Item 27 - Appeal Application Nos. 2020-03 and 2020-04 - Central Pointe Mixed-Use Development

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Figure 1: Retail Vacancy Retail Vacancy for 3-Mile Radius and Orange County 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 -3-Mile Radius Orange County Source: Costar There are three other mixed -use residential and retail projects in the development pipeline with program retail ranging from 6,000 to 24,290 square feet contributing 1.4 percent to 3.5 percent of total Gross Building Area (GBA). The Project's 15,200 square feet of retail space represents approximately 2.6 percent of GBA, which falls within the range of both pipeline projects and similar projects under development within a half mile of the Project's site, as shown in Table 1. Table 1: Mixed Use Projects Comparison of Mixed -Use Projects Under Development within Half -Mile of the Project Project Name Project Adress Dwelling Units Total GBA (SF) Retail Space (SF) %Retail Madison 200 N Cabrillo Park Dr. 260 186,000 6,500 3.5% AMG First Point 2112 & 2116 E. First St. 552 700,000 10,000 1.4% Elan 1600 E. First St. 603 650,000 20,000 3.1 % Project 4th and Cabrillo 644 576,000 15,200 2.6% Source: Costar, City of Santa Ana, AECOM Retail leakage/surplus analysis offers another perspective on retail potential. Leakage/surplus analysis compares estimated potential retail spending with estimated actual retail spending to determine whether there is a variance. A surplus variance, where estimated retail spending exceeds estimated demand, indicates the area is drawing retail spending from outside its boundaries, whereas a deficit variance suggests retail "leakage" where residents are leaving the area for retail spending. Leakage can indicate an undersupply of retail space and a potential opportunity for retail development (although not always: if substantial retail supply exists just outside of the boundaries of an area showing leakage, then new supply within the area risks oversupplying the market and diluting sales). AECOM conducted a retail leakage/surplus analysis for both the City of Santa Ana and the 2-Mile Radius2 around the site and found that both geographies capture a significant surplus of retail spending. While the surplus is a net benefit to the City, which benefits from the resulting sales taxes, it also suggests the area is already well supplied and may not have capacity to absorb much more. While the new on -site residential population will help absorb some of this demand, the proposed retail also needs to be unique and differentiated enough to continue to draw shoppers from outside the area to avoid diluting the performance of existing retail supply. Table 2 shows that the 2-Mile Radius has a 2 AECOM uses standard geographies for retail demand assessment, typically a half mile and 2-mile radius around the site that represent the immediate opportunities for pedestrian traffic and a short car ride respectively.