Gateway Town Centre - The City of Spruce Grove
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Gateway Town Centre - The City of Spruce Grove

Project ProfileDEVELOPMENT STRATEGISTSGateway Town CentreSpruce Grove, ABPROJECT PROFILEPrepared for:The City of Spruce GroveNovember 2009 FINALPrepared by:MXD Development Strategists, Ltd.www.MXDdevelopment.comGateway Town Centre Project Profile 0

Project ProfilePrefaceMXD Development Strategists Ltd (Vancouver, Canada) wascommissioned by the City of Spruce Grove in May 2009 to conduct aMarket Overview for the Gateway Town Centre site, located on thesoutheast corner of the Hwy 16 (Yellowhead Hwy) and Century Rdintersection. The purpose of this document is to assist the City increating an identity/positioning strategy with the objective of creating acohesive destination and community‐oriented development.A regional examination was carried out in May 2009 in conjunction withinformation provided by the City of Spruce Grove’s PlanningDepartment, Economic Development Office and Finance Department.Additional reference material for this report was provided by, but notlimited to, Commercial Real Estate Brokers, Chamber of Commerce,Environics Analytics and MXD Development Strategists Ltd.The figures presented in the report are based on an evaluation of thecurrent general level of the Canadian, Albertan and Edmontoneconomies, and neither take into account nor make provisions for theeffect of any sharp rise or decline in local or general economicconditions. Forecasts for retail, office, residential demand wereforecast for the benchmark years of 2012 and 2015.Urban Land InstituteMXD Development Strategists Ltd. do not warrant that any estimatescontained within the study will be achieved, but that they have beenprepared conscientiously on the basis of information obtained duringthe course of this Market Overview.Given the nature of the study, MXD Development Strategists Ltd.attempts to render objectively the most probable and realistic forecastsfor retail, office, and residential demand and economic impact. Thisanalysis was conducted by MXD Development Strategists Ltd. as anobjective and independent party; and is not an agent of the City byvirtue of this or any subsequent study to be conducted on this matter.As is customary in an assignment of this type, neither our name nor thematerial submitted may be included in a prospectus, or part of anyprinted material, or used in offerings or representations in connectionwith the sale of securities or participation interest to the public, withoutthe expressed permission of MXD Development Strategists Ltd. or theCity of Spruce Grove.iStockGateway Town Centre Project Profile 1

Project ProfileIntroductionThe purpose of this Project Profile is to specifically highlight thefollowing, as it relates to the Gateway Town Centre opportunity:• Market Overview Rationale• Town Centre Concept Overview• Project Positioning• Market Overview Findings• Economic Benefits SummaryMarket Overview RationaleThe City of Spruce Grove is in the enviable position of currentlyowning 9.88 ha (24.42 ac) of land at the highly visible and easilyaccessible Hwy 16/Yellowhead Hwy & Century Drive Interchange. Inaddition to the land already owned, the City has agreements in placethat could add another 22.36 ha (55.27 ac).Including approximately 3.64 ha (9.00 ac) of land dedicated for roadrights‐of‐way, this could bring the total City land holdings in the areato 35.88 ha (89.69 ac).Discussions have also occurred with Parkland County, which owns anadjacent lot of 5.56 ha (13.74 ac) that could potentially be included inthe Gateway Lands development area.Congress for New UrbanismThe Gateway Town Centre site is part of a strategically located“Special Study Area” within the Pioneer Lands Area Structure Planand represents a significant asset for the City. The City of Spruce ofGrove is looking into the future for a development strategy thatcould enhance and improve the economic and employment base aswell as the social liveability for the residents, businesses and visitorsof Spruce Grove. The City is therefore seeking a developmentstrategy that is: Unique and different from the pattern of development thathas characterized the evolution of the Hwy 16A Corridor; Capable of exploiting the strategic Hwy 16 location, visibilityand access as the “Gateway” to/from the Rockies. Ideally suited to accommodate a mix of land uses in acohesive, compact location that is pedestrian‐friendly andvehicle and transit‐accessible. Compatible with surrounding residential and recreationalland uses (e.g. Jubilee Park); Consistent with the Capital Region’s Integrated GrowthManagement Plan; and Environmentally, socially and economically sustainable.The strategic location of the Gateway Town Centre site will createan opportunity for Spruce Grove to capitalize on the benefits ofbeing located along Hwy 16. At present, the City does not benefitfrom its advantageous location along the well‐traveled Hw 16Corridor. There are very few areas along Hwy 16 that have theability to exploit this kind of opportunity, with interchangeinfrastructure already in place.Utilizing this rare commodity by creating a development that hasthe potential to showcase 2,500 ft of highly visible highway frontagecould create significant economic and social value for the City ofSpruce Grove, its residents and businesses that it may otherwise notreceive.Gateway Town Centre Project Profile 2

Project ProfileAmong the site’s strongest assets are its regional centrality, highwayaccessibility, visibility and linear frontage along Hwy 16, which has anaverage annual daily traffic flow of over 34,000 vehicles per day (vpd).Additionally, the site’s southeast location ensures that the site hasexcellent visibility for travelers, the majority of whom are travellingwestbound on the highway.Since 2004, the average daily traffic counts along Hwy 16A haveaveraged approximately 24,000 vpd, while Hwy 16 has experienced aconsistent increase in traffic volume, whereby the current averagedaily traffic count is in excess of 34,000 vpd. This suggests a shift inthe travel patterns of residents, employees and tourists along Hwy 16compared to Hwy 16A.Another major factor that will have a positive benefit for the GatewayTown Centre is the recent announcement of the twinning of CenturyRd between Hwy 16A and Hwy 16. This local transportationinfrastructure improvement will help reduce the perceived distanceand travel times between the Gateway Town Centre and thecommercial spine along Hwy 16A.In terms of residential development in proximity of the GatewayTown Centre site, Spruce Village, Greystone Point, Hilldowns,Stoneshire, Pointe and the future Vanderbilt Common are allindicative of a strong current and future local trade area, with anincreasing diversity of housing options for young adults and families.There is however very limited retail, office, recreational and leisureoffering in the immediate area, other than the dated Hillside Centreand the Links Golf Course.North American shoppers are increasingly being enticed by newpedestrian‐friendly, multi‐purpose places, such as Lifestyle Centres,Mixed‐ and Multi‐Use Suburban Town Centres. As a consequence,such multi‐purpose, pedestrian‐friendly places are being introducedthroughout the country in a variety of contexts regardless of whetherthey are urban or suburban or warm or cold climates.It is recommended that the Gateway Town Centre be prioritized tobecome such a “place”. This should form part of a wider strategy toconcentrate activity within the area.A Town Centre development would provide a number of solutionsto the challenges faced in Spruce Grove, most notably the lack ofquality spaces for expanding retailers and office businesses.A Mixed‐ and Multi‐Use development would provide a sense ofplace missing in the area. It also would provide a natural “centre”and public gathering place, which would complement and build offof the energy created at Jubilee Park as a community amenity. Sucha multi‐purpose development could include housing and/or officespace, as well as accommodation taking advantage of the HighwayInterchange location.The Gateway Town Centre site represents the single bestdevelopment site (municipally‐owned or otherwise) West of theCity of Edmonton in terms of size, highway location, access andvisibility in which a comprehensive multi‐use developmentstrategy could be pursued.It is the City’s objective to be leader in promoting a developmentconcept that is economically, socially and environmentallysustainable.The Gateway Town Centre site presents a significant opportunityto integrate into one compact and pedestrian‐friendly setting acluster of civic, community, commercial, cultural and recreationaluses, which could facilitate the creation of a true Town Centre thatthe market currently does not have, while at the same time usingits location for potential destination uses.Gateway Town Centre Project Profile 3

Project ProfileSTRENGTHS• Major Highway Interchange location.• On primary tourist corridor to Jasper.• Excellent westbound visibility along Hwy 16.• Average Annual Daily Traffic in excess of 34,000.• Large contiguous, flat development with excellent linear Hwy 16frontage of approximately 750m/2,500 ft.• Only 10 –15 minute drive from West Edmonton region.• Established and easily accessible location within local area.• Adjacent to new and future residential neighbourhoods.• Future twinning of Century Road will increase accessibility tosubject site.• Adjacent to Jubilee Park Recreational and Environmental Amenitycreating a strong activity node and pedestrian and cyclingconnectivity.OPPORTUNITIES• Capitalize on high destination traffic.• Capitalize on future commuter traffic volume.• Capitalize on less traffic congestion compared to Hwy 16A.• Comprehensive site capable of clustering Civic, Cultural,Community and Commerce amenities in one cohesive site.• More affordable multi‐family residential living with reducedcommuting times.• Tap into the significant employment base in excess of 7,000within the Acheson and Spruce Grove Industrial Parks.• Compatibility with sustainability principles through connectivitywith Jubilee Park.Gateway Town Centre Project Profile 4

Project ProfileTown Centre Concept OverviewThe preferred development concept for the Gateway site is aSuburban Town Centre that would provide Spruce Grove with itsmissing functions to better serve the local and regional trade area,but moreover would provide a collective integration of land uses(retail, residential, office, civic and accommodations) that wouldpromote economic, social and environmental sustainabilityconsistent with future growth in the City and the Capital Region.A Town Centre development format is required to provide a bettersense of place in the area, so critical to success in today’s real estatemarket.There is often much discussion focusing around what a Town Centredevelopment actually is or should be. During the 1980s the termTown Centre became overused to such an extent that many of thesingle‐purpose enclosed malls were called Town Centres. Thisevolution led to more confusion as to the ultimate concept of a TownCentre.The following definition, as articulated by the Urban Land Instituteprovides a clear picture of the envisioned program of land uses andamenities that the Gateway Town Centre should include in itscomprehensive development strategy.“A Town Centre is an enduring, walkable, and integrate open‐air,multi‐use development that is organized around a clearlyidentifiable and energized public realm where citizens can gatherand strengthen their community bonds. It is anchored by retail,dining and leisure uses, as well as by vertical or horizontalresidential uses.At least one other type of development is included in a TownCentre, such as office, hospitality, civic and cultural uses. Overtime, a Town Centre should evolve into the densest, most compactand most diverse part of a community with strong connections toits surroundings”.Gateway Town Centre Project Profile 5

Project ProfileThe following components are envisioned for the Gateway TownCentre:• Spruce Grove is an important commercial node for the ParklandCounty Region and one which alleviates many consumers fromhaving to drive into the more congested City of Edmonton.• Future development should build upon the existing critical massand momentum of shopping, dining and entertainment as thebasis of its further development, but development that is nowmore focused on a critical mix and integration of uses as well asconnectivity with Jubilee Park.• Where possible, multi‐family residential uses should beintroduced within the project, particularly on the periphery, toprovide on‐site demand and a more multi‐purpose Town Centresetting.• A range of office uses should also be introduced in smallerfootprints of 3 to 4 storeys, while smaller boutique office space,particularly oriented to local professional services (lawyers,insurance, etc.) could be an important function introducedpotentially above the retail layer (refer to opposite image).• A Hotel accommodation would be an excellent catalyst andaddition to the subject site, which would entice travelers tostop, shop and stay at the Gateway Town Centre, whileproviding a location where industrial uses and train traffic doesnot exist, unlike the areas south of Hwy 16A.Project PositioningThe size and type of development envisioned for the Gateway TownCentre is a regional and community scale multi‐use development thatmakes best use of the excellent highway location capable ofattracting community, regional and destination uses, but within anintimate setting that also plays upon the adjacent public andenvironmental amenity; Jubilee Park. Additionally, the location willfeed off of current and future residential development in SpruceVillage and the Pioneer Lands as it develops over time.• A public gathering space should be integrated into the overalldevelopment plan, which is also connected via a pathwaynetwork to the newest significant community amenity ‐ JubileePark.Gateway Town Centre Project Profile 6

Project ProfileThe Jubilee Park amenity is a major community asset that should beclosely integrated with the development at the Gateway TownCentre. Not only does Jubilee Park represent a recreational amenity,but it also provides an environmental and social amenity that anyadjacent development should respect and capitalize upon.Additionally, the significant employment base within the region’snumerous industrial parks (e.g. Acheson, Spruce Grove Industrial Park)totaling in excess of 7,000 are considered significant target markets forfamily and outdoor recreation amenities.Overall trends in consumer preferences are towards both valueorientedand lifestyle shopping, to the detriment of mid‐market retailwhich characterizes much of the local competitive infrastructure.Additional consumer preference trends include a desire for greaterauthenticity of experience, most notable in the shift of shopping dollarsaway from traditional enclosed malls towards open air mixed‐ andmulti‐use centres. Time‐pressed shoppers are increasingly attractedtowards “one‐stop‐shops” where they can obtain all their shoppinggoods, services and leisure experiences in one place. As such, retaildevelopments which provide a critical mass of branded retail (at bothvalue and lifestyle orientation), local independent “organic” retail, anda broad selection of restaurants and entertainment/leisure, areoutperforming developments with a narrower market positioning.Current retail competition includes a number of large format tenantsand obsolete developments that do not reflect current consumertrends or tenant demands. The retail offering is decidedly lower tomiddle‐market and located in fragmented, automobile‐orientedsettings along the increasingly congested Highway 16A corridor.There is a clear opportunity to provide a contemporary and immersiveretail and leisure environment that would be highly competitivewithin the regional infrastructure. This also includes creating aplatform for potential destination retail tenants.The target market is identified as middle to upper middle‐income,family‐oriented and Empty Nester households that live in the TradeArea, the people living, working or staying on‐site, as well as touriststraveling along the Hwy 16/Yellowhead Hwy Corridor.A number of key market positioning elements that reflect the localmarket characteristics and the current consumer preferences areshown in Figure 1. They demonstrate the key points of difference thatcould distinguish the Gateway Town Centre project and embed it as a“top of mind” destination for regional residents of Spruce Grove, StonyPlain, Parkland County and West Edmonton. These key positioningelements are further highlighted in the visual collages and descriptivenarratives following Figure 1.The recommended positioning strategy fulfills functions that arecurrently missing in the local area. These include tenants, functionsand activities that promote Community Life, Family Life and Civic &Culture. These include family‐friendly amenities (which are currentlyunavailable at competing projects), a public space for activities andinformal social activity and civic functions.Gateway Town Centre Project Profile 7

Project ProfileFigure 1Project PositioningGateway Town Centre Project Profile 8

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Project ProfileRegional DestinationDestination retail is defined as any tenant which causes people to drivelong distances (20 minutes+) to visit a retail centre. This typicallyincludes “anchor” tenants such as department stores and other largeformat stores which typically define the trade area and customer basefor the project’s smaller stores.Anchor stores typically do not pay high rents compared to smaller inlinestores and will typically seek the highest visibility sites with ample roomfor vehicle parking (because of their regional draw). Accommodatingdestination tenants is usually a significant economic necessity becauseof co‐tenancy requirements of top retailers.Accommodating destination retailers within a pedestrian‐orienteddevelopment can be a challenge. The two models with proven successare either separating the box stores from Main Street by a parkingsurface or backing the boxes against the Main Street. An example ofthis type of development will be the Currents of Windermere inSouthwest Edmonton. The first method is the most straightforwardand leasable but does reduce the overall development density andwalkability.Destination retail can also include new‐to‐market retailers or one‐of‐akindretailers that may be of boutique size. An excellent restaurant(either a local or national chain) will have an identical positive influenceon the development’s regional draw.Some destination retailers can attract on average 4 million visitors totheir stores and are capable of drawing patronage from up to a threehour drive time. As a point of comparison a well performing regionalenclosed mall typically attracts on average 8 to 10 million annualvisitors.The regional destination appeal of the Gateway Town Center will alsobe further enhanced by the presence of a business hotel which couldhelp in attracting other compatible destination tenants/uses. A hotelwould not only fulfill a regional destination purpose, but also arecreational and leisure purpose.Gateway Town Centre Project Profile 11

Project ProfileCommunity LifeIt will be important to differentiate the Gateway Town Centre from thecompetition by emphasizing its role as a centre for community life. TheTown Centre concept provides the best vehicle to introduce communityelements within a retail project, and allow for civic uses to be blendedinto the overall retail offering.The plan to include residential and office around the retail, as well aspotentially above it (to a lesser degree) would play a large role increating the sense of community.Similarly, an excellent public space is also key in creating thecommunity element that attracts repeat patronage. It provides astaging ground for a number of community‐oriented events that embeda project as the community’s “Downtown”. The trend is towardssmaller, more intimate public spaces surrounded by restaurants withplentiful outdoor seating.A sense of community life is present in a Town Centre designed forpedestrians but able to accommodate automobiles. Successful projectsprovide ample parking within close proximity to stores, but they breakup the “sea of parking” views with the strategic placement of buildingswithin the parking fields.Community should be reflected by Neighborhood and Community‐scaleretail components. This would provide the Convenience retail goodsand services required by the local area and allow for a number of localretailers to have a presence at the development.Gateway Town Centre Project Profile 12

Project ProfileFamily LifeGiven the Trade Area demographics, it will be essential to position theGateway Town Centre to attract repeat patronage from local families.In addition to a family‐oriented retail tenant mix, additional non‐retailuses such as a secure child‐minding facility or a kids play area(overlooked by a café for parents to relax in) are also recommended forthe project.Such family‐friendly amenities extend the average shopping trip to thedevelopment resulting in higher sales. They also serve to differentiatethe project from local competitors, most of which do not reflect theneeds of local area families.An additional means of catering to the local family market is to providea “one‐stop‐shop” for time‐pressured households. Today's typicalparent is enamored with the idea of one‐stop shopping. This isespecially true for women who are working as well as maintaining ahome. This consumer who has little time to run from centre to centre.By providing all the goods, services and amenities that a familyhousehold requires in a single retail centre and designing such thatvisiting several stores on the same trip is quick and easy, the projectwill garner wider appeal from this Trade Area.Programmed events targeted at local families, such as Easter egg hunts,Christmas tree lighting and kids music festivals all serve to generateregular patronage. In addition, amenities such as pop‐jet fountains haveproven to be help distinguish retail centres from their competitors andgenerate significant regional traffic.Finally, the Gateway Town Centre can be positioned to attract the localfamily market by providing a number of anchor attractions that appealto children and their parents.Gateway Town Centre Project Profile 13

Project ProfileCivic & CultureOne of the primary economic engines for the Gateway Town Centre sitecould be the introduction of civic and cultural amenities.By collectively weaving well‐utilized public assets into the project area,the site could gain instant recognition as the official heart of thecommunity; a component which the community currently lacks.In communities where these uses are clustered together in a mixedandmulti‐use pedestrian‐scale environment, the impact is significant inbringing the community together, but moreover in creating reciprocalbenefits for retail, office, residential and accommodations.In many of the new Town Centre or Mixed‐Use Urban Village concepts,the role of civic uses and cultural components often become the iconicfocal points for constant programming throughout the year both forpublic events (e.g. New Years, Christmas etc) and semi‐private events(e.g. Graduation Ceremonies, Weddings etc).Civic and Cultural components are seen as important initial catalysts forthe Gateway Town Centre.City Hall, Celebration, FloridaAnother civic type of use that is increasingly gaining prominence inTown Centre environments are academic institutions such as satellitecampuses, language schools or distance education. In the context ofSpruce Grove where no post secondary institutions exist, this could bean opportunity to attract a satellite campus of the UofA or NAIT forspecialized academic training (e.g. Bio‐Tech, Agri‐Tech, Petro‐Tech etc).Gateway Town Centre Project Profile 14

Project ProfileRecreation & LeisureOne of the most important market positioning elements is recreation.This term applies most often to entertainment uses. Recreation usesare migrating to Town Centres as these settings themselves are offeringa more entertaining and authentic environment.Recreation and leisure components, spawn significant patronage torestaurants, as well as certain forms of retail. Bookstores and impulseorientedstores whose merchandise appeals to the customer’s sense offun.Other forms of recreational entertainment include activities such asclimbing walls, indoor soccer and gymnastics facilities, which wereamong a variety of potential leisure and recreational uses identified inthe recent Spruce Grove Recreation and Culture Indoor FacilityStrategy.Beyond simply cinemas and family entertainment centres, recreationalso includes mature adult nightlife uses such as brew pubs, sports bars,night clubs and live music venues, as well as regular events like Moviesin the Park and Music Festivals.Unlike enclosed malls and power centres, an unenclosed town centreenvironment can be a viable destination for adults in search of a nightout. They can thus provide an important anchor function to attractpatronage to the development during typically off peak hours.Another critical component to Recreation & Leisure is in the form ofhotel accommodations and associated banquet/conference/meetingspace. For regional recreation/sporting events and for the widerbusiness community (e.g. Industrial Parks), the ability to provideaccommodations and leisure amenities as part of a hotel on‐site can actas a catalyst in retaining expenditure within the community and instimulating job creation.Gateway Town Centre Project Profile 15

Project ProfileHealth & WellnessOne of the fastest growing segments of the retail industry is Health &Wellness. This phenomena has been largely driven by the aging BabyBoomer segment. Baby Boomers typically have most things they need,so their spending is increasingly discretionary and focused onrecreation, travel, entertainment, self‐improvement, health, hobbiesand other self‐indulgent pursuits.A number of operators are emerging to capitalize upon this trend. Dayspas are now a common anchoring element to retail developments,particularly in Town Centre and Resort projects. Spas enhance aproject’s drawing power and help to attract an upscale clientele.Several new innovative operators are promoting a medical‐basedfitness program where sports medicine is merged directly with fitnessfacilities to promote preventative health care. They will include ancillaryservices such as food & beverage and logo merchandise shop. Thisconcept is often sold to new residents within a town centredevelopment (following a complementary year with every homepurchase).Health and Wellness facilities are no different than other forms of retailconcept in that ample parking and excellent visibility are of paramountimportance to them. However, they do tend to draw people at differentparts of the day/week than mainstream retail. For example, seniorstend to be the major daytime user on weekdays, with office workers atlunch and after work, with on‐site residents in the evening.Fitness facilities facilitate leasing of office and residential space. Inaddition, a number of boutique hotel concepts are emerging that arebuilt around the spa experience. Such a concept would be well suited tothe project vision.Gateway Town Centre Project Profile 16

Project ProfileOpen‐Air Town Centre VillageThe resurgent trend towards main street retail and open‐air retail hascreated numerous opportunities for development formats. Recently,the Mixed‐ and Multi‐Use Town Centre or Urban Village concept hasbecome most dominant in which residential and office functions areblended into the project design and layout.Though a common concern voiced over open‐air projects is theclimate concerns, one need only look at the existing retail in the Cityof Spruce Grove to realize that the current retail inventory is over 90%outside (i.e. open‐air). In fact, a more compact Town Centre format isfar more conducive to creating a pedestrian and climate‐friendlyenvironment, regardless of the climate (refer to lower image).The tenant mix in a Town Centre can often vary from Community scaleto Regional. However, in both scenarios the overall ambience andtenant mix evokes a “Lifestyle” feel. Lifestyle differences mean peopleof the same age and income do not necessarily opt for the same goodsor services. People tend to choose one product over another becausethe values of one reflects their own identity. Lifestyle retailingrepresents “the good life” that many slightly more affluent andeducated people aspire to, in which interior décor, gardening, fashion,food, kitchen accessories, books, learning and travel all play apart.Given the lower cost of living in Spruce Grove combined with healthyincomes, this “lifestyle” component could have some merit.Lifestyle does not necessarily mean luxury brands or national tenantsbut can still include a strong local or regional tenant representation. Infact, it is important to have the right mix that provides the uniquenessfor the project. In this regard, restaurants play a pivotal role in anopen‐air Town Centre.Programmed events such as cooking classes, exotic car shows, wine andcheese nights and other activities also play an important role incontributing a Lifestyle element to a Town Centre project’s marketpositioning.Gateway Town Centre Project Profile 17

Project ProfileMarket Overview FindingsA Market Overview was undertaken to identify and quantify the variouspotential markets for retail, office and multi‐family residential at theGateway Town Centre. The findings provide a foundation for anysubsequent future Land Use Allocation Analysis for the Gateway TownCentre.A Trade Area was delineated for the Gateway Town Centre. This regionincludes the City of Spruce Grove (PTA Core), Stony Plain (PTA Non‐Core) and the rest of Parkland County and parts of the West Edmontonarea west of Anthony Henday (Secondary Trade Area).Approximately 300,000 people currently reside within the entire TradeArea. This is stable market, within which the PTA Core and PTA Non‐Core are forecast to increase at over 3% per annum over the period2007 to 2017. By comparison, the City of Edmonton is forecast toincrease at just under 1.0% per annum over this same time frame(0.8%). However, the number of households is growing at a quickerpace of due to an aging population base and a corresponding increasein the demand for multi‐family housing.The Trade Area’s average household income (year end estimate 2007)for the Primary Trade area is above the City of Edmonton and Albertaaverage (PTA $92,000 vs Edmonton $85,362 and Alberta $89,629).Combined with a lower cost of living, the disposable income is alsohigher. Given this higher level of disposable income, and the heavilyvalue‐oriented nature of retailing along Hwy 16A (In Spruce Grove &Stony Plain), the lack of retailing positioned above value‐oriented isnotable.Even though the amount of warranted floorspace is identified as250,000 sf by 2012, the market demand and required captures donot negate the ability to consider a phased development strategywhere not all the 250,000 sf is developed in 2012, but rather over theperiod 2012 to 2015.The Office Overview reveals that that approximately 21,564 sf ofoffice space is absorbed annually in the Spruce Grove/StonyPlain/Parkland County market, and that 7,500 sf of this total could bedeveloped at the Gateway Town Centre annually or cumulatively25,000 sf by 2012 and an additional 25,000 by 2015. Both of theseamounts could be developed as freestanding buildings or acombination thereof with retail and services on the ground floor.The favourable site attributes of the Gateway Town Centre incombination with a collection of other compatible on‐site andadjacent land uses (e.g. Jubilee Park) could create a high amenitylocation for local and regional office tenants.Office Format ExampleThe Gateway Town Centre has access to a $3.2 billion retail market(2008), that is growing at approximately 2.2% per annum as a result ofincreases in households and per capita income. By 2015, approximately$3.7 billion will be spent on shopping, dining and entertainment byTrade Area residents.The Retail Overview indicates that by 2012, an estimated 212,000 sf ofnew retail space could be generated by new population growth. Whencombined with the current residual demand of approximately 40,000 sf,the optimal target GLA for the Gateway Town Centre, for the year 2012is estimated to be in the range of 250,000 sf.Gateway Town Centre Project Profile 18

Project ProfileA Market Overview for Hotel/Motel revealed sufficient demand towarrant a 125‐room business hotel at the Gateway Town Centre. Inaddition to the rooms, the Hotel would also be envisioned to haveconference/banquet/meeting space to accommodate in the order of500 persons. This type of hotel format could appeal to transientworkers and oil sector/industrial professionals as well as highwaytravelers destined to the Jasper recreational areas. Moreover, as isoften the case, a well situated hotel, such as along the Hwy 16Corridor could stimulate further interest for additional hotelproperties as well as restaurants and entertainment uses.The Residential overview suggests that by 2012 approximately 76multi‐family residential units could be introduced at the GatewayTown Centre with an additional 76 units in 2015.Row Housing ExampleBoth residential segments value access to nature, health care andamenities such as coffee shops, fitness facilities and grocery stores.This group increasingly has driven sales at mixed‐ and multi‐useprojects built above retail or on the periphery in a pedestrian‐friendlyvillage‐type setting. Such a development at the Gateway TownCentre site could position itself at the heart of the consumermarket, complemented by community, cultural, civic andcommercial amenities and services.A multi‐use Town Centre at the strategically located Gateway sitewould serve to differentiate the retail project from local and regionalcompetition, which is characterized largely by Strip Centres andPower Centres. It would also provide opportunities for place‐makingelements (such as a town plaza, civic uses and integration withresidential and office uses). Such a development would bepositioned to provide the necessary mix of uses and amenitiesconsistent with regional goals for environmental, economic andsocial sustainability.Also, the Residential overview points to two key markets to pursue: Thefirst is the “Lock & Leave” crowd of retirees and semi‐retirees, who areincreasingly turning to the convenience of condo living, a housingformat that frees them to travel. This target market frequently has asecond condo in a Sunbelt state. The second group is the “LocalDownsizer” market, who are also older, but not as affluent as the Lock& Leave set. This second group also is seeking the convenience ofcondo living but for the entire year.Gateway Town Centre Project Profile 19

Project ProfileMarket Overview SummaryA Market Overview of the location, supply and expenditureconditions for each of the potential retail, office and residential landuses at the Gateway Town Centre site, revealed the following:• Retail demand is expected to grow at an average annualincrease of 53,000 sf per year.• By 2012 approximately 212,000 sf of new retail could beabsorbed or 430,000 by 2015.• The recommended retail mix is considered achievable if aSuburban Town Centre format is introduced at the strategicallylocatedGateway site.• Office space is recommended for approximately 25,000 sf by2012, followed by an additional 25,000 by 2015.• For‐sale multifamily residential demand is estimated atapproximately 76 new units by 2012 and 151 by 2015.The City owns or has agreements in place to own up to 35.89 ha(88.69 ac), plus a potential opportunity to acquire another 5.56 ha(13.74 ac) owned by Parkland County. Therefore, there is more thanenough land available to develop the site and have residual landsavailable to sell or retain for future potential economic developmentinitiatives or non market‐driven opportunities, should they presentthemselves.Surplus land should be viewed as an asset for potential destinationtenants and in controlling the form of development consistent andcompatible with the City’s objectives for sustainable growth as part ofthe Pioneer Lands ASP.Gateway Town Centre Project Profile 20

Project ProfileEconomic Benefits SummaryThe Gateway Town Centre is envisioned to be an integral part of theCapital Region’s and Spruce Grove’s growth strategy in creating acompact location premised on the principles of Smart Growth,wherein jobs, residents and visitors can be located thereby enhancingthe value of Spruce Grove in economic, social and environmentalterms.For the purposes of this Economic Impact Assessment, the GatewayTown Centre is defined as comprising the following land usecomponents and phasing schedule:Phase 1: Year 2012Retail:Office:Hotel:Residential:150,000 sf25,000 sf125 rooms76 Multi‐Family Townhomes/Row HousingPhase 2: Year 2015Retail: 100,000 sf (for a cumulative total of 250,000 sf)Office: 25,000 sf (for a cumulative total of 50,000 sf)Hotel: 0 Rooms (for a cumulative total of 125 rooms)Residential: 76 Multi‐Family Units (for a cumulative total of152 units)Smart Growth as an Economic BenefitAlthough Economic Impacts are most frequently viewed with a dollarperspective, it is also important to recognize the environmental andsocial benefits that are not as easily quantified. Accordingly, theGateway Town Centre proposes to be a model of Smart Growthwhose environmental benefits should also be considered.Instead of focusing solely on short term development goals, there hasbeen a paradigm shift in development patterns and practices over thepast few decades that minimizes the environmental footprint of adevelopment.Smart Growth avoids urban sprawl, while advocating for compact,transit‐oriented, neighbourhoods that feature multi‐ and mixed‐usedevelopments. The priority shifts away from auto‐dependency, andtries to create a balance between vehicles, pedestrian connectivityand mobility, and bike friendly pathways.The Gateway Town Centre proposes to be a model of Smart Growth inits design, layout, configuration, multiplicity of uses, connectivity tosurrounding amenities and walkability.Compact communities where people can live, work, shop, play andstay are more location‐efficient. They require less time, money, fueland greenhouse gas emissions for residents to meet their everydayneeds.Capital Region Integrated Growth Management PlanAn important influence on the Gateway Town Centre’s developmentstrategy and resulting economic impact is the role of Spruce Grove inthe Capital Region’s Integrated Growth Management Plan (CRIGMP).Alberta’s Capital Region (Edmonton) is a significant economic regionwithin Canada and it is the northern hub of the powerful Edmonton –Calgary corridor. Over the past few years, this corridor has achievedone of the strongest GDP (Gross Domestic Product) and populationincreases in North America.The region has enormous economic potential and is attractinginvestment from every corner of the globe. A special TD Economicsreport recognized this fact over four years ago. One of the report’s keyrecommendations to take advantage of this economic opportunitywas to, “Continue to improve cooperation with other municipalities inthe region, recognizing the handsome economic returns to effectiveregion‐wide coordination and planning”.The Capital Region is increasingly becoming recognized as a NorthAmerican hub for the energy industry which will drive the region’sgrowth for decades to come. However, the region has a diverse arrayof economic opportunities in other areas including transportation andlogistics, advanced manufacturing, agri‐food, forest products, andhealth care‐related products.Gateway Town Centre Project Profile 21

Project ProfileThere is no certainty about where and when growth will occur or howmuch of the anticipated growth in the Capital Region will actually takeplace. A number of factors affect decisions made by developers,industry and governments and those decisions can affect the timing ofnew projects as well as whether or not they proceed as planned.Regardless of that uncertainty, it is critical for municipalities in theregion, such as Spruce Grove to anticipate the most likely growthscenarios and plan accordingly, with developments such as thatenvisioned for the Gateway Town Centre site.For this reason, the Gateway Town Centre is envisioned to be anintegral part of the regional growth strategy in creating a compactlocation premised on the principles of Smart Growth, wherein jobs,residents and visitors can be located thereby enhancing the value ofSpruce Grove in economic, social and environmental terms.Gateway to the North and the Asia/Pacific CorridorAs a central hub, supplier, and staging area for many communities andindustries operating in northern Canada, the Capital Region is expectedto see continued economic activity to support growth in the north.Infrastructure improvements to principal road and rail connections,and in the Vancouver and Prince Rupert corridors, and the ensuingport expansions, are expected to increase export capacity and providea more efficient and reliable transportation system that will result inincreased trade between the Capital Region and the Asia/Pacificregion.Anticipated economic growth throughout the regionWhile it is more difficult to quantify economic growth throughout theregion, forecasts point to continued strong growth in many parts ofthe Capital Region. The value of major industrial and commercialprojects planned for the Capital Region outside of the IndustrialHeartland and Port Alberta is estimated at $5 billion.Total Construction Economic ImpactThe initial stage of the Economic Impact Assessment involvedestimating the impact of new construction for each of the four projectcomponents.The Total Gateway Town Centre construction costs (Hard & Soft Costsonly) for the 2012 to 2015 period are estimated to be in the range of$123 Million. It is important to note that the construction impactsidentified represent a TOTAL impact as of 2015, assuming full buildoutof the development program articulated previously.This construction cost serves as the basis to which the multipliers areapplied to derive the indirect and induced economic impact on theregion as summarized in the following:• The Direct Impact of Construction could generate 738 jobs (28%of total) resulting in $45.8 Million in Employment Income.• The Indirect Impact of Construction could stimulate anadditional 738 jobs (28% of total) and $22.4 Million inEmployment Income.• The Induced Impact of Construction could result in a further1,194 jobs in the region (44% of total), resulting in $46.2 Millionin Employment Income.• Total GDP at basic prices for the total project are estimated togrow by $122.9 Million.• The Total Gross Output on the regional economy is forecast tobe $281.9Million.• Total Employment generated by construction is estimated to bein the range of 2,671, stimulating total income in the magnitudeof $114.5 Million.Gateway Town Centre Project Profile 22

Project ProfileTotal Post Construction Development Economic ImpactAfter an examination of the economic impacts resulting from thepotential construction of the Gateway Town Centre, the subsequentstages evaluate the total economic impact that could ensue as theproject is phased in and in operation.From the assessment of the Construction and Post‐Construction stagesof the Gateway Town Centre development for the Retail, Office, Hoteland Multi‐Family Residential components, the following findings aresummarized:• The entire project is estimated to provide $134.7 million in thetotal value of new construction including hard costs, soft costs,land costs, as well as on‐site and off‐site infrastructure costs.• The estimated added value to the existing real estate base isestimated at $188.3 million.• An additional annual outlay to support the development (interms of maintenance costs, administration, etc.) is estimated at$1.6 million.• It is estimated that 881 people will work in the development atfull buildout at an average salary of $41,622 per year, generatingan annual payroll impact of $36.7 million.It is important to note that the post construction impacts identifiedrepresent a TOTAL impact as of 2015, assuming full buildout of thedevelopment program articulated previously.Specific economic benefits for the Gateway Town Centre pertaining toProperty Tax Revenue, Employment and On‐Site Visitors/Guests etc.are highlighted on the following page.Gateway Town Centre Project Profile 23

Project ProfileReal Estate Property Tax Revenue is estimatedat $2.25 million a year at full buildout (2015).$1,164,522Office200Hotel307Residential274$1,200,000$1,000,000$800,000$554,064$600,000$400,000$200,000$-$174,529$357,145Retail Office Hotel ResidentialThe total Direct, Indirect and Inducedemployment impact of construction and postconstruction(i.e. operations for Retail, Officeand Hotel) is estimated to be approximately4,269 jobs.Retail794EmployeesThe Gateway Town Centre project is forecast togenerate potentially 9,500 daily Employees,Visitors (retail patrons, hotel guests) andResidents.The retail component of the Gateway TownCentre could generate an estimated 3.0 millionannual patrons.Office624EmployeesRetail8,775Construction2,670EmployeesHotel181EmployeesGateway Town Centre Project Profile 24

Project Profile®DEVELOPMENT STRATEGISTS LTD2009Gateway Town Centre Project Profile 25

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