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MainPlace Mall <br />Not Fiscal Impact end Economic Analysis <br />December 2018 <br />Page 4 of 33 <br />1.0 Executive Summary <br />Santa Ana has achieved relative economic success compared to many other California cities, <br />with the local unemployment rate (4.5%) below the state averages. Reflective of its strong <br />economic character, Santa Ana is the corporate headquarters for several major companies <br />including: Behr Paint, First American Corporation, Greenwood & Hall, Ingram Micro, and STEC. <br />It also houses regional headquarters for Xerox, T-Mobile, and Ultimate Software. <br />Despite its current strength, economic growth in the region has been sluggish over the past <br />decade. It was not until 2016 that taxable sales ($4.1 billion) within the City surpassed 2008 pre - <br />recession level of $3.9 billion. <br />Santa Ana's future faces significant economic challenges, as the digital economy converts the <br />lifestyles and social patterns of society. Today's consumers Increasingly utilize online websites <br />for the purchasing of clothes, shoes, and other soft goods that Impact major department stores, <br />As this competition increases, retail chains continue to withdraw from traditional retail spaces; <br />impacting even the most vibrant of communities and retail centers. The result of these forces is <br />the need for the public and private sector to rethink traditional approaches to retail land uses. <br />The Millennial generation, with their Increased use of media and digital communication, no <br />longer seek collections of retail stores. Instead, young consumers Increasingly desire gathering <br />places with stores, restaurants and entertainment venues. Millennials are not the only segment <br />of the population with such desires. According to many economic theorists, the creative class of <br />professionals (artists, designers, scientists, musicians, and programmers) represent another key <br />force in this economic development. This dynamic workforce Is attracted to communities with <br />urban environments and clustered centers, which provide a sense of vitality, diversity, <br />convenience as well as a balanced mix of work, entertainment, services, art and culture. <br />Taking stock of these trends, it is apparent that today's economic forces demand approaches to <br />land use and development that involve a diversification of uses and densities, as well as <br />concepts for public amenities and private attractions that help cities capture consumer trips and <br />thus "sales" sufficient to retain vibrant commercial districts. <br />MainPlace <br />Built in 1987, MainPlace recently lost its major anchor tenant, Nordstrom's and is facing <br />significant competitive challenges to remain a viable regional mall for the economic benefit of <br />the City of Santa Ana. Although the mall is generating over $2 million in annual sales taxes <br />based on City's 1% share, 12-month average annual retail sales are down over 20% as a result <br />of Nordstrom closure. Interestingly, the Macy's store saw no uptick In sales following Nordstrom <br />departure. <br />The analyses, projections, assumptions, and any examples presented herein are for <br />illustrative purposes and are not a guarantee of actual and/or future results. Tax analyses <br />kosnto,,,,. are projections only. Actual results may differ from those expressed in this analysis. <br />75D-539 <br />