Alfred Gobar Associates
TownePlace Suites (an extended-stay brand by Marriott) is currently under
construction at a site on Granite Falls Drive (behind the Northwest Promenade Power
Center) and should be in full operation by the start of 2015. The Holiday Inn Express
is currently proposed for a site along Quinn Road but does not have a designated
development sponsor or architect for the project. The time frame to construction and
start of operations for this hotel program remains uncertain and for purpose of this
analysis is not expected to be open for operation prior to a prospective hotel facility
within the Bakersfield Gateway Center.
Residual Market Potential
Residual market potential that remains for a new or expanded hotel is largely
determined by the share of lodging demand captured at existing hotels. Occupancy
provides the best single indicator of lodging demand capture, although room rate
pricing can significantly influence overall occupancy performance. For purpose of this
analysis, a level of occupancy performance is assigned that reflects the effective
performance of all relevant hotels as a group of competitors. This means, occupancy
performance used to describe existing facilities is not increased or decreased to
simulate pricing strategies that may be used by individual operators to maintain or
bolster hotel occupancy. Instead, the occupancy level assigned is intended to reflect
the aggregate interaction of individual hotels competing for room-night sales on the
basis of pricing, service, amenities, location, and all other factors that comprise the
consumer lodging experience.
The historical and percentile ranking of occupancy performance describing all hotels
within the Bakersfield Metro Area is shown below. As shown, historical performance
has ranged from a low of 53.8% in 2009 to a high of 66.1% in 2006. Over the
historical period identified annual occupancy performance has averaged 61.5%. The
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-13
market outlook is that economic growth and corresponding lodging demand will
continue to advance at an above average pace, at least over the near-term (2016).
Similarly, existing hotel facilities should also be expected to realize an above average
level of occupancy performance. This analysis uses the 80th Percentile rank (65.2%)
to describe overall occupancy performance of all existing hotel facilities.
Occupancy Performance - Bakersfield Metro Area
Year Occupancy Percentile Performance
2001 61.6%Rank Occupancy
2002 61.2%25%60.1%
2003 60.1%33%61.2%
2004 61.4%50%61.6%
2005 64.8%67%63.5%
2006 66.1%75%64.8%
2007 61.9%80%65.2%
2008 57.0%90%65.9%
2009 53.8%95%66.2%
2010 56.4%Average 61.5%
2011 63.5%
2012 66.5%
2013 65.4%
Source: Smith Travel Research; Alfred Gobar Associates
An 80th percentile rank of occupancy performance is used to describe hotels in each
price segment when determining corresponding residual potential. The above
average assignment of occupancy performance used in this analysis reflects a
conservative approach to estimate residual market potential since less unmet room-
night demand remains available for a prospective new hotel facility, including the
Bakersfield Gateway Center.
Projected mid-term growth in residual market potential for all lodging price segments
combined is summarized below. Identified growth in demand reflects a mid-point
projection (average of the conservative and optimistic outlook illustrated above) of
room-night potential. Identified residual room-night demand takes into account the
anticipated increase in room supply and corresponding occupancy performance
(room-night capture) of existing hotels. Enough residual potential is projected to add
another 231 rooms to the supply base in 2014 without reducing indicated occupancy
performance at existing hotel facilities. Over the mid-term period identified, enough
residual potential remains to add nearly 1,160 rooms to the supply base.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-14
Residual Lodging Potential - Bakersfield Metro Area
PEV Rm-Nt Existing Hotels Residual Market Potential
Ref Capture Demand Room Annual Rm-Nts Room Supply Growth
Year Index (Millions)Supply Occupancy (Millions)Yearly Cum
2001 1.00 1.099 4,883 61.6%n.a.n.a.n.a.
2002 0.98 1.094 4,894 61.2%n.a.n.a.n.a.
2003 0.94 1.080 4,926 60.1%n.a.n.a.n.a.
2004 0.96 1.127 5,029 61.4%n.a.n.a.n.a.
2005 1.01 1.233 5,216 64.8%n.a.n.a.n.a.
2006 1.03 1.288 5,342 66.1%n.a.n.a.n.a.
2007 0.98 1.258 5,570 61.9%n.a.n.a.n.a.
2008 0.91 1.188 5,709 57.0%n.a.n.a.n.a.
2009 0.87 1.143 5,823 53.8%n.a.n.a.n.a.
2010 0.94 1.249 6,065 56.4%n.a.n.a.n.a.
2011 1.03 1.407 6,076 63.5%n.a.n.a.n.a.
2012 1.05 1.474 6,077 66.5%n.a.n.a.n.a.
2013 1.02 1.451 6,075 65.4%n.a.n.a.n.a.
2014P 1.04 1.500 6,075 65.2%0.055 231 231
2015P 1.05 1.548 6,170 65.2%0.080 197 428
2016P 1.06 1.589 6,170 65.2%0.121 170 598
2017P 1.06 1.622 6,170 65.2%0.155 141 739
2018P 1.07 1.658 6,170 65.2%0.190 146 885
2019P 1.07 1.691 6,170 65.2%0.224 140 1,025
2020P 1.07 1.723 6,170 65.2%0.255 132 1,157
Source: Smith Travel Research; Alfred Gobar Associates
The above analysis provides a good overview perspective of lodging potential for the
Bakersfield Metro Area as a whole. A prospective hotel facility at the Bakersfield
Gateway Center, however, cannot be expected to simultaneously compete across all
price-segments represented in the market area. Instead, a prospective facility can be
expected to compete more directly with other hotels with a similar competitive focus
(identified as a price segment focus for purpose of this study). A realistic assessment
of lodging potential available to the project site must also consider the market focus of
the prospective hotel facility.
Residual Lodging Potential – Upscale Hotels
The concept plan for Bakersfield Gateway Center identifies two building pads with the
capacity to host up to 240 hotel rooms. A 240-room hotel within the project would
constitute the third largest hotel in the area and a 120-room hotel would rank higher
than nearly 75% of existing hotels, in terms of room count. It is conceivable lodging
development within the project will consist of two hotels versus a single hotel.
The mid-term outlook of room-night demand is illustrated below based on precedent
performance trends and shifting consumer preference for Upscale lodging in the
Bakersfield Metro Area.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-15
Room-Night Demand Potential - Upscale Hotel
Note:PEV Room-Night Capture Index describes incidence of room-nights sold per increment of regional
pop, emp, & visitor activity (PEV) in a given year compared to the incident rate for 2001.
Source: Alfred Gobar Associates
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
1.60
1.70
1.80
0.30
0.35
0.40
0.45
0.50
0.55
0.60
0.65
0.70
0.75
0.80
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Demand Potential Demand Trend PEV Capture Trend PEV Capture Potential
As shown, Upscale hotels have achieved successively higher rates of PEV capture
during the historical period identified. Over the mid-term, the PEV Capture Trend
(conservative outlook) suggests the shift in demand toward a more upscale lodging
experience will hold constant at roughly the levels achieved in 2012 and 2013. By
comparison, PEV Capture Potential (optimistic outlook) anticipates the precedent shift
in demand will continue to drive a modestly higher index rate of PEV capture over the
mid-term. Overall demand for Upscale lodging is projected to increase from 0.63
million room-nights sold in 2013 to 0.73 to 0.77 million room-nights demanded by
2020.
Projected residual potential for the Upscale lodging segment is summarized below.
Shown is a mid-point level of room-night demand growth that reflects an average of
the conservative and optimistic outlook. Projected residual potential also takes into
account expected completion and operation of new Upscale hotel development,
namely the 95-room TownePlace Suites in 2015. Finally, residual potential also
assumes existing hotels achieve an 80th percentile level of occupancy performance
(71.6% annual occupancy) over the mid-term projection period. By 2016, the market
for Upscale lodging is projected to grow enough to support the development and
operation of 306 additional hotel rooms after first deducting room-night demand
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-16
captured within existing hotels. Over the 6-year mid-term period, enough residual
potential is indicated to add about 530 rooms to the supply of Upscale hotels.
Residual Lodging Potential - Upscale Hotel
PEV Rm-Nt Existing Hotels Residual Market Potential
Ref Capture Demand Room Annual Rm-Nts Room Supply Growth
Year Index (Millions)Supply Occupancy (Millions)Yearly Cum
2001 1.00 0.356 1,400 69.6%n.a.n.a.n.a.
2002 0.96 0.349 1,424 67.2%n.a.n.a.n.a.
2003 0.95 0.352 1,457 66.2%n.a.n.a.n.a.
2004 1.03 0.393 1,609 66.9%n.a.n.a.n.a.
2005 1.12 0.440 1,700 71.0%n.a.n.a.n.a.
2006 1.11 0.451 1,715 72.0%n.a.n.a.n.a.
2007 1.12 0.467 1,909 67.0%n.a.n.a.n.a.
2008 1.08 0.458 2,033 61.7%n.a.n.a.n.a.
2009 1.05 0.445 2,131 57.2%n.a.n.a.n.a.
2010 1.18 0.512 2,319 60.5%n.a.n.a.n.a.
2011 1.34 0.592 2,329 69.7%n.a.n.a.n.a.
2012 1.38 0.624 2,327 73.5%n.a.n.a.n.a.
2013 1.36 0.630 2,325 74.2%n.a.n.a.n.a.
2014P 1.38 0.656 2,325 71.6%0.048 181 181
2015P 1.39 0.673 2,420 71.6%0.041 67 248
2016P 1.40 0.689 2,420 71.6%0.056 58 306
2017P 1.40 0.703 2,420 71.6%0.071 55 361
2018P 1.41 0.719 2,420 71.6%0.086 56 417
2019P 1.41 0.734 2,420 71.6%0.101 58 475
2020P 1.42 0.750 2,420 71.6%0.117 59 534
Source: Smith Travel Research; Alfred Gobar Associates
Residual Lodging Potential – Midscale/Economy Hotels
Long-term and recent performance trends provide a strong indication that the
Bakersfield Metro Area is best characterized as a market with a higher-priced tier of
lodging options and a lower-priced tier, rather than three distinct pricing tiers. ADR
performance describing Midscale facilities indicates an inability to command
significant pricing premiums over Economy hotels. Over the past 6 years, ADR
revenue performance at Midscale hotels has steadily declined in relation to ADR
performance at Economy hotels. Overall ADR performance and the implicit pricing
premium initially thought to distinguish Midscale and Economy hotels has been
reduced from an average of $22 per room-night in 2008 to $8 per room-night in 2014.
In addition, annual occupancy performance at Midscale hotels has been tracking
closely with occupancy performance of Economy hotels. Over the mid-term, both
Midscale and Economy hotels in the area are expected to compete more directly with
one another as a lower tier pricing option to area Upscale hotels. As such, this
analysis aggregates all non-upscale hotels into a Midscale-Economy price segment
evaluated in terms of residual market potential.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-17
The mid-term outlook of room-night demand for the Midscale-Economy price segment
is illustrated below based on precedent performance trends.
Room-Night Demand Potential - Midscale-Economy Hotel
Note:PEV Room-Night Capture Index describes incidence of room-nights sold per increment of regional
pop, emp, & visitor activity (PEV) in a given year compared to the incident rate for 2001.
Source: Alfred Gobar Associates
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
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Demand Potential Demand Trend PEV Capture Trend PEV Capture Potential
Over the mid-term, the PEV Capture Trend (conservative outlook) indicates a
moderate but continued decline in the ability to capture room-night demand per
increment of economic growth (PEV activity). By comparison, the PEV Capture
Potential (optimistic outlook) anticipates a modest recovery in PEV capture
performance by Midscale-Economy hotels as whole. Overall demand for Midscale-
Economy lodging is projected to increase from 0.82 million room-nights sold in 2013
to 0.92 to 0.97 million room-nights demanded by 2020.
Projected residual potential for the Midscale-Economy lodging segment is
summarized below. Shown is a mid-point level of room-night demand growth based
on the average of the conservative and optimistic outlook. Projected residual
potential also assumes existing hotels achieve an 80th percentile level of occupancy
performance (61.0% annual occupancy) over the mid-term projection period. By
2016, the market for Midscale-Economy lodging is projected to grow enough to
support the development and operation of 196 additional hotel rooms after first
deducting room-night demand captured within existing hotels. Over the 6-year mid-
term period, enough residual potential is indicated to add about 487 rooms to the
supply of Midscale-Economy hotels.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft IV-18
Residual Lodging Potential - Midscale-Economy Hotel
PEV Rm-Nt Existing Hotels Residual Market Potential
Ref Capture Demand Room Annual Rm-Nts Room Supply Growth
Year Index (Millions)Supply Occupancy (Millions)Yearly Cum
2001 1.00 0.743 3,483 58.4%n.a.n.a.n.a.
2002 0.98 0.745 3,470 58.8%n.a.n.a.n.a.
2003 0.94 0.728 3,469 57.5%n.a.n.a.n.a.
2004 0.92 0.734 3,426 58.7%n.a.n.a.n.a.
2005 0.96 0.793 3,516 61.8%n.a.n.a.n.a.
2006 0.99 0.837 3,627 63.3%n.a.n.a.n.a.
2007 0.91 0.791 3,661 59.2%n.a.n.a.n.a.
2008 0.82 0.730 3,683 54.3%n.a.n.a.n.a.
2009 0.79 0.698 3,692 51.8%n.a.n.a.n.a.
2010 0.82 0.737 3,746 53.9%n.a.n.a.n.a.
2011 0.88 0.815 3,747 59.6%n.a.n.a.n.a.
2012 0.90 0.850 3,757 62.0%n.a.n.a.n.a.
2013 0.85 0.821 3,750 60.0%n.a.n.a.n.a.
2014P 0.85 0.845 3,750 61.0%0.009 41 41
2015P 0.86 0.864 3,750 61.0%0.028 82 123
2016P 0.86 0.880 3,750 61.0%0.045 73 196
2017P 0.86 0.897 3,750 61.0%0.061 73 269
2018P 0.86 0.914 3,750 61.0%0.078 72 341
2019P 0.86 0.930 3,750 61.0%0.095 72 413
2020P 0.86 0.947 3,750 61.0%0.112 74 487
Source: Smith Travel Research; Alfred Gobar Associates
F:\BAKERSFIELD-GATEWAY-URBAN-DECAY_ADMIN-DRAFT\OCTOBER 17, 2014\B
Exhibit IV-1
Index Of Population-Employment-Visitor Spending And Room-Night Demand Trends
Kern County Region
Note:All trends indexed against 12-month average for 2001.
Source: California Travel & Tourism Commission; Dean Runyan Associates; Smith Travel Research; CA-Dept of Finance; CA-Employment Development Dept; Alfred Gobar Associates
0.80
0.90
1.00
1.10
1.20
1.30
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1.50
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1.70
1.80
0.80
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Population Payroll Employment Overnight Visitor Spending Room-Nights Sold
Bakersfield_Lodging-Analysis1/Exhibits
Exhibit IV-2
Bakersfield Metro Area Hotels By Price Segment
Price Segment Focus &Number Hotel Meeting Area Age of Chain Brand STR
Name of Lodging Facility Street Address of Rooms Total Largest Facility Affiliation Market Class
Upscale Price Segment
Marriott - Bakersfield Conv Center 801 Truxtun Ave 259 9,692 7,344 19 Marriott Upper Upscale
The Padre Hotel 1702 18th St 112 5,500 1,850 4 Independent Upper Upscale
Courtyard Bakersfield 3601 Marriott Dr 146 1,274 637 26 Courtyard Upscale
Doubletree Bakersfield 3100 Camino Del Rio Ct 262 19,205 7,560 32 DoubleTree Upscale
Four Points Bakersfield 5101 California Ave 197 6,132 1,800 31 Four Points Upscale
Hilton Garden Inn Bakersfield 3625 Marriott Dr 120 2,500 1,925 10 Hilton Garden Inn Upscale
Homewood Suites Bakersfield 1505 Mill Rock Way 123 1,080 1,080 10 Homewood Suites Upscale
Residence Inn Bakersfield 4241 Chester Ln 114 550 550 24 Residence Inn Upscale
Springhill Suites Bakersfield 3801 Marriott Dr 119 120 120 7 Springhill Suites Upscale
Best Western Plus - Hill House 700 Truxtun Ave 95 2,200 1,200 54 Best Western Plus Upper Midscale
Clarion Hotel Bakersfield 3540 Rosedale Hwy 122 1,100 1,100 26 Clarion Upper Midscale
Comfort Suites Bakersfield 3115 Camino Del Rio Ct 55 200 200 12 Comfort Suites Upper Midscale
Hampton Inn Bakersfield Central 1017 Oak St 93 130 130 16 Hampton Inn Upper Midscale
Hampton Inn Suites Bakersfield Hwy 58 7941 E. Brundage Ln 94 675 675 5 Hampton Inn & Suites Upper Midscale
Hampton Inn Suites Bakersfield North Airport 8818 Spectrum Park Way 94 783 783 6 Hampton Inn & Suites Upper Midscale
Holiday Inn & Suites Bakersfield North 3927 Marriott Dr 120 1,000 1,000 6 Holiday Inn Upper Midscale
Holiday Inn Express & Suites Bakersfield 3001 Buck Owens Blvd 90 600 600 8 Holiday Inn Express Upper Midscale
Holiday Inn Express Bakersfield 4400 Hughes Ln 108 312 312 20 Holiday Inn Express Upper Midscale
Upscale Totals and Averages:2,323 53,053 7,560 18 18 - Hotels
Midscale Price Segment
Best Western Crystal Palace Inn & Suites 2620 Buck Owens Blvd 199 3,690 2,600 56 Best Western Midscale
Best Western Heritage Inn 253 Trask St 47 - - 18 Best Western Midscale
Downtowner Inn 1301 Chester Ave 56 200 200 50 GuestHouse Inns Midscale
Garden Suites Inn 2310 Wible Rd 64 400 200 25 GuestHouse Inns Midscale
La Quinta Inns & Suites Bakersfield North 8858 Spectrum Pkwy 65 300 300 8 La Quinta Inns & Suites Midscale
La Quinta Inns & Suites Bakersfield South 3232 Riverside Dr 128 - - 28 La Quinta Inns & Suites Midscale
Quality Inn & Suites Bakersfield 4500 Buck Owens Blvd 207 400 400 30 Quality Inn Midscale
Ramada Limited Bakersfield Central 830 Wible Rd 53 - - 29 Ramada Midscale
Ramada Limited Bakersfield North 828 Real Rd 80 435 435 21 Ramada Midscale
Sleep Inn & Suites Bakersfield 6257 Knudsen Dr 46 200 200 8 Sleep Inn Midscale
Vagabond Inn Bakersfield 6501 Colony St 133 - - 30 Vagabond Inn Midscale
Vagabond Inn Bakersfield I 5 200 Trask St 53 - - 25 Vagabond Inn Midscale
Vagabond Inn Bakersfield II North 6100 Knudsen Dr 153 - - 30 Vagabond Inn Midscale
Midscale Totals and Averages:1,284 5,625 2,600 28 13 - Hotels
B-field-Gateway_Hotel-Audit-Guide_May-14/Metro Hotels
Exhibit IV-2 Cont'd
Bakersfield Metro Area Hotels By Price Segment
Price Segment Focus &Number Hotel Meeting Area Age of Chain Brand STR
Name of Lodging Facility Street Address of Rooms Total Largest Facility Affiliation Market Class
Economy Price Segment
Americas Best Value Inn Bakersfield 8230 E Brundage Ln 39 - - 26 Americas Best Value Inn Economy
Americas Best Value Inn Oak Street Bakersfield 889 Oak St 42 - - 50 Americas Best Value Inn Economy
Bakersfield Inn & Suites 2514 White Ln 66 150 150 29 Independent Economy
Bakersfield Lodge 1219 S Union Ave 50 - - 36 Independent Economy
Best Economy Inn & Suites 5200 Olive Tree Ct 101 - - 33 Econo Lodge Economy
Budget Inn Motel 6850 S Union Ave 52 - - 18 Independent Economy
California Best Inn 1030 Wible Rd 61 - - 28 Independent Economy
Colonial Motor Hotel 605 Union Ave 22 - - 36 Independent Economy
Days Inn Bakersfield 818 Real Rd 186 7,079 2,835 43 Days Inn Economy
Econo Lodge Bakersfield Central 350 Oak St 70 - - 44 Econo Lodge Economy
El Morocco Motel 315 Golden State Ave 24 - - 58 Independent Economy
Executive Inn 10614 Rosedale Hwy 18 - - 41 Independent Economy
Extended Stay America Bakersfield California Avenue3318 California Ave 120 - - 18 Extended Stay America Economy
Extended Stay America Bakersfield Chester Lane 3600 Chester Ln 80 - - 9 Extended Stay America Economy
E-Z 8 Bakersfield 2604 Buck Owens Blvd 100 - - 30 E-Z 8 Economy
Hotel Rosedale 2400 Camino Del Rio Ct 168 6,000 2,850 42 Independent Economy
Howard Johnson Express Bakersfield 2700 White Ln 149 - - 49 Howard Johnson ExpressEconomy
Knights Inn Bakersfield 812 Wible Rd 20 - - 6 Knights Inn Economy
La Mirage Motel 525 Union Ave 56 - - 36 Independent Economy
Motel 6 Bakersfield Airport 5241 Olive Tree Ct 108 - - 31 Motel 6 Economy
Motel 6 Bakersfield Convention Center 1350 Easton Dr 106 - - 28 Motel 6 Economy
Motel 6 Bakersfield East 8223 E Brundage Ln 109 - - 33 Motel 6 Economy
Motel 6 Bakersfield South 2727 White Ln 102 - - 38 Motel 6 Economy
Roadrunner Inn & Suites 2619 Buck Owens Blvd 45 - - 30 Independent Economy
Rodeway Inn & Suites Bakersfield 3400 Chester Ln 74 - - 28 Rodeway Inn Economy
Studio 6 Bakersfield 6141 Knudsen Dr 70 - - 5 Studio 6 Economy
Super 8 Bakersfield Central 901 Real Rd 86 - - 32 Super 8 Economy
Super 8 Bakersfield South California 3620 Wible Rd 60 - - 27 Super 8 Economy
Tower Motel 3215 Chester Ave 94 - - 58 Independent Economy
Travelodge Bakersfield Oak Street 1011 Oak St 88 - - 42 Travelodge Economy
Tropicana Motor Inn 1622 Union Ave 100 - - 22 Independent Economy
Economy Totals and Averages:2,466 13,229 2,850 32 31 - Hotels
Bakersfield Metro Area Totals and Averages:6,073 71,907 7,560 27 62 - Hotels
Note:
Market Class is an industry grouping scheme used by Smith Travel Research to categorize chain-affiliated and independent hotels. Chain-brand hotels are categorized
on the basis the average room rates describing the chain. Independent hotels are assigned to a class on the basis of their ADR in relation to chain-affiliates in local area.
Price segment classification of hotels is based on 7-day advance notice pricing posted on travel browsers (e.g. Expedia, Orbitz, etc.) or hotel sites. Price segments are used
as an initial classification for more detailed analysis of occupancy, average daily room revenue, room-night supply, room-night sales, and other market performance measures.
Source: Smith Travel Research - Bakersfield Tract-060901 June, 2014; Alfred Gobar Associates
B-field-Gateway_Hotel-Audit-Guide_May-14/Metro Hotels
Exhibit IV-3
Annual Occupancy And Average Daily Rate Trends
Bakersfield Metro Area By Price Segment
Average Annual Occupancy
Average Daily Rate (ADR)
Source: Smith Travel Research; Alfred Gobar Associates
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014p
Upscale Hotels Midscale Hotels Economy Hotels
40%
45%
50%
55%
60%
65%
70%
75%
80%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014p
Bakersfield_Lodging-Analysis2/Exhibits
Exhibit IV-4
Total Room-Nights Sold As Index Of 2006 Average Performance
Bakersfield Metro Area By Market Price Segment
Note:Trends reflect 12-month moving average indexed against 2006 average monthly level of performance.
Source: Smith Travel Research; Alfred Gobar Associates
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
Ja
n
-
0
7
Ju
l
-
0
7
Ja
n
-
0
8
Ju
l
-
0
8
Ja
n
-
0
9
Ju
l
-
0
9
Ja
n
-
1
0
Ju
l
-
1
0
Ja
n
-
1
1
Ju
l
-
1
1
Ja
n
-
1
2
Ju
l
-
1
2
Ja
n
-
1
3
Ju
l
-
1
3
Ja
n
-
1
4
Upscale Hotels Midscale Hotels Economy Hotels All Hotels
Bakersfield_Lodging-Analysis2/Exhibits
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-1
Chapter V
Project Economic Impact and
Urban Decay
Whether or not the Bakersfield Gateway Center will cause significant physical impacts
that result in urban decay of existing retail or lodging facilities depends on the chain of
economic and physical events that can be realistically expected when the first phase
of development begins operations in 2016 and when the entire project is completed
and operating in 2019. As determined in Bakersfield Citizens for Local Control v. City
of Bakersfield [(2004) 124 Cal.App. 4th 1184], urban decay reflects the end product of
a chain reaction of store closures and long-term vacancies that lead to the physical
decay of existing retail space. This analysis evaluates the probable chain of events
that can be realistically anticipated following the development and operation of the
Bakersfield Gateway Center and whether such project-associated events can be
expected to result in significant environmental impacts in the form of urban decay.
This analysis addresses the following chain of events related to retail: the sales
impact the proposed project is expected to have on existing retailers; the risk that
identified sales impact will bring about widespread business failure and vacancy of
existing retail facilities; the likelihood resulting vacancies will be long-term in the
absence of market opportunity to re-fill vacated space with replacement or alternate
retail uses; and the risk the probable tenure of vacancy will bring about significant
urban decay of existing retail facilities. This analysis also considers the direct and
indirect environmental impact that can be attributed to the proposed project in light of
cumulative retail development that might occur in the trade area. This analysis finally
determines whether or not the Bakersfield Gateway Center will impact the
environment in a manner that brings about significant urban decay of retail facilities.
The same underlying approach is used to evaluate the potential impact on lodging
facilities but the focus is on occupancy performance of existing hotels and
corresponding risk of business failure and protracted vacancy leading to urban decay.
This analysis addresses the above chain of events leading to urban decay in
sequence, while also providing a separate discussion of relevant factors
distinguishing the project effect on retail and lodging facilities.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-2
Project Impact on Existing Businesses
Sale activity reflects a basic economic component of business performance and
important aspect of operating success likely to be affected by competitive impacts.
The competitive impact of the Bakersfield Gateway Center on existing retailers can be
measured in terms of reduced sales. For entertainment-leisure businesses (cinemas
and health clubs), the competitive impact can be measured in terms of reduced
movie-goers and reduced club memberships. Finally for lodging facilities, the
competitive impact can be measured in terms of reduced room-nights sold.
Impact on Retail Businesses
Any competitive impact of the project is likely to result in a shift in sales support that
previously flowed to existing retailers, but is subsequently diverted to project retailers.
Sales shift invariably occurs whenever there in an increase in the supply of retail and
whenever new businesses alter consumer behavior in a way that diverts a portion of
spending away from existing retailers. Periodic shifting of sales among competitors is
to be expected in healthy retail markets. To the extent the target level of sales
performance of a new retail business is dependent on a shift in sales from existing
retailers, some level of sales impact is likely to occur. By comparison, to the extent
target sales performance of new retail can be achieved by capturing spending
potential existing retailers fail to attract, the likelihood of a significant sales impact is
reduced.
Impact of Project Regional-Oriented Retail
Exhibit V-1 identifies the projected shift in sales from existing retailers that is
associated with the baseline retail merchandising focus of the Bakersfield Gateway
Center (retail store-group activities with a strong regional orientation). Shown is the
projected 2016 shift in sales attributed to retail activities of Phase 1, 2019 shift in
sales attributed to Phase 2, and total shift in sales in 2019 attributed to the combined
retail activities of Phase 1 and Phase 2 (Completed Project). Also shown for each
incremental phase and the completed project is: the total amount of retail floor space
built and occupied; target sales performance describing each major store-group
activity; amount of residual trade area potential available to the project; share of
residual potential needed to meet the target level of project sales; the absolute
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-3
amount of sales shift associated with a shortfall of residual potential; and projected
sales shift described as a share of the target level of project sales.
As shown in Exhibit V-1, Phase 1 of the Bakersfield Gateway Center is projected to
include 462,000 square feet of retail space with a mix of store-group activities that is
distinctly different from the Phase 2 development scope, which adds another 338,000
square feet of retail space to the project. As shown, very little competitive sales shift
is associated with the hypothetical mix of retail anchor activities used to describe
Phase 1. During the 2016 operating period of Phase 1, enough available residual
potential is indicated to achieve a target level of sales for all project store-group
activities except a tires-batteries-accessory (TBA) operation. The total amount of
sales describing a TBA operation ($2.54 Million/year) is expected to represent a shift
in sales from other similar businesses in the surrounding Bakersfield Metro Area.
Also shown in Exhibit V-1 is the incremental impact of 338,000 square feet of
additional retail development describing Phase 2. Enough residual potential is
indicated for Phase 2 (as a standalone project) to achieve a target level of sales for
all store-groups, with the exception of the general merchandising activities. During
2019 about 29% of target sales describing the 120,000 square foot increase in
general merchandising activity for Phase 2 ($7.55 Million of $25.92 Million) must be
achieved by shifting sales support away from other similar retail businesses.
A more accurate assessment of the project sales impact is also shown in Exhibit V-1
for all retail activities of Phase 1 & 2 combined and is further summarized below. The
overall competitive impact of the completed Bakersfield Gateway Center (in terms of
sales shift) is greater than the sum of incremental sales shift describing each
individual phase of development. A greater overall impact results because the
amount of retail floor area in each individual phase must be aggregated to represent
the completed project. In other words, the project impact is not limited to 462,000
square feet of retail in 2016 and only 338,000 additional square feet in 2019 but all
800,000 square feet competing against existing retailers in 2019. As shown below,
enough residual potential is projected in 2019 to support the indicated level of target
sales for all store-group activities describing the project, with the exception of general
merchandising and TBA retail activities.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-4
Bakersfield Gateway Center - 2019 Projected Sales Shift
Project Available Target Sales Projected Sales Shift
Target Residual As Share of Req'd From As Share of
Retail Store-Group Category Sales Potential Residual Area Stores Target Sales
($000's)($000's)($000's)
GAFO Retail Activity $153,496 $609,464 60%($14,035)43%
General Merchadising 32,400 18,365 >100%(14,035)43%
Apparel & Accessories 30,544 121,635 25%0 neg'l
Furniture & Hshld Appl/Elect.19,320 154,184 13%0 neg'l
Other Specialty-Misc Retail 71,232 315,280 23%0 neg'l
Building Materials 36,960 43,402 85%0 neg'l
Drug & Sundries 0 0 n.a.p.n.a.p.n.a.p.
Food & Beverage 0 0 n.a.p.n.a.p.n.a.p.
Eating & Drinking 18,270 240,912 8%0 neg'l
Auto TBA-Maint 2,580 0 >100%(2,580)100%
Retail & Dining Sub-Total $211,306 $893,778 24%($16,615)8%
Consumer-Ent Services 6,740 n.a.n.a.n.a.n.a.
All Retail-Dining-Ent Activity $218,046 $893,778 24%($16,615)8%
Source: Alfred Gobar Associates
As shown above, total sales describing a 10,000 square foot TBA operation ($2.58
Million in 2019) is projected to require a shift in sales from other similar businesses.
Upon completion, roughly 150,000 square feet of general merchandising retail activity
(primarily Discount Department Stores and Variety Stores) is expected to characterize
the completed project. The target level of on-site sales for general merchandising
activity is projected at nearly $26.0 Million in 2019. Of the nearly $26.0 Million in
target sales, about $14.0 Million or 43% is expected to require a shift in sales from
other similar businesses. Overall, the target level of retail sales describing the
completed Bakersfield Gateway Center in 2019 ($218 Million) is projected to require
about 8% or $16.6 Million of total sales to be shifted from other existing retail
businesses in the surrounding region.
Impact of Project Neighborhood-Oriented Retail
For purpose of this urban decay analysis, a modified retail merchandising focus used
to describe the Bakersfield Gateway Center has been evaluated in terms of residual
support potential for a drug store anchor and grocery store anchor in 2019. Result of
the market analysis and extent of sales shift required to achieve a target level of sales
performance is summarized below. As shown, enough residual potential is indicated
in 2019 to support a target level of sales without having to shift sales away from other
similar businesses.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-5
2019 Projected Sales Shift For Drug & Grocery
Drug Store Grocery Store
Retail Market Criteria Anchor Anchor
Size of Project Anchor (Sq Ft)15,000 45,000
Target Sales of Project Anchor $6,180,000 $19,170,000
3-Mile Trade Area Residual $6,767,000 $21,881,000__________________
Residual Excess/(Shortage)$587,000 $2,711,000
As Share of Total Residual 9%12%
Projected Sales Shift Neg'l Neg'l
Source: Alfred Gobar Associates
Magnitude and Duration of Retail Sales Shift
The absolute shift in sales discussed above only describes one aspect of a
competitive impact that could induce a chain of events leading to urban decay. The
size of the sales impact relative to existing store sales (magnitude of impact) and the
time period that will lapse before a drop in sales is recovered (duration of impact) also
influence the ultimate impact of the project. The larger the sales impact as a share of
annual sales per establishment, the longer the time period required to recover lost
sales and the higher the corresponding risk of business failure.
The magnitude and duration of the project’s competitive impact on all existing
retailers throughout the metro trade area is detailed in Exhibit V-2, which identifies the
project impact in terms of the overall impact on all retailers combined, the impact on
anchor-scale retailers in particular; and finally the impact on non-anchor retailers.
With respect to the Bakersfield Gateway Center, Exhibit V-2 shows the target level of
sales describing the project and the portion of project sales that requires a shift in
sales from existing retailers. With respect to existing retailers, Exhibit V-2 shows total
level of 2019 sales support captured by existing retailers; projected number of
existing retailers in 2019; and average sales achieved per establishment (absent the
project impact). With respect to the project impact, Exhibit V-2 shows the sales
impact described in terms of the average drop in annual sales per existing
establishment; sales impact described as a share of average annual sales of a typical
retailer; and sales impact described in terms of the expected time period that will
lapse before the indicated drop in sales is recovered.
A review of the project’s overall impact detailed in Exhibit V-2 and summarized below,
shows that no drop in sales or corresponding recovery period in indicated for most
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-6
store-group activities. For most store-group activities, no sales impact or necessary
recovery period is anticipated because sufficient residual market potential is projected
as previously discussed (refer to Exhibit V-1). The exceptions include the general
merchandising store-group and tires-batteries-accessory store-group. For these
store-group activities the overall project impact is limited, in terms of the magnitude of
impact and duration of impact.
Bakersfield Gateway Center - Sales Shift & Competitive Impact
Project Existing Retailers Impact Of 2019 Sales Shift
Related 2019 Sales Avg Sales Avg Shift % of Existing Period to
Retail Store-Group Category Sales Shift Capture Per Estab Per Store Store Sales Recovery
($000's)($000's)($000's)($000's)(Months)
GAFO Retail Activity (14,035)2,543,216 877 ($5)-0.6%2
General Merchadising (14,035)1,365,783 5,335 (55)-1.0%3
Apparel & Accessories 0 389,467 776 -- n.a. n.a.
Furniture & Hshld Appl/Elect.0 260,907 878 -- n.a. n.a.
Other Specialty-Misc Retail 0 527,059 286 -- n.a. n.a.
Building Materials 0 437,506 3,392 -- n.a. n.a.
Drug & Sundries n.a.p.355,876 3,235 -- n.a. n.a.
Food & Beverage n.a.p.1,072,395 3,154 -- n.a. n.a.
Eating & Drinking 0 869,102 753 -- n.a. n.a.
Auto TBA-Maint (2,580)140,799 468 (9)-1.8%7
Retail & Dining Sub-Total (16,615)5,418,894 (0)(3)neg'l n.a.
Consumer-Ent Services n.a.n.a.n.a.-- n.a. n.a.
All Retail-Dining-Ent Activity (16,615)5,418,894 (0)(3)neg'l n.a.
Source: Alfred Gobar Associates
With respect to existing general merchandising retailers as a whole, the 2019
reduction in sales amounts to $55,000 per existing store on average. The sales
reduction is equal to a 1.0% reduction in average annual sales. As a matter of
perspective, an 8.0% reduction is similar to losing one-month worth of annual sales
activity. The magnitude of the project impact is roughly the same as losing one-half a
week of annual sales activity. The duration of the project impact is projected to
require a recovery period of approximately 3 months. This means that the equivalent
1.0% drop in sales imposed by project will require 3-month worth of average annual
sales growth to once again achieve a level of sales that would have occurred if not for
the competitive impact of the project.
The Bakersfield Gateway Center will constitute the third largest retail center in the
Bakersfield Metro Area and have a strong regional-orientation dominated by anchor-
scale retail operations. A strong regional orientation suggests the project’s
competitive influence and related sales impact is likely to be felt by all retailers
throughout the Bakersfield Metro Area. The dominant representation of anchor-scale
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-7
retailers within the project further suggests the Bakersfield Gateway Center will have
a greater relative impact on major anchor-scale retail competitors in the metro area
than on smaller more local-serving retailers.
Anchor-scale retailers (stores generally exceeding 10,000 square feet) can be
distinguished in terms of their geographic and merchandising focus. Anchors most
often describe retail operations that generate repeat shopper traffic to a commercial
center, which in turn provides adjacent non-anchor stores with greater exposure and
opportunity to achieve higher sales performance. Anchors generally occupy a large
retail space so that consumers can satisfy a variety of purchase needs in a single
location – vis-à-vis large inventories of product, broad selection of merchandise, and
volume- or discount-pricing. Anchor-scale merchandising requires a larger absolute
volume of sales activity, which prompts retailers to target shoppers within a larger
geographic area. By comparison, smaller-scale non-anchor stores may share a
merchandising focus that compares to their anchor-scale counterparts, but most often
distinguish themselves by offering a unique selection of hard-to-find products;
combining a higher level of service as a component part of the sale; or merely
providing a convenient store option that enables consumers to satisfy their purchase
demands quickly. The competitive focus of the Bakersfield Gateway Center is closely
aligned with anchor-scale merchandisers and any corresponding sales impact can be
expected to have a disproportionately greater effect on anchor-scale competitors in
the surrounding metro trade area.
As previously discussed, Exhibit V-2 also details the project’s competitive impact on
anchor-scale retailers as a distinct group and non-anchor retailers as a distinct group.
The differential nature of the project’s competitive impact on anchor and non-anchor
retailers is shown below with respect to general merchandising store-group retailers.
General Merchandising: Sales Shift & Competitive Impact
Project Existing Retailers Impact Of 2019 Sales Shift
Exisiting Store-Group Activity Related 2019 Sales Avg Sales Avg Shift % of Existing Period to
& Competing Store Group Sales Shift Capture Per Estab Per Store Store Sales Recovery
($000's)($000's)($000's)($000's)(Months)
General Merchandising (14,035)1,365,783 5,335 ($55)-1.0%3
Anchor Stores (11,930)1,039,134 17,035 (196)-1.1%4
Non-Anchor Stores (2,105)326,649 1,675 (11)-0.6%2
Source: Alfred Gobar Associates
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-8
General merchandising retail activity within the project is expected to compete most
directly with other similar anchor-scale retailers (Costco, Wal-Mart, Target, JC Penny,
Big Lots, Family Dollar, etc.). The sales impact on anchor-scale retailers is estimated
at about $11.9 million in 2019, or roughly 85% of the total sales shift impacting all
general merchandising retailers (anchor and non-anchor combined). The magnitude
of the 2019 sales shift amounts to an annual loss of $196,000 on average per anchor-
scale retailer, or a 1.1% reduction in average annual sales. The duration of the
impact equates to approximately 4 months of average annual sales growth before the
reduction in sales is recovered. The corresponding sales impact on non-anchor
general merchandisers is projected to total $2.1 million in 2019, or about $11,000 per
retailer on average. The time required to recover the reduction in sales performance
is approximately 2 months.
The projected impact of the project on tire-battery-accessory operations throughout
the metro trade area is summarized below.
Tire-Battery-Accessories: Sales Shift & Competitive Impact
Project Existing Retailers Impact Of 2019 Sales Shift
Exisiting Store-Group Activity Related 2019 Sales Avg Sales Avg Shift % of Existing Period to
& Competing Store Group Sales Shift Capture Per Estab Per Store Store Sales Recovery
($000's)($000's)($000's)($000's)(Months)
Tire-Battery-Accessories (2,580)140,799 468 ($9)-1.8%7
Anchor Stores 0 0 -- -- n.a. n.a.
Non-Anchor Stores (2,580)140,799 468 (9)-1.8%7
Source: Alfred Gobar Associates
Auto parts, tire, battery, and accessory shops (American Tire, Big-O Tire, Pep Boys,
etc.) are not considered anchor-scale retailers primarily because of the infrequent
single-purpose nature of shopper trips to such establishments. In addition, these type
of business rarely share storefront space with most other types of retail, dining and
leisure operations due to the unique nature of repair-maintenance operations
involved. As shown above, the project impact on TBA operations is wholly defined by
the required sales shift from existing non-anchor retailers. On average, the 2019
sales impact amounts to $9,000 per establishment or an equivalent 1.8% reduction in
annual sales performance. The corresponding recovery period is 7 months before
sales once again achieve a level of performance anticipated without the impact of the
project.
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-9
Impact on Entertainment-Leisure Businesses
A multi-screen cinema and health club/fitness center are the principal entertainment-
leisure activities anticipated within the Bakersfield Gateway Center. The probable
impact of project development on existing entertainment-leisure businesses is largely
dependent on the extent of residual market support available to the project to host
such business activity. For purpose of this study, residual potential for these principal
entertainment-leisure activities was evaluated as part of a broader market study (refer
to Chapter III). Results of the market study are summarized below, as well as the
expected impact (reduced business performance) associated with the Phase 1
entertainment-leisure activities during 2016.
2016 Project Impact on Cinemas & Health Clubs
Market Multi-Screen Large-Format
Criteria Cinemas Health Clubs
Bakersfield Metro Area Pop 575,640 575,640
Market Potential (Cinema Visitors)(Club Members )
Projected Market Demand
Annual Demand 2,469,600 55,600
Per Capita Rate 4.290 0.097
Projected Market Capture
Annual Demand 1,649,200 48,600
Per Capita Rate 2.865 0.084
Residual Market Potential
Annual Demand 820,400 7,000
Site Development Potential (Cinema Screens)(Club Facilities)
Incidence of Demand/Unit 32,900 2,780
Residual Units Demanded 24.9 2.5
On-Site Units Planned 16.0 1.0
Residual Excess/(Shortage)8.9 1.5
Projected Impact on Existing neg'l neg'l
Source: Alfred Gobar Associates
As shown, enough residual potential is indicated in 2016 to support the full scope of
entertainment-leisure activities contemplated within the Phase 1 development of the
Bakersfield Gateway Center without having to shift sales away from other similar
businesses.
Impact on Lodging Businesses
The Bakersfield Gateway Center is envisioned to include up to 240 rooms of on-site
lodging. For purpose of this study, a lodging market analysis for the Bakersfield
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-10
Metro Area was conducted to determine the extent of residual market support and
likely operating focus (price segment orientation) that should be realistically expected
to characterize hotel development within the project (refer to Chapter IV). Based on
the market analysis, on-site lodging is likely to be characterized by two separate but
similar sized hotel operations of about 120 rooms each (a single hotel with 120 guest
rooms would be larger than nearly 75% of all existing hotels in the surrounding metro
area). The market analysis also indicates, on-site lodging is likely to be characterized
by separate hotel operations competing for support from travelers seeking an upscale
lodging experience and travelers seeking midscale-economy lodging experience. For
purpose of assessing the impact of project development, 2016 is used as the first
year of operation for either or both separate hotel operations.
Results from the market analysis of residual lodging potential and the projected sales
impact (room-nights sold) of a 120-room upscale priced hotel operation within the
Bakersfield Gateway Center is summarized below.
Projected Impact of Upscale Lodging Activity
Rm-Nt Existing Hotels Residual Potential Impact of Project Lodging
Ref Demand Room Annual Rm-Nts Equiv Room Total Hotel Rm-Nts Req'd
Year (Mill)Supply Occupancy (Mill)Demand Rooms Sold (Mill)Sales Shift
2016 0.689 2,420 71.6%0.056 306 120 0.031 neg'l
2017 0.703 2,420 71.6%0.071 361 120 0.031 neg'l
2018 0.719 2,420 71.6%0.086 417 120 0.031 neg'l
2019 0.734 2,420 71.6%0.101 475 120 0.031 neg'l
2020 0.750 2,420 71.6%0.117 534 120 0.031 neg'l
Source: Smith Travel Research; Alfred Gobar Associates
Results from the market analysis of residual lodging potential and the projected sales
impact (room-nights sold) of a 120-room midscale-economy priced hotel operation
within the Bakersfield Gateway Center is summarized below.
Projected Impact of Midscale-Economy Lodging Activity
Rm-Nt Existing Hotels Residual Potential Impact of Project Lodging
Ref Demand Room Annual Rm-Nts Equiv Room Total Hotel Rm-Nts Req'd
Year (Mill)Supply Occupancy (Mill)Demand Rooms Sold (Mill)Sales Shift
2016 0.880 3,750 61.0%0.045 196 120 0.027 neg'l
2017 0.897 3,750 61.0%0.061 269 120 0.027 neg'l
2018 0.914 3,750 61.0%0.078 341 120 0.027 neg'l
2019 0.930 3,750 61.0%0.095 413 120 0.027 neg'l
2020 0.947 3,750 61.0%0.112 487 120 0.027 neg'l
Source: Smith Travel Research; Alfred Gobar Associates
As shown, enough residual potential is indicated in 2016 to support 120-room upscale
hotel operation and 120-room midscale-economy hotel operation within the
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-11
Bakersfield Gateway Center without having to shift sales (room-nights sold) away
from other similar businesses.
Urban Decay Risk of Sales Impact
The potential impact of project development on the operating performance of existing
businesses is greatly influenced by the level of residual market potential available for
project activities to achieve a target level of sales performance. To the extent there is
a shortage of residual potential, the likelihood that a portion of sales previously
captured by existing businesses will instead be redirected toward similar activities
within the project also increases (this shift is the sales impact of the project). The
corresponding risk that a sales impact triggers and fuels a chain of events leading to
urban decay is significantly influenced by the magnitude and duration of the initial
sales impact. To the extent enough residual potential exists to support envisioned
sales performance within the project, the likelihood a significant sales impact will
result is greatly reduced and the risk the project may fuel a chain of events leading to
urban decay becomes negligible.
The sales impact of the Bakersfield Gateway Center has been evaluated in terms of
the expected reduction in the operating performance at existing businesses (retail
sales, movie-goers, room-nights sold, etc.) likely to be imposed by retail,
entertainment-leisure, and lodging activities of the project. Results of the sales
impact analysis and corresponding risk such impact may contribute to urban decay
are summarized as follows.
Sufficient residual potential is indicated to fully support the target level of sales
performance and corresponding building area envisioned for the following retail
store-group activities: apparel & accessory; furniture & household appliance; other
specialty-miscellaneous products; building materials; drug & sundry products;
food & grocery products; and eating & drinking services (refer to Exhibit V-1).
There is minimal risk project development will require a shift in sales from other
similar businesses and the corresponding risk that a sales impact will result that
contributes to urban decay is negligible.
There is a shortfall of residual potential needed to fully support the target level of
sales performance and corresponding building area envisioned for the following
retail store-group activities: general merchandising and auto parts-tires-batteries-
accessory products (refer to Exhibit V-1). The indicated shortfall is expected to
require a shift in sales and corresponding reduction in sales performance ranging
from 1.0% to 1.8% of average annual sales that will require between 2 and 7
months of sales growth to recapture lost revenue. The risk that the sales impact
will or will not contribute to urban decay cannot be reasonably determined without
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-12
first evaluating the resiliency of affected retailers and precedent ability to
overcome similar reductions in sales performance.
Sufficient residual potential is indicated to fully support the target level of
operating performance and corresponding building area envisioned for the
following entertainment-leisure activities: multi-screen cinema of roughly 60,000
square feet, large-format health club of roughly 35,000 square feet. There is
minimal risk project development will require a shift in sales from other similar
businesses and the corresponding risk that a sales impact will result that
contributes to urban decay is negligible.
Sufficient residual potential is indicated to fully support the target level of
operating performance and corresponding room capacity envisioned for the
following lodging activities: a 120-room upscale hotel; and a 120-room midscale-
economy hotel. There is minimal risk project development will require a shift in
room-night sales from other similar businesses and the corresponding risk that a
sales impact will result that contributes to urban decay is negligible.
Operating Resiliency and Risk of Business Failure
Identifying the sales impact of the Bakersfield Gateway Center constitutes a first step
in assessing a chain of events that could bring about urban decay within physical
facilities that host affected businesses. Once the magnitude and duration of the sales
impact has been determined it is necessary to evaluate the operating resiliency of
affected businesses groups. Evaluating operating resiliency provides insight about
the inherent capacity of an affected business group to overcome periodic and
protracted reductions in sales performance. A sales impact that significantly
challenges the operating resiliency of affected businesses increases the risk of
widespread business failure and related vacancy. A significant increase in supply of
vacant retail space increases the risk vacated storefronts and centers must sit idle or
suffer rental income losses until there is sufficient market growth to re-occupy the
space with rent-paying tenants. Commercial properties may be vulnerable to urban
decay if they must suffer a protracted period without a rental income stream. Based
on results of the above sales impact analysis, the following evaluation of operating
resiliency is strictly limited to selected retail store-groups.
Retail Resiliency and Business Failure
The specific sales impact and associated risk of business failure for an individual
business cannot be objectively determined using publicly available data. The
capacity of individual merchandisers to withstand a reduction in sales depends on a
multitude of factors besides the reduction in sales itself. Factors that affect a retailer’s
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-13
ability to weather sales fluctuations include, but are not limited to, business solvency,
operating overhead, turnover of sales inventory, store location, promotional and
merchandising prowess, available financial reserves, and a host of other operating
considerations. Objectively evaluating the economic impact of a sales reduction on
an individual business involves the review and assessment of confidential accounting
information that cannot be readily obtained from business operators themselves or
legally disclosed in a public document such as an EIR. This study seeks to determine
whether the expected sales impact places distinct groups of existing retailers at
significant risk of widespread business failure leading to retail vacancies.
To determine if the estimated sales impact places a particular store-group at
significant risk of widespread business failure, it is useful to consider historic
fluctuations in surrounding area retail store-group activity to get empirical insight
about the competitive resiliency of existing retailers and their ability to overcome a
decline in sales similar to the estimated sales impact attributed to the Bakersfield
Gateway Center. This analysis evaluates the operating resiliency of retailers located
within the City of Bakersfield because the City hosts the vast majority of existing
retailers competing for consumer support within the Bakersfield Metro Area.
Exhibit V-3 provides a long-term detailed assessment of the operating resiliency of
principal store-groups expected to characterize retail activity within the Bakersfield
Gateway Center. The illustrated trends provide a reasonably good indication how the
pool of existing retailers that make up a given store-group is likely to be affected by
the estimated sales impact. Shown is the year-to-year change (described on a
percentage basis) in average sales per establishment, number of establishments, and
constant dollar (inflation-adjusted) retail sales, as reported by the SBOE from 1991 to
2012 for the City of Bakersfield. Years indicated by a relatively significant change
(both positive and negative) are further identified by color-shading. A casual review
of annual changes in retail activity show that from 1991 to 1994 and from 2007 to
2009 nearly all retail store-group activities within the City faced significant operating
challenges. For purpose of this analysis, the reduction in sales per establishment
(sales impact) associated with the Bakersfield Gateway Center is compared to
precedent reductions among existing retailers to assess the operating resiliency of
affected business groups. Similarly, precedent reductions in number of
establishments (indicator of widespread business failure) are also evaluated in
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-14
relation to concurrent or preceding year sales activity to identify operating challenges
associated with widespread business failure.
Operating Resiliency of General Merchandisers
As shown in Exhibit V-3, general merchandising retailers have experienced year-to-
year fluctuations in sales per establishment, the number of competing
establishments, and amount of total store-group sales. Annual increases and
declines describing average sales per establishment among general merchandising
retailers have fluctuated by as much as 33% in given year between 1991 and 2012.
General merchandising retailers as a group have experienced declines in sales per
establishment during 12 of the 21 years evaluated. By comparison, total sales
describing general merchandising retailers has increased in all but 5 of the 21 years
evaluated. Similarly, the number of competing retailers has increased in all but 6 of
the 21 years evaluated. These overall trends provide a good indication that general
merchandising retailers reflect a resilient group able to withstand periodic reductions
in sales performance and quickly replace failing businesses with an influx of new
competitors, provided the store-group as a whole experiences overall positive sales
growth. Overall trends illustrating the operating resiliency of general merchandising
retailers are shown below.
Retail Strength and Resiliance - General Merchandise Group
Note:Sales trends reflect taxable sales only described in terms of 2012 Constant Dollars (inflation adjusted)
Source: SBOE; Alfred Gobar Associates
0
50
100
150
200
250
300
350
400
19
9
0
19
9
1
19
9
2
19
9
3
19
9
4
19
9
5
19
9
6
19
9
7
19
9
8
19
9
9
20
0
0
20
0
1
20
0
2
20
0
3
20
0
4
20
0
5
20
0
6
20
0
7
20
0
8
20
0
9
20
1
0
20
1
1
20
1
2
In
d
e
x
o
f
1
9
9
0
Sales Per Estab
Number of Estabs
Taxable Retail Sales
As shown above, sharp declines in the number of competing establishments
(indicator of widespread business failure) tends to follow multi-year periods when
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average sales achieved per establishment is reduced due to an influx of new
competitors at a pace that is substantially faster than overall sales growth. In 1995,
widespread business failure among general merchandising retailers was preceded by
3-consecutive years of declining sales per establishment (ranging from 4% to 10%
per year). In 2009, widespread business failure was also preceded by 3-consecutive
years of declining sales (ranging from 5% to 21% per year). By comparison, when
average sales per establishment declined by less than 5% over a 2-year period from
2010 to 2011, the number of competing retailers continued to increase by 5.8% over
the same period and by another 2.7% in 2013 (a pace of establishment growth equal
to total sales growth in the same year).
Operating Resiliency of Tire-Battery-Accessories Operations
Due to SBOE reporting limits, Exhibit V-3 identifies operating resiliency for TBA and
auto dealerships as a combined store-group, which is overwhelmingly influenced by
the scale of activity and historical events describing the auto industry (including the
2009 bankruptcy and reorganization of GM and Chrysler). For purpose of this
analysis, operating resiliency trends for all retail store-groups combined is used to
evaluate the operating resiliency of TBA operations and risk of widespread business
failure as illustrated below.
Retail Strength and Resiliance - All Retail Stores Combined
Note:Sales trends reflect taxable sales only described in terms of 2012 Constant Dollars (inflation adjusted)
Source: SBOE; Alfred Gobar Associates
0
25
50
75
100
125
150
175
200
225
250
19
9
0
19
9
1
19
9
2
19
9
3
19
9
4
19
9
5
19
9
6
19
9
7
19
9
8
19
9
9
20
0
0
20
0
1
20
0
2
20
0
3
20
0
4
20
0
5
20
0
6
20
0
7
20
0
8
20
0
9
20
1
0
20
1
1
20
1
2
In
d
e
x
o
f
1
9
9
0
Sales Per Estab
Number of Estabs
Taxable Retail Sales
As shown, the number of willing retail competitors can be expected to increase even
when average sales per establishment fluctuates on a yearly basis, provided total
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-16
store-group sales continues to grow. Even when faced with the combined impact of
reduced sales per establishment and declining overall store-group sales over a
protracted period, the decline in number of retail establishments is not as significant
as the corresponding sales declines.
From 1991 to 1995, existing retailers saw average sales per establishment decline by
a total of 18% over five consecutive years while the corresponding increase in total
retail sales was less than 2%. Despite a protracted challenge to operating resiliency,
the total number of willing competitors steadily increased between 1991 and 1995.
From 2007 to 2009, competing retailers suffered a decline in average sales per
establishment of roughly 25% over a three-year period and even larger corresponding
decline in total store-group sales. The wholesale decline in sales per establishment
from 2007 to 2009, combined with an equally large decline total store-group sales
ultimately triggered a roughly 6% decline in number of competing retailers between
2009 and 2010.
Risk of Business Failure and At-Risk Groups
The above analysis of operating resiliency (refer also to Exhibit V-3) makes clear
similar groups of business within the Bakersfield Metro Area are able to withstand
periodic declines in annual sales performance and fend off business failure risks,
provided overall sales describing the competing group of businesses continues to
grow. In other words, a decline in sales is an inherent component of the competitive
process but is not likely to pose a serious business failure risk unless the magnitude
of the decline is significant and the duration of the decline is protracted. The prior
analysis of the project impact on existing businesses (refer also to Exhibit V-2)
indicates that any measurable decline in sales performance is realistically limited to
two select retail store-groups; general merchandisers and TBA operations. The risk
of widespread business failure and corresponding vacancy within existing retail
facilities is summarized below.
In 2019, the sales shift impact of the Bakersfield Gateway Center is projected to
impose a 1.1% decline in annual sales per establishment among existing general
merchandising anchors and corresponding 0.6% decline among non-anchor
businesses. The sales shift is further expected to involve a 2 to 4 month recovery
period before growth in same-store sales eliminates the reduction in annual sales.
Existing general merchandisers have overcome periodic declines in sales per
establishment that were substantially larger (roughly 3% to 7% per year) and of
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-17
longer duration (2 to 3 consecutive years) than the expected sales impact of the
project without experiencing widespread business failure. Precedent trends
describing the operating resiliency of general merchandising retailers provide a
good indication there is minimal risk the sales impact of the project will lead to
widespread business failure and vacancy of existing general merchandising
facilities.
In 2019, the sales impact of the Bakersfield Gateway Center is projected to
impose a 1.8% decline in annual sales per establishment among existing tires-
batteries-accessories (auto parts) retailers. The decline is expected to require a
7-month recovery period before the loss in sales is eliminated by same-store
sales growth. Existing retailers, including auto supply and accessory shops, have
overcome periodic declines in sales per establishment that were substantially
larger (roughly 3% to 5% per year) and longer duration (2 to 3 consecutive years)
than the expected sales impact of the project without experiencing widespread
business failure. Precedent trends describing the operating resiliency of TBA
retailers provide a good indication there is minimal risk the sales impact of the
project will lead to widespread business failure and vacancy of these non-anchor
retail facilities.
The expected sales impact of the project is limited to two retail store-groups and the
corresponding risk of widespread business failure among existing businesses is
minimal. Based on the precedent level of operating resiliency describing affected
store-group businesses and relatively limited magnitude and duration of the projected
sales impact, there are no at-risk store-groups of retail activity.
Protracted Vacancy Risk
There is no significant risk of widespread business failure among existing groups of
retailers that will compete for sales support when the Bakersfield Gateway Center is
completed and in operation. Determining there is negligible risk of widespread failure
is not the same as determining no individual retail operation will suffer a loss that
results in business failure. Every healthy retail market is characterized by the regular
entry (grand openings, store expansions, etc.) and exit (liquidation sales, bankruptcy,
etc.) of competing businesses. Operating resiliency trends (refer to Exhibit V-3)
highlight the significant role and influence of macro-economic cycles (versus a single
competing endeavor) in driving the entry and exit of competing businesses.
Regardless, it is possible that sales activity within the Bakersfield Gateway Center will
add to overall competitive pressure that ultimately contributes to business failure for
one or more of existing storefront businesses.
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-18
Business failure, even if limited to a single competing operation, results in the
vacancy of previously occupied retail space. Retail vacancy reduces the pool of
rental income available for maintaining the physical property. A protracted period of
vacancy increases the risk an affected property will suffer from neglect that
contributes to urban decay. How long a vacated retail space is likely to remain
unoccupied is greatly influenced by the pace of market growth and corresponding
potential to re-occupy a vacated storefront with a replacement business.
The impact of retail vacancy is not always strictly limited to the vacated retail space
itself. A vacated anchor space is likely to have a compounding effect that also
increases operating challenges, risk of business failure, and vacancy in adjacent non-
anchor storefront locations. Anchor stores have a dominant influence on the
competitive attraction and overall sales performance describing most forms of
contemporary retail centers because anchor-scale operations tend to attract repeat
shopper traffic that increases exposure and opportunity for increased sales
performance in adjacent non-anchor storefronts. When a retail anchor space is
vacated the risk of attendant vacancy in adjacent non-anchor storefront space also
increases. The possibility remains that development and operation of the Bakersfield
Gateway Center may contribute to competitive pressure that results in the failure of
one or more businesses represented among the different store-group activities
competing with the project.
Vacancy Replacement Potential
Exhibit V-4 provides a detailed assessment of future growth in retail support following
completion of the Bakersfield Gateway Center in 2019. Shown is the cumulative
incremental increase in sales support for a broad cross-section of retail activity
(including a selected breakout for Other Specialty-Misc. retail products). Identified
support potential is based on a per capita level of expenditure that describes
consumers throughout the Bakersfield Metro Area. Also shown is the corresponding
amount of retail space that can be supported based on an indicated level of sales per
square foot of occupied space.
The amount of added retail floor area associated with future incremental increases in
sales support is also summarized below. As shown below, the quantity and variety of
retail floor space demanded to satisfy incremental amounts of market growth
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-19
substantially reduces the risk of a protracted period of retail vacancy. Also as shown
below, the amount of floor space potential for each store-group is sufficient to warrant
a wide variety of anchor-scale retail operations as a replacement business within
vacated anchor space.
Post-Project Retail Support Potential - Bakersfield Metro Area
Cumulative Increase In Incremental Retail Floor Space Support
Retail Store-Group Activity 2019 2020 2021 2022 2023 2024 2025
General Merchadising - 114,000 257,000 393,000 520,000 644,000 767,000
Apparel & Accessories 37,000 80,000 132,000 183,000 230,000 275,000 320,000
Furniture & Hshld Appl/Elect.57,000 86,000 121,000 155,000 187,000 218,000 249,000
Other Specialty-Misc Retail 100,000 166,000 247,000 326,000 399,000 469,000 540,000
Building Materials 14,000 53,000 102,000 148,000 192,000 234,000 276,000
Drug & Sundries n.a.n.a.n.a.n.a.n.a.n.a.n.a.
Food Store Activity n.a.n.a.n.a.n.a.n.a.n.a.n.a.
Eating & Drinking 70,000 143,000 233,000 320,000 401,000 479,000 557,000
Auto Parts & Accsy - 11,000 26,000 40,000 53,000 65,000 78,000
Service stations - 6,000 13,000 20,000 27,000 34,000 40,000
Auto & Vehicle Sales - 30,000 60,000 100,000 130,000 160,000 190,000
All Retail Activity Combined 278,000 689,000 1,191,000 1,685,000 2,139,000 2,578,000 3,017,000
Source: Alfred Gobar Associates
Based on the outlook of retail potential following project completion and operation, the
risk of protracted retail vacancies contributing to urban decay is summarized below.
The possibility remains that one or more existing retail operations, including an
anchor-scale retailer, may suffer business failure after the project is completed
and in operation. Any business failure will invariably result in vacancy of
previously occupied space. Vacancy resulting from the departure of an anchor
operation could also have a compounding effect that extends to adjacent non-
anchor operations due to the loss of repeat shopper traffic commonly attributed to
anchor stores. Future retail market growth throughout the Bakersfield Metro Area
is projected to drive demand for nearly 1.2 million square feet of added retail
space hosting a wide variety of store-group activities within 2 years following
project completion and operation. Based on the outlook of demand for added
retail space, the risk of protracted retail vacancies attributed to the project is
negligible.
Cumulative Effect of Project Development
Potential cumulative effects include the direct environmental impact that can be
attributed to the proposed project and indirect effects that may also exist when the
proposed project is considered in the context of a broader group of future
development of which it is a part. The direct environmental impact of the project has
been evaluated above in the context of existing and future development that will be in
place when the entire project is completed and in operation during 2019. A number
of future retail and lodging developments are contemplated within the Bakersfield
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-20
Metro Area that have been conceptually approved but have made little formal
progress toward completion, and consequently excluded from the future supply of
retail and lodging development expected to be in place when the Bakersfield
Gateway Center is completed. For purpose of this analysis, these future planned but
otherwise unscheduled development programs are considered in evaluating the
potential cumulative effect of the project.
With respect to the project cumulative effect on retail facilities, roughly 2.08 million
square feet of future unscheduled development is currently contemplated within
various area plans (refer also to Exhibit III-12). The risk that the Bakersfield Gateway
Center plus an unscheduled supply of future retail development could have a
cumulative effect on existing retail facilities within the Bakersfield Metro Area depends
on; a) the level of interim retail market growth contemplated in advance of project
completion (pre-project potential); and b) the amount incremental market growth
contemplated once the project and unscheduled future retail has been developed
(post-project potential). The potential cumulative effect of project development is
summarized below.
Cumulative Effect of Project & Unscheuduled Future Retail
Future Incremental Incremental Cumulative
Reference Retail Retail Market
Market Growth Criteria Year Demand Supply Balance
(Sq Ft)(Sq Ft)(Sq Ft)
Pre-Project Cumulative Residual 2014-2019 2,032,000 - 2,032,000
Bakersfield Gateway Center 2019 - 800,000 1,232,000
Unscheduled Future Retail 2019 - 2,081,700 (849,700)
Post-Project Incremental Residual 2019 278,000 - (571,700)
Post-Project Incremental Residual 2020 375,000 - (196,700)
Post-Project Incremental Residual 2021 465,000 - 268,300
Post-Project Incremental Residual 2022 447,000 - 715,300
Post-Project Incremental Residual 2023 417,000 - 1,132,300
Post-Project Incremental Residual 2024 402,000 - 1,534,300
Post-Project Incremental Residual 2025 403,000 - 1,937,300
Source: Alfred Gobar Associates
The above assessment assumes the significant supply of unscheduled future retail
development is completed concurrent with the proposed project (a highly improbable
scenario). Based on the outlook of residual retail potential there is negligible risk
project development will have a significant and protracted cumulative impact on
existing retail facilities.
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-21
With respect to the cumulative effect on lodging facilities, only one known future
unscheduled lodging facility is contemplated within the Bakersfield Metro Area. The
unscheduled future project is contemplated as a 104-room upper-midscale facility in
the Oildale area. If developed, it is likely this future hotel would compete for a share of
upscale lodging potential. The market outlook for upscale lodging in the Bakersfield
Metro Area indicates another 475 upscale rooms could be added to the supply of
upscale hotels by 2019 without adversely affecting precedent sales performance of
existing facilities (2,323 existing upscale rooms in 18 hotel facilities). It is anticipated
that lodging activity within the Bakersfield Gateway Center will include a 120-room
facility targeting an upscale lodging experience and a 120-room facility targeting a
midscale-economy lodging experience. Assuming all 240 rooms hosted within the
project compete for upscale lodging support, enough residual potential is indicated by
2019 to add 240 upscale rooms within the project and another 104 upscale rooms at
the Oildale location (344 rooms total) without adversely affecting occupancy
performance within existing hotels. Based on the outlook of residual support for
upscale lodging there is negligible risk project development will have a significant and
protracted cumulative effect on existing lodging facilities.
Project Economic Impact and Urban Decay
The Bakersfield Gateway Center has been evaluated extensively in terms of
economic impacts likely to result from the completion of Phase 1 in 2016 and overall
project completion in 2019. This section addresses the corresponding environmental
impact that can be anticipated in the form of urban decay. For purpose of this
analysis, “urban decay” is defined as physical conditions brought on by prolonged
vacancy that include, but are not limited to, the deterioration of buildings and parking
lots that create a haven for litter, graffiti, vandalism, loitering, and homeless
populations. Some clearly visible manifestations of urban decay include plywood-
boarded doors and windows; long-term unauthorized parking and abandoned
vehicles; broken glass and debris littering the site; severely eroded parking surfaces
and broken parking-circulation barriers; dead trees and shrubs accompanied by
weeds; substantial lack of building maintenance; graffiti and evidence of gang and
other illicit activity; homeless encampments; and unsightly fencing used to cordon off
buildings and storefront entrances.
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-22
Prolonged vacancy is a condition that significantly contributes to urban decay
because it creates financial conditions, including protracted periods without rental
income that diminish property owner incentives to maintain vacant space. Property
owners are more likely to provide regular upkeep in and around small amounts of
vacant space over extended periods (such as in-line storefront) because adjoining
tenants continue to generate rental income and demand a commensurate level of
maintenance. Property owners also have a strong incentive to maintain property
while actively marketing space to prospective tenants in order to attract interest.
Property owner incentives to maintain property improvements are significantly
challenged when a substantial portion of rental space remains vacant significantly
longer than is customarily required to find a replacement tenant.
The physical effects of urban decay can spread beyond the initial vacated space, first
to adjoining space within the same center or location, and subsequently to adjacent
retail properties. It is the spread of urban decay that can have a reverberating effect
in a neighborhood by contributing to shopper avoidance of the impacted center, which
further diminishes the appeal of remaining tenants and contributes to the perception
that the property is no longer a viable retail venue. The risk that a prolonged vacancy
will fuel the spread of urban decay is not only influenced by the amount of vacated
space and period of vacancy, but also the anchoring effect of the vacated space. If
remaining retail tenants are highly dependent on shopper traffic previously generated
by the vacated anchor, a prolonged vacancy may significantly increase the risk of
store closings in adjacent space and corresponding downward cycle that ultimately
causes shoppers to avoid the center in favor of another retail location.
The urban decay process generally takes several years to materialize because
property owners typically seek to remedy the loss of rental income by actively
marketing space to prospective replacement tenants and maintaining a functional
setting for remaining tenants before ultimately choosing to forego property
maintenance expense. Property owners are reluctant to forego the care and
maintenance of a property because the re-sale or liquidation value of a property
holding is affected by the physical condition of improvements. Financial conditions
that contribute to urban decay can be exacerbated by broader economic decline that
may impact an entire market region. Significant urban decay, however, is not the
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Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-23
result of a single property standing vacant over a one- to two-year period in an
otherwise vibrant market that characterizes the Bakersfield Metro Area.
In determining whether or not the Bakersfield Gateway Center will cause a significant
environmental impact in the form of urban decay, an extensive analysis was
conducted of the probable chain of economic and physical events likely to occur once
the project is developed and in operation. The analysis included an assessment of
market potential and determination of the sales impact directly attributed to the
proposed project. The analysis also assessed the likely ability of business groups
affected by the sales impact to recover from a reduction in average sales per
establishment based on the precedent operating resiliency of existing businesses.
The sales impact analysis served to identify whether or not there were any retail
store-groups at unprecedented risk of suffering a significant number of store closings.
Future retail potential was then evaluated to determine the probable period of time
impacted space would remain vacant before being re-occupied with replacement or
alternate retail tenants.
Results of the analysis of economic impact and corresponding environmental impact
attributed to the Bakersfield Gateway Center is summarized as follows.
The economic analysis indicates the sales impact on existing retailers (including
entertainment-leisure activities) attributed to the project is negligible for all forms
of retail activity with the exception of general merchandising and tire-battery-
accessory retailers. The identified sales impact on affected business groups is
smaller in magnitude (less than 2%) and shorter in duration (less than 1 year)
than precedent trends defining the operating resiliency of existing retailers and
possess minimal risk of contributing to widespread business failure and attendant
vacancies. The possibility remains that some retail space may be vacated
because one or more existing retailers suffer a business failure. The risk that
vacated space will remain unoccupied over a protracted period is negligible based
on the pace of incremental growth in the retail market, which is expected to
demand 690,000 square feet of added retail space within a year following project
completion and as much as 1.2 million square feet of added space within two
years.
The economic analysis indicates the sales impact on existing hotel facilities
attributed to the project is negligible. Sufficient growth in residual demand for
upscale and midscale-economy lodging is indicated to support 240-rooms of
envisioned hotel activity within the project and still enable existing hotel
operations to achieve an above average level of room-night sale performance.
The risk of lodging business failure and attendant hotel vacancy attributed to the
project is also negligible. Long-term market trends provide a strong indication that
older economy-priced hotels in the Bakersfield Metro Area are under increased
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis – Administrative Draft V-24
competitive pressure that could contribute to business failure before, during, and
after the development period describing project completion. Incidental hotel
vacancy affecting one or more economy hotels is more correctly attributed to
existing competitive pressure describing shifting traveler preferences in the
Bakersfield lodging market.
The most probable environmental impact that can be attributed to the Bakersfield
Gateway Center is a relatively brief period of vacancy impacting one or more retail
storefront locations in the surrounding Bakersfield Metro Area. The likely impact
corresponding to the vacancy is a diminished level of rental income from the affected
retail property. Incremental growth in retail demand provides a strong indication the
duration of any vacancy will involve a significantly shorter period than needed to bring
about the adverse effects of urban decay. The proposed Bakersfield Gateway Center
can be expected to have a quantifiable economic impact that affects existing retailers
throughout the Bakersfield Metro Area, but no significant environmental impact is
expected in the form of urban decay.
F:\BAKERSFIELD-GATEWAY-URBAN-DECAY_ADMIN-DRAFT\OCTOBER 17, 2014\B
Exhibit V-1
Bakersfield Gateway Center - Projected Sales Shift
2016 Development Outlook - Phase 1
Bakersfield Gateway Center Available Target Sales Projected Sales Shift
Phase 1 Target Residual As Share of Req'd From As Share of
Retail Store-Group Category Floor Area Sales Potential Residual Area Stores Target Sales
(Sq Ft)($000's)($000's)($000's)
GAFO Retail Activity 206,000 $62,028 $545,226 11%$0 neg'l
General Merchadising 30,000 6,420 17,064 38%0 neg'l
Apparel & Accessories 46,000 14,812 109,327 14%0 neg'l
Furniture & Hshld Appl/Elect.12,000 3,744 138,847 3%0 neg'l
Other Specialty-Misc Retail 118,000 37,052 279,988 13%0 neg'l
Sporting Goods 60,000 21,000 40,734 52%0 neg'l
All Other Specialty-Misc 58,000 16,052 239,254 7%0 neg'l
Building Materials 120,000 36,480 38,540 95%0 neg'l
Drug & Sundries 0 0 0 n.a.p.n.a.p.n.a.p.
Food & Beverage 0 0 0 n.a.p.n.a.p.n.a.p.
Eating & Drinking 27,000 10,800 213,922 5%0 neg'l
Auto TBA-Maint 10,000 2,540 0 >100%(2,540)100%
Retail & Dining Sub-Total 363,000 $111,848 $797,688 14%($2,540)2%
Consumer-Ent Services 99,000 6,542 n.a.n.a.n.a.n.a.
All Retail-Dining-Ent Activity 462,000 $118,390 $797,688 15%($2,540)2%
2019 Development Outlook - Phase 2 (Incremental)
Bakersfield Gateway Center Available Target Sales Projected Sales Shift
Phase 2 Target Residual As Share of Req'd From As Share of
Retail Store-Group Category Floor Area Sales Potential Residual Area Stores Target Sales
(Sq Ft)($000's)($000's)($000's)
GAFO Retail Activity 320,000 $90,356 $609,464 15%($7,555)8%
General Merchadising 120,000 25,920 18,365 >100%(7,555)29%
Apparel & Accessories 46,000 15,272 121,635 13%0 neg'l
Furniture & Hshld Appl/Elect.48,000 15,456 154,184 10%0 neg'l
Other Specialty-Misc Retail 106,000 33,708 315,280 11%0 neg'l
Sporting Goods 0 0 45,391 n.a.p.0 neg'l
All Other Specialty-Misc 106,000 33,708 269,888 12%0 neg'l
Building Materials 0 0 43,402 n.a.p.0 neg'l
Drug & Sundries 0 0 0 n.a.p.n.a.p.n.a.p.
Food & Beverage 0 0 0 n.a.p.n.a.p.n.a.p.
Eating & Drinking 18,000 7,308 240,912 3%0 neg'l
Auto TBA-Maint 0 0 0 n.a.p.0 neg'l
Retail & Dining Sub-Total 338,000 $97,664 $893,778 11%($7,555)8%
Consumer-Ent Services 0 0 n.a.n.a.n.a.n.a.
All Retail-Dining-Ent Activity 338,000 $97,664 $893,778 11%($7,555)8%
2019 Development Outlook - Completed Project
Bakersfield Gateway Center Available Target Sales Projected Sales Shift
Overall Target Residual As Share of Req'd From As Share of
Retail Store-Group Category Floor Area Sales Potential Residual Area Stores Target Sales
(Sq Ft)($000's)($000's)($000's)
GAFO Retail Activity 526,000 $153,496 $609,464 25%($14,035)9%
General Merchadising 150,000 32,400 18,365 >100%(14,035)43%
Apparel & Accessories 92,000 30,544 121,635 25%0 neg'l
Furniture & Hshld Appl/Elect.60,000 19,320 154,184 13%0 neg'l
Other Specialty-Misc Retail 224,000 71,232 315,280 23%0 neg'l
Sporting Goods 60,000 21,900 45,391 48%0 neg'l
All Other Specialty-Misc 164,000 49,332 269,888 18%0 neg'l
Building Materials 120,000 36,960 43,402 85%0 neg'l
Drug & Sundries 0 0 0 n.a.p.n.a.p.n.a.p.
Food & Beverage 0 0 0 n.a.p.n.a.p.n.a.p.
Eating & Drinking 45,000 18,270 240,912 8%0 neg'l
Auto TBA-Maint 10,000 2,580 0 >100%(2,580)100%
Retail & Dining Sub-Total 701,000 $211,306 $893,778 24%($16,615)8%
Consumer-Ent Services 99,000 6,740 n.a.n.a.n.a.n.a.
All Retail-Dining-Ent Activity 800,000 $218,046 $893,778 24%($16,615)8%
Note:
The Bakersfield Gateway Center is assigned an 80% share of total residual potential to reflect its regional attraction within the Metro area. A
shift in sales from exiisting retailers to project retailers can be anticipated whenever "Target Sale" exceeds "Available Residual Potential".
Source: Alfred Gobar Associates
Gateway-TA-Shift-Impact_6-10-14-Plan/TA-Shift
Exhibit V-2
Bakersfield Gateway Center - 2019 Impact of Projected Sales Shift
Estimated Impact On All Retailers Combined
Bakersfield Gateway Center Existing Retail Store Performance Impact Of Sales Shift
2019 Sales Shift From 2019 Est.Existing Avg Sales Avg Shift Share Of Period to
Retail Store-Group Category On-Site Area Stores Gr. Sales Stores Per Estab.Per Store Sales Recovery
($000's)($000's)($000's)($000's)($000's)(Months)
GAFO Retail Activity $153,496 ($14,035)$2,543,216 2,900 $877 ($5)-0.6%2
General Merchadising 32,400 (14,035)1,365,783 256 5,335 (55)-1.0%3
Apparel & Accessories 30,544 0 389,467 502 776 -- n.a. n.a.
Furniture & Hshld Appl/Elect.19,320 0 260,907 297 878 -- n.a. n.a.
Other Specialty-Misc Retail 71,232 0 527,059 1,845 286 -- n.a. n.a.
Sporting Goods 21,900 0 58,543 120 488 -- n.a. n.a.
All Other Specialty-Misc 49,332 0 468,517 1,725 272 -- n.a. n.a.
Building Materials 36,960 0 437,506 129 3,392 -- n.a. n.a.
Drug & Sundries 0 n.a.p.355,876 110 3,235 -- n.a. n.a.
Food & Beverage 0 n.a.p.1,072,395 340 3,154 -- n.a. n.a.
Eating & Drinking 18,270 0 869,102 1,154 753 -- n.a. n.a.
Auto TBA-Maint 2,580 (2,580)140,799 301 468 (9)-1.8%7
Retail & Dining Sub-Total $211,306 ($16,615)$5,418,894 4,934 $1,098 ($3)-0.3%1
Consumer-Ent Services 6,740 n.a.n.a.n.a.n.a.-- n.a. n.a.
All Retail-Dining-Ent Activity $218,046 ($16,615)$5,418,894 4,934 $1,098 ($3)-0.3%1
Estimated Impact On Anchor Retailers
Bakersfield Gateway Center Existing Retail Store Performance Impact Of Sales Shift
2019 Sales Shift From 2019 Est.Existing Avg Sales Avg Shift Share Of Period to
Retail Store-Group Category On-Site Area Stores Gr. Sales Stores Per Estab.Per Store Sales Recovery
($000's)($000's)($000's)($000's)($000's)(Months)
GAFO Retail Activity -- ($11,930)$1,545,856 162 $9,542 ($74)-0.8%3
General Merchadising -- (11,930)1,039,134 61 17,035 (196)-1.1%4
Apparel & Accessories -- 0 163,606 24 6,817 -- n.a. n.a.
Furniture & Hshld Appl/Elect.-- 0 153,928 32 4,810 -- n.a. n.a.
Other Specialty-Misc Retail -- 0 189,187 45 4,204 -- n.a. n.a.
Sporting Goods -- 0 44,726 7 6,389 -- n.a. n.a.
All Other Specialty-Misc -- 0 144,461 38 3,802 -- n.a. n.a.
Building Materials -- 0 358,264 15 23,884 -- n.a. n.a.
Drug & Sundries n.a.p.n.a.p.277,723 34 8,168 -- n.a. n.a.
Food & Beverage n.a.p.n.a.p.790,179 45 17,560 -- n.a. n.a.
Eating & Drinking -- 0 0 0 -- -- n.a. n.a.
Auto TBA-Maint -- 0 0 0 -- -- n.a. n.a.
Retail & Dining Sub-Total -- ($11,930)$2,972,022 256 $11,609 ($47)-0.4%2
Consumer-Ent Services -- n.a.n.a.n.a.n.a.-- n.a. n.a.
All Retail-Dining-Ent Activity -- ($11,930)$2,972,022 256 $11,609 ($47)-0.4%2
Estimated Impact On Non-Anchor Retailers
Bakersfield Gateway Center Existing Retail Store Performance Impact Of Sales Shift
2019 Sales Shift From 2019 Est.Existing Avg Sales Avg Shift Share Of Period to
Retail Store-Group Category On-Site Area Stores Gr. Sales Stores Per Estab.Per Store Sales Recovery
($000's)($000's)($000's)($000's)($000's)(Months)
GAFO Retail Activity -- ($2,105)$997,360 2,738 $364 ($1)neg'l n.a.
General Merchadising -- (2,105)326,649 195 1,675 (11)-0.6%2
Apparel & Accessories -- 0 225,861 478 473 -- n.a. n.a.
Furniture & Hshld Appl/Elect.-- 0 106,978 265 404 -- n.a. n.a.
Other Specialty-Misc Retail -- 0 337,872 1,800 188 -- n.a. n.a.
Sporting Goods -- 0 13,817 113 122 -- n.a. n.a.
All Other Specialty-Misc -- 0 324,056 1,687 192 -- n.a. n.a.
Building Materials -- 0 79,242 114 695 -- n.a. n.a.
Drug & Sundries n.a.p.n.a.p.78,153 76 1,028 -- n.a. n.a.
Food & Beverage n.a.p.n.a.p.282,216 295 957 -- n.a. n.a.
Eating & Drinking -- 0 869,102 1,154 753 -- n.a. n.a.
Auto TBA-Maint -- (2,580)140,799 301 468 (9)-1.8%7
Retail & Dining Sub-Total -- ($4,685)$2,446,872 4,678 $523 ($1)neg'l n.a.
Consumer-Ent Services -- n.a.n.a.n.a.n.a.-- n.a. n.a.
All Retail-Dining-Ent Activity -- ($4,685)$2,446,872 4,678 $523 ($1)neg'l n.a.
Note:
The indicated "Share of Sales" describes equivalent amount of annual sales shifted away from a typical retailer. An 8% shift in sales is equal to approximately
one-month of forgone sales activity over the course of one year. The indicated "Period to Recovery" describes the likely period (in months) that will elapse before
the identified shift in sales is offset by growth in same-store sales. Same-store sales growth ranges from 3.0% to 3.6% annually based on the estimated rate of
aggregate sales growth at existing retail establishments between 2016 and 2019. As example, a -1.1% sales shift is expected to involve a 4-month recovery
period before sales at existing General Merchandising anchor stores once again reaches the level of overall sales anticipated without project development.
Source: Alfred Gobar Associates
Gateway-TA-Shift-Impact_6-10-14-Plan/TA-Impact
Exhibit V-3
Year-To-Year Growth And Decline In Sales And Establishment Permits - Constant Dollar Trends
City Of Bakersfield, California
1990-2000 2000-2006 2006-2009 2009-2012Retail Store-Group 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CAGR CAGR CAGR CAGR
City Population Growth 3.2%3.3%3.0%3.9%3.4%1.8%2.2%3.5%5.8%4.1%2.3%3.8%4.4%5.0%5.2%4.3%2.6%1.8%1.7%2.4%2.3%1.3%3.4%4.1%2.0%2.0%
GAFO Related Retail Activity
Sales Per Estab 1.0%-5.7%-9.1%-3.5%13.8%-1.7%-29.7%-2.6%-3.7%5.2%4.7%28.2%-13.6%17.0%16.2%-5.3%-9.3%-20.1%11.9%-2.1%0.4%1.1%-4.2%6.9%-6.7%-0.2%
Number of Estabs 5.3%4.6%3.5%7.3%6.8%3.6%4.1%4.7%5.8%7.9%10.8%4.0%11.4%5.5%0.0%-1.5%-3.6%-0.7%-3.6%-3.0%0.8%0.7%5.4%4.9%-2.6%-0.5%
Taxable Retail Sales 3.9%-1.2%1.1%3.1%2.2%3.9%9.6%6.7%6.2%3.9%5.0%4.5%8.2%10.4%10.2%3.6%-6.6%-10.9%-7.6%1.4%2.1%4.8%3.9%6.9%-8.4%2.7%
General Merchandise
Sales Per Estab 1.5%-5.2%-10.0%-4.3%15.5%-2.2%-33.3%-3.5%-5.3%5.3%7.1%32.3%-15.3%17.4%18.2%-5.3%-9.4%-21.8%14.7%-3.4%-1.0%0.0%-5.0%7.9%-6.7%-1.5%
Number of Estabs 7.1%6.7%14.6%9.1%-15.0%3.9%69.8%11.1%12.0%-3.6%-0.9%-24.3%24.7%-10.9%-8.9%11.0%8.8%21.2%-13.3%5.8%0.0%2.7%9.9%-2.8%4.6%2.8%
Taxable Retail Sales 8.7%1.1%3.1%4.4%-1.8%1.6%13.2%7.3%6.1%1.6%6.1%0.1%5.7%4.6%7.7%5.0%-1.4%-5.2%-0.6%2.2%-1.0%2.7%4.4%4.9%-2.4%1.3%
Apparel-Shoes-Accsy
Sales Per Estab 0.4%-3.5%-1.8%7.8%-1.3%10.6%7.9%-0.7%6.8%4.3%-2.2%1.4%-14.1%33.1%2.0%-3.5%-1.3%-14.9%-0.8%20.0%10.3%11.0%2.9%1.9%-5.9%13.7%
Number of Estabs -4.8%-0.9%0.0%-6.9%2.5%-6.8%-1.0%3.2%-1.5%9.8%10.8%8.9%21.5%-0.3%12.9%11.7%6.1%8.4%7.6%-9.5%1.1%0.7%-0.8%10.7%7.4%-2.7%
Taxable Retail Sales -4.4%-4.4%-1.8%0.3%1.1%3.1%6.7%2.4%5.1%14.6%8.4%10.5%4.4%32.7%15.2%7.8%4.8%-7.7%6.7%8.6%11.5%11.8%2.1%12.8%1.0%10.6%
Hshld Furn-Elect-Appl
Sales Per Estab -0.8%-14.5%1.8%6.9%4.2%-2.6%-10.9%4.8%5.1%10.4%-8.9%13.2%2.7%7.8%1.2%-12.1%-13.9%4.1%4.3%-1.4%11.6%5.2%0.1%0.3%-2.2%5.0%
Number of Estabs -0.6%11.8%1.1%-3.3%-0.6%-2.9%7.6%1.1%5.9%-2.0%12.5%0.0%4.6%2.2%10.8%15.6%3.7%-7.5%-4.2%1.5%1.8%2.1%1.7%7.5%-2.8%1.8%
Taxable Retail Sales -1.4%-4.4%2.9%3.4%3.6%-5.4%-4.1%5.9%11.4%8.2%2.5%13.2%7.5%10.2%12.1%1.7%-10.7%-3.7%-0.1%0.1%13.6%7.4%1.9%7.8%-4.9%6.9%
Specialty-Misc Goods
Sales Per Estab -8.1%-7.4%-6.3%-10.0%-0.5%4.5%6.9%2.0%-0.9%-5.2%-7.4%1.8%2.9%5.3%14.7%8.1%-8.9%-20.6%-25.8%-2.9%-2.9%2.7%-2.6%4.0%-18.7%-1.1%
Number of Estabs 9.6%4.5%4.3%12.9%10.3%6.5%1.5%5.0%6.4%10.0%11.5%5.7%10.2%7.7%-2.7%-6.5%-7.3%-2.9%-5.7%-2.4%0.5%0.3%7.1%4.1%-5.3%-0.5%
Taxable Retail Sales 0.7%-3.2%-2.3%1.5%9.7%11.3%8.5%7.1%5.5%4.4%3.3%7.6%13.3%13.4%11.6%1.1%-15.6%-22.9%-30.1%-5.3%-2.4%3.1%4.2%8.3%-23.1%-1.6%
Building Materials
Sales Per Estab -21.7%-6.9%13.0%3.2%-1.3%18.2%8.8%16.3%22.1%-4.9%3.2%17.3%9.9%33.0%6.8%-16.6%2.8%-29.4%-21.3%0.6%17.9%12.7%3.8%7.9%-17.0%10.2%
Number of Estabs 9.9%-5.0%-7.4%-3.4%3.5%-13.6%-1.3%4.0%-2.6%18.4%2.2%-2.2%12.2%0.0%8.9%10.9%-21.3%11.5%17.8%-4.8%-6.7%-5.4%-0.1%5.2%1.1%-5.6%
Taxable Retail Sales -14.0%-11.6%4.7%-0.3%2.2%2.1%7.4%20.9%19.0%12.6%5.5%14.7%23.4%33.0%16.3%-7.5%-19.1%-21.3%-7.3%-4.2%10.0%6.6%3.7%13.5%-16.1%4.0%
Drug & Sundries
Sales Per Estab -12.0%13.8%-17.3%4.5%-13.4%-0.5%-10.1%7.9%-10.9%8.4%3.3%-9.1%0.5%-0.2%-5.1%-1.1%-5.6%-9.9%3.5%-24.3%-4.9%-9.4%-3.5%-2.0%-4.2%-13.3%
Number of Estabs 15.6%-13.5%9.4%-5.7%9.1%-2.8%8.6%-13.2%3.0%-5.9%3.1%9.1%0.0%0.0%8.3%5.1%4.9%7.0%2.2%19.1%3.6%12.1%0.0%4.2%4.7%11.4%
Taxable Retail Sales 1.8%-1.6%-9.5%-1.5%-5.5%-3.3%-2.4%-6.3%-8.2%2.0%6.6%-0.8%0.5%-0.2%2.8%4.0%-1.0%-3.6%5.7%-9.8%-1.5%1.6%-3.5%2.1%0.3%-3.4%
Food & Grocery
Sales Per Estab -2.5%0.3%-17.9%-9.1%-4.3%3.2%-4.1%-2.8%7.8%4.2%-4.9%8.5%3.2%4.3%3.5%8.7%-4.6%-12.3%0.5%-6.7%-3.3%3.7%-2.8%3.8%-5.6%-2.2%
Number of Estabs 6.3%8.3%5.5%2.6%4.6%5.8%5.0%2.2%-0.4%2.1%4.2%-1.6%3.7%0.4%2.8%-4.2%-6.0%2.1%-15.4%2.0%3.9%-3.7%4.2%0.8%-6.7%0.7%
Taxable Retail Sales 3.6%8.7%-13.4%-6.7%0.1%9.2%0.7%-0.7%7.4%6.4%-0.9%6.7%7.0%4.7%6.4%4.1%-10.4%-10.5%-15.0%-4.8%0.4%-0.1%1.3%4.6%-12.0%-1.5%
Auto Dealers-Parts
Sales Per Estab -5.5%-10.1%0.8%-1.7%1.9%5.3%3.9%11.8%5.3%1.1%6.4%-1.2%-0.7%4.9%0.0%-12.8%-22.3%-31.8%-2.7%9.5%11.8%17.3%1.1%-0.8%-19.8%12.8%
Number of Estabs -2.7%3.5%5.4%7.0%1.8%2.3%1.1%2.8%9.3%6.5%10.4%3.0%5.0%0.0%5.5%11.6%28.2%2.4%-16.6%-7.1%1.0%2.9%3.7%5.8%3.0%-1.1%
Taxable Retail Sales -8.0%-7.0%6.2%5.2%3.7%7.7%5.1%15.0%15.2%7.7%17.5%1.7%4.2%4.9%5.6%-2.7%-0.4%-30.2%-18.9%1.8%12.9%20.8%4.8%5.0%-17.4%11.6%
All Retail Combined
Sales Per Estab -3.9%-4.8%-2.5%-3.9%-2.9%2.9%4.3%2.8%4.8%-0.8%-1.3%-0.8%-1.5%5.2%7.5%0.6%-3.9%-14.2%-7.2%2.4%6.1%6.4%-0.4%1.5%-8.5%5.0%
Number of Estabs 4.5%2.7%2.6%5.2%5.1%2.4%1.1%4.3%4.1%7.0%8.2%4.5%9.7%4.3%1.8%0.1%0.1%0.9%-3.6%-1.8%0.6%0.7%3.9%4.7%-0.9%-0.1%
Taxable Retail Sales 0.5%-2.2%0.0%1.1%2.1%5.3%5.5%7.2%9.2%6.2%6.8%3.6%8.1%9.7%9.4%0.7%-3.9%-13.4%-10.5%0.6%6.8%7.2%3.4%6.3%-9.3%4.8%
Note:Sales trends reflect taxable sales only, described in terms of 2012 Constant Dollars (inflation adjusted)XXX - Decline in excess of 8.33% (or an equivalent loss of one-month of activity)
Drug & Sundries store-group reflect special tabulations prepared by the SBOE XXX - Decline in excess of 3.00% but not exceeding 8.33%XXX - Increase in excess of 8.33% (or an equivalent gain of one-month of activity)
Source: California State Board of Equalization; Alfred Gobar Associates
SBOE-Estab-Trends_City-Level/City Pct Chg
Exhibit V-4
Post-Project Growth In Retail Sales Support - Bakersfield Metro Area
2019 Ref.Cumulative Increase In Incremental Support Potential ($000's)
Per Capita
Retail Store-Group Activity Sales 2019 2020 2021 2022 2023 2024 2025
GAFO Retail Activity 4,344 61,778 135,006 229,366 323,791 415,968 509,142 605,625
General Merchadising 1,667 - 28,099 64,308 100,541 135,912 171,665 208,688
Apparel & Accessories 833 12,150 26,185 44,271 62,369 80,037 97,895 116,388
Furniture & Hshld Appl/Elect.538 17,341 26,411 38,098 49,793 61,210 72,750 84,700
Other Specialty-Misc Retail 1,306 32,287 54,310 82,689 111,087 138,809 166,831 195,849
Building Materials 717 4,323 16,407 31,979 47,561 62,772 78,148 94,070
Drug & Sundries 522 n.a.n.a.n.a.n.a.n.a.n.a.n.a.
Food Store Activity 1,715 n.a.n.a.n.a.n.a.n.a.n.a.n.a.
Eating & Drinking 1,794 28,287 58,535 97,511 136,515 174,589 213,076 252,929
Auto Parts & Accsy 196 - 3,296 7,543 11,793 15,942 20,136 24,478
All Retail (Excld Fuel & Auto)9,287 94,388 213,243 366,399 519,660 669,271 820,501 977,102
Service stations 1,665 - 28,069 64,239 100,433 135,766 171,480 208,464
Auto & Vehicle Sales 1,677 5,593 33,866 70,298 106,755 142,343 178,317 215,569
All Retail Activity Combined 12,629 99,981 275,178 500,935 726,848 947,380 1,170,299 1,401,134
Selected Other Specialty-Misc 869 24,416 39,071 57,955 76,853 95,300 113,946 133,255
Sporting Goods 191 8,710 11,936 16,093 20,253 24,314 28,419 32,670
Hobby & Crafts 90 304 1,827 3,789 5,753 7,671 9,609 11,615
Fabrics 31 291 817 1,495 2,174 2,836 3,506 4,199
Books, Music, & Media 88 5,812 7,299 9,215 11,131 13,003 14,894 16,853
Party Supplies 24 131 530 1,045 1,560 2,063 2,572 3,098
Pets & Pet Supplies 118 905 2,902 5,476 8,052 10,567 13,109 15,741
Beer, Wine, & Liquor 64 4,540 5,621 7,014 8,408 9,769 11,144 12,568
Office Supplies 133 3,723 5,967 8,858 11,751 14,575 17,429 20,385
Other Specialty-Misc Anchors 129 - 2,171 4,969 7,769 10,503 13,265 16,126
2019 Ref.Cumulative Increase In Incremental Retail Floor Space Support
Store Sales
Retail Store-Group Activity Per SF 2019 2020 2021 2022 2023 2024 2025
GAFO Retail Activity n.a.194,000 446,000 757,000 1,057,000 1,336,000 1,606,000 1,876,000
General Merchadising 240 - 114,000 257,000 393,000 520,000 644,000 767,000
Apparel & Accessories 320 37,000 80,000 132,000 183,000 230,000 275,000 320,000
Furniture & Hshld Appl/Elect.300 57,000 86,000 121,000 155,000 187,000 218,000 249,000
Other Specialty-Misc Retail 320 100,000 166,000 247,000 326,000 399,000 469,000 540,000
Building Materials 300 14,000 53,000 102,000 148,000 192,000 234,000 276,000
Drug & Sundries 425 n.a.n.a.n.a.n.a.n.a.n.a.n.a.
Food Store Activity 425 n.a.n.a.n.a.n.a.n.a.n.a.n.a.
Eating & Drinking 400 70,000 143,000 233,000 320,000 401,000 479,000 557,000
Auto Parts & Accsy 275 - 11,000 26,000 40,000 53,000 65,000 78,000
All Retail (Excld Fuel & Auto)n.a.278,000 653,000 1,118,000 1,565,000 1,982,000 2,384,000 2,787,000
Service stations 4,500 - 6,000 13,000 20,000 27,000 34,000 40,000
Auto & Vehicle Sales 1,000 - 30,000 60,000 100,000 130,000 160,000 190,000
All Retail Activity Combined n.a.278,000 689,000 1,191,000 1,685,000 2,139,000 2,578,000 3,017,000
Selected Other Specialty-Misc n.a.67,000 110,000 167,000 216,000 265,000 312,000 358,000
Sporting Goods 365 23,000 32,000 42,000 52,000 61,000 70,000 78,000
Hobby & Crafts 325 - 5,000 11,000 16,000 21,000 26,000 31,000
Fabrics 300 - 2,000 4,000 6,000 8,000 10,000 12,000
Books, Music, & Media 300 19,000 23,000 29,000 34,000 39,000 44,000 49,000
Party Supplies 300 - 1,000 3,000 4,000 6,000 7,000 9,000
Pets & Pet Supplies 325 2,000 8,000 16,000 23,000 29,000 36,000 42,000
Beer, Wine, & Liquor 350 12,000 15,000 19,000 22,000 25,000 28,000 31,000
Office Supplies 325 11,000 17,000 26,000 33,000 41,000 48,000 55,000
Other Specialty-Misc Anchors 275 - 7,000 17,000 26,000 35,000 43,000 51,000
Note: 2019 per capita potential increased by 1.5% annually over period. 2019 store sales per square foot increased 2.1% annually over period.
Source: Alfred Gobar Associates
Gateway-TA-Potential_6-10-14-Plan/Future-Pot
ALFRED GOBAR ASSOCIATES
Bakersfield Gateway Urban Decay Analysis
Appendices
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Bakersfield Gateway Urban Decay Analysis A-1
Appendix A
PERMITTED USES IN C-2 COMMERCIAL ZONE
BAKERSFIELD, CA
Store Store-
Comm'l Group Group
Zone1 Activity Analyzed Description Of Permitted Use
C1 Retail X Apparel and accessory specialty shops, excluding large department stores.
C2 Retail X Apparel and accessory stores.
C2 Retail X Appliance store, including stoves, refrigerators, etc. and including repair.
C1 Retail X Bakery, retail only.
C1 Retail X Book and stationery store.
C2 Retail X Camera and photographic supply.
C1 Retail X Candy, nut and confectionery store.
C1 Retail Christmas tree sales, between November 15 to December 26 each year.
C2 Retail X Computers and computer software store.
C1 Retail X Cosmetic store.
C2 Retail X Department store.
C1 Retail X Drugstore, pharmacy.
C1 Retail X Fabric, yardage store.
C2 Retail Farmers market; provided it meets planning department requirements.
C1 Retail Fireworks sales, limited between June 1 and July 5 each calendar year.
C2 Retail X Floor covering store.
C1 Retail X Florist.
C2 Retail X Furniture store, including rental.
C2 Retail X Gift, novelty and souvenir store.
C1 Retail X Grocery stores of any kind.
C2 Retail X Hardware store, including home building and garden supply.
C2 Retail X Hobby, toy and game store.
C2 Retail X Home furnishings, including kitchenware, glassware, lamps, etc.
C1 Retail X Interior decorating, including drapery, curtain and upholstery sales.
C1 Retail X Jewelry, watch, clocks, silverware, coins and gemstones including repair.
C1 Retail X Liquor store.
C2 Retail X Luggage and leather goods.
C2 Retail X Military surplus store.
C2 Retail X Musical instrument store.
C1 Retail X Newspaper, magazine store.
C2 Retail X Nurseries.
C2 Retail X Paint, glass and wallpaper store.
C1 Retail X Pet and pet supply store, including grooming services.
C2 Retail X Pool and spa sales, provided there is no outside storage of material.
C2 Retail X Radio, television and other consumer electronics store, including repair.
C2 Retail X Record, tape, disk and other pre-recorded music and video store.
C2 Retail X Restaurant and eating places, including incidental on-site alcohol sales.
C1 Retail X Restaurants and eating places, excluding on-site alcohol sales.
C2 Retail X Sewing, needlework and piece good store.
C1 Retail X Shopping centers.
C2 Retail X Sporting goods, including bicycles, camping equipment, firearms, etc.
C1 Retail X Tobacco store.
C2 Retail X Used merchandise, including antiques, books, furniture, etc.
C2 Retail X Variety store.
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Bakersfield Gateway Urban Decay Analysis A-2
PERMITTED USES IN C-2 COMMERCIAL ZONE
BAKERSFIELD, CA
Store Store-
Comm'l Group Group
Zone1 Activity Analyzed Description Of Permitted Use
C1 Retail X Video disk/tape rental.
C2 Retail X Automobile accessory or part stores, excluding major mechanical work.
C2 Auto Automobile dealership, new and used.
C2 Auto Motorcycle dealership, new and used.
C0 Civic Church, excluding schools.
C1 Civic Church, excluding schools.
C2 Ent-Rec Bowling center, billiards.
C2 Ent-Rec Card room, bingo parlor.
C2 Ent-Rec X Motion picture theater and auditoriums, excluding drive-in.
C1 Ent-Rec X Physical fitness facility.
C1 Ent-Rec Private service clubs, lodges.
C2 Ent-Rec Skating rinks.
C2 Ent-Rec X Theater, cinema, excluding drive-in.
C2 Ent-Rec Video arcade.
C0 Gov't Post office and other courier or parcel delivery services.
C2 Medical Hospital, sanitarium.
C1 Medical Resthome, convalescent home, adult care facility, or residential care facility.
C1 Medical Veterinary (small animal only), excluding kennel services.
C0 Office Accounting, auditing, tax preparation and bookkeeping services.
C0 Office Advertising agencies.
C0 Office Banks, savings and loans, credit unions and other financial institutions.
C0 Office Business and management consulting services.
C0 Office Business and professional membership organizations.
C0 Office Commercial art and graphic design.
C0 Office Commercial photography, including portrait studios.
C0 Office Computer programming and data processing services.
C0 Office Consumer credit reporting and collection services.
C0 Office Engineering, surveying, architectural and environmental planning services.
C0 Office Family and social service, clinics and centers.
C0 Office Governmental services and administration, including libraries, museums, etc.
C0 Office Insurance services.
C0 Office Legal services.
C0 Office Management and public relations services.
C0 Office Medical and dental laboratories.
C0 Office Medical, dental, psychiatric and other health practitioner offices and clinics.
C0 Office Mortgage, loan and personal credit institutions.
C0 Office Public and private utility administration.
C0 Office Real estate development, sales and property management services.
C0 Office Secretarial and court reporting services.
C0 Office Telecommunications administration.
C0 Office Television, radio and cable broadcasting stations.
C0 Office Title and escrow offices.
C0 Office Trusts and investment agencies.
C2 Service Adult entertainment establishments as defined in Section 17.69.020.
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Bakersfield Gateway Urban Decay Analysis A-3
PERMITTED USES IN C-2 COMMERCIAL ZONE
BAKERSFIELD, CA
Store Store-
Comm'l Group Group
Zone1 Activity Analyzed Description Of Permitted Use
C2 Service Automobile rental agency, including limousine service.
C1 Service Automobile service stations, including convenience stores but not truck stops.
C2 Service Carpet and upholstery cleaners.
C2 Service Carwash, detailing.
C0 Service Day care nursery.
C0 Service Detective and security systems services.
C0 Service Direct mail advertising services.
C0 Service Employment agency and help supply services.
C2 Service Funeral services, including a crematory if it is incidental to the main use.
C2 Service Garage for public or commercial parking.
C1 Service Garment cleaning, pressing, alteration and repair.
C1 Service Hair styling shop and beauty salon, including tanning salons.
C2 Service X Hotel/Motel, with incidental restaurants, bars, cocktail lounges, etc.
C1 Service Laundromat.
C1 Service Locksmith.
C0 Service Palm reading, fortune telling, astrologic and psychic services.
C0 Service Pharmacies, in conjunction with medical clinics.
C1 Service Photocopying and duplicating services.
C1 Service Photographic shops and developing services.
C2 Service Taxidermist.
C1 Service Temporary promotional activity as defined in Section 17.04.610.
C2 Service Trade, vocational or specialized school.
C0 Service Travel agencies.
Notes:
1 All uses in the C-0 professional and administrative office zone are permitted in the C-1 neighborhood
commercial zone, and all uses in both the C-0 and C-1 zones are permitted in the C-2 regional
commercial zone.
Source: City of Bakersfield; Alfred Gobar Associates
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Bakersfield Gateway Urban Decay Analysis B-1
Appendix B
Key Data Sources
1. Bakersfield City Government - evaluates all proposed and approved
projects within the city. The Planning Department was consulted in order to
identify future significant projects that may affect market potential available for
proposed land uses within the Bakersfield Gateway Center.
2. Kern Council of Governments (KCOG) - is the primary intergovernmental
agency responsible for transportation master planning within the Kern County
region. As a component of the long-term planning mission, KCOG also
prepares long-term outlooks for population growth. This analysis uses the
KCOG growth outlook as one of three alternate estimates of growth
supporting market demand for retail and lodging land use.
3. State Department of Finance (DOF) – serves as the California Governor’s
chief fiscal policy advisor and provides annual population and housing unit
estimates used to evaluate population and housing the growth throughout the
Kern County Region and within area cities.
4. ESRI Business Analyst Online (ESRI) - is a data resource purveyor that
compiles a variety of data from the Bureau of Census, American Community
Survey, Dunn and Bradstreet, and other sources that are synthesized with in-
house programming to identify demographic and business information for
standard geographies (State, County, Census Tract, etc.) and customize
geographies (rings, polygons, etc.). Selected factors evaluated using ESRI
data include population; age, race-ethnicity, education, income, workforce
employment, payroll businesses by industry, payroll workers by industry, etc.
5. U.S. Census Bureau (Census) - is most widely known for conducting the
Decennial Census but also conducts a wide variety periodic and annual
surveys of the national economy and population. This report utilized data
included in the County Business Patterns (CBP) survey, an annual series that
collects and provides sub-national economic data by industry, based on the
North American Industry Classification System (NAICS).
6. U.S. Census Construction Statistics Division - is a division of the U.S.
Census Bureau that records the number and value of building permits issued
within a city or county. Construction statistics data was used in this report to
assess building trends associated with employment and population growth.
7. Employment Development Department (EDD) - is an administrative
department of the State of California that handles the audit and collection of
payroll taxes and employment records for more than 17 million California
workers. Various EDD data sources are used to evaluate trends in
employment affecting overall economic growth of Kern County, including
changes in employment associated with demand for retail and lodging
activities to be hosted within the project. This report also relies on EDD
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Bakersfield Gateway Urban Decay Analysis B-2
employment projections to formulate an alternate projection of population
growth throughout Kern County and within the Bakersfield Metro Area.
8. Bureau of Labor Statistics (BLS) - is the principal fact-finding agency for the
Federal Government in the broad field of labor economics and statistics. The
BLS also calculates yearly consumer price indexes for various consumer
products, which are used to re-tabulate taxable sales data reported by the
California State Board of Equalization into constant (inflation-adjusted) dollar
values used in this report. Finally, the BLS also conducts annual surveys of
household expenditures used to index spending for distinct retail product
groups according to alternate income levels.
9. California State Board of Equalization (SBOE) - provides regular reporting
of taxable sales activity and retail establishment permits generating taxable
sales within all cities and counties throughout California and according to
major store-group activities and selected store-type activities. SBOE reporting
data is used in this report to analyze retail trends including changes in taxable
sales, establishment permits, sales per establishment, sales per capita, and
the inflow and outflow of sales potential for selected areas of the surrounding
region. Special tabulations of SBOE reporting data were also requested and
used to make a detailed evaluation of sales trends describing the City of
Bakersfield between 2001 and 2012.
10. CoStar Group - is a real estate transaction subscription database used to
evaluate commercial property leasing activity, including market-level tracking
of the existing and future supply of industrial, office, and retail facilities. This
report relied on CoStar market-level reporting to identify historic retail floor
space, lease rate, vacancy, and market activity trends including planned
development programs.
11. Urban Land Institute (ULI) - is a nonprofit research and education
organization focused on the responsible use of land resources. The Dollars
and Cents of Shopping Centers was the principal resource from ULI used to
identify floor space, tenant mix, and sales performance indices that
characterize distinct forms of contemporary retail development.
12. Smith Travel Research (STR) - is a travel industry resource agency that
regularly compiles detailed subscription data tracking industry-wide and local
market lodging trends. Subscription data is updated on a monthly basis for
nearly 48,000 lodging facilities throughout the United States. This report
utilized subscription data tracking for selected groups of hotel facilities
competing within the Bakersfield Metro Area to identify overall pricing,
occupancy, and growth trends and potential. STR data was also used to
identify the planned supply of future lodging facilities.
13. California Travel and Tourism Commission (CTTC) – is an agency within
the State Division of Tourism that promotes travel and tourism in the State of
California. One aspect of the CTTC mission is to sponsor industry research,
disseminate research publications, and track travel trends affecting sub-
markets throughout California. This report relies on annual travel impact
estimates prepared by Dean Runyan Associates (on behalf of the CTTC) that
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Bakersfield Gateway Urban Decay Analysis B-3
identifies the county-level economic impact of travel including visitor spending.
This report relies on the economic impact estimate of visitor spending to
describe a basic component of overall economic growth contributing to lodging
demand.
14. Google Earth – is a GIS-based web and subscription service that allows user-
controlled visual navigation of aerial and mapping images for all geographic
areas. This report relied on Google Earth and Google Earth Pro (subscription
grade version) to assist with visual verification of the in-field audit, including
area measurement of selected buildings, time-series photos to estimate time
of construction for selected retail and lodging facilities, and latitude-longitude
coordinates to measure distance from the project site location.
15. Bing Maps – is a web-based map viewer that allows visual navigation of
aerial and mapping images for all geographic areas. This report relied on the
business locator interface to assist in identifying the designated address
location of selected retail and lodging properties, including latitude-longitude
coordinates used to measure distance from the project site location.
To improve reporting continuity between reference sources, 2012 is used as a
baseline benchmark period for taxable sales related data describing the proposed
project, consumer spending, and existing store sales within the relevant trade area.
All retail sales data related to the project and market area prior to the 2012
benchmark period is adjusted to reflect constant dollar (inflation-adjusted) values
based on a selected Consumer Price Indices (different rates for different groups of
retail consumption). Sales performance and impact values used to describe project
phasing and post-project periods of market activity have also been adjusted based on
historical constant dollar rates of growth.
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