The Manhattan City Commission received another report Tuesday night. The Community Market Strategy is to help the City and business community. The Editorial at the bottom of this page has concerns about the report. Here is the executive summary:

EXECUTIVE SUMMARY

Inputs to the real estate market forecasts provided here for use in the City’s comprehensive planning process include employment, population, and average household income. As each of these measures of economic activity grow, demand for manufacturing/distribution, motel/convention center, office space, and retail floor space warranted will increase. The supply of developable land and land ownership pattern constraints limit the number of competitive sites to accommodate these uses in the future.

MANUFACTURING/DISTRIBUTION

Demand for manufacturing land is primarily for those uses which support non-basic industries whose products are consumed locally such as the construction industry and for testing and production of basic industry products such as those generated by KSU-related research which are mostly exported outside the community. Manhattan does not have a significant heavy industry or "metal bending" labor force pool. Build-out of the Manhattan Industrial Park, population growth, and future prospects for knowledge-based industries require increasing the supply of industrial parks. They should be distinguished from each other by their real estate development standards. The potential for a large land consuming industry to "drop in" to Manhattan continues.

Distribution is mostly to rather than from Manhattan. The lack of large developable sites, of support industries, and of interstate highway system exposure reduces Manhattan’s competitiveness for warehouse/distribution uses.

MOTEL/CONFERENCE CENTER

Manhattan is a third tier conference/convention market. Its supply of motel sleeping rooms has a narrow range of price points, is geographically disaggregated, is aging, and is partially constrained by the lack of large flat floor meeting space. The supply of meeting room floor space is concentrated in two private and two KSU properties. At all four locations the single room flat floor space is limited and their meeting spaces are fragmented among several rooms, characteristics which reduce the number of conferences/conventions for which the City can effectively compete.

A questionnaire survey was conducted soliciting interest in holding future meetings of Kansas associations and organizations in Manhattan. Larger meeting rooms and more entertainment retail (movie and live theaters and eating and drinking establishments) opportunities would help increase demand for such meetings in Manhattan. Because of the solid but limited increase in total demand, the risk to a private developer of building a full-service conference/convention motel or a free-standing meeting building is great. Proceeding with either project requires a public-private partnership to reduce the financial risk. Economic growth will support demand for two to four new motels, depending on their size, assuming existing properties continue to serve the market.

OFFICE SPACE

Growth of general tenant office space has been modest, resulting in construction of scattered small (less than 20,000 square feet) buildings. Demand for office space will grow with the economy, especially if health services employment trends continue. The professional services portion of the market will be attracted to the general locations of higher income neighborhoods whose residents purchase most of these services. A portion of this demand will be accommodated in retail centers.

RETAIL SPACE

Manhattan’s primary retail market area is composed of Geary, Pottawatomie, and Riley Counties and the secondary market area includes the nine surrounding counties. Town Center Mall, located in Downtown Manhattan, is the market area’s epic center. It has three anchors which are also found in the Salina and Topeka markets. Sales leakage is attracted to Topeka’s Wannamaker Road corridor, and, to a lesser extent to Kansas City, indicating the Manhattan market is slightly understored.

The primary market area has achieved three times the retail sales growth of the secondary market area in recent years, in constant dollars. The City captured most of the primary market area’s retail sales in 2000. Although Manhattan is not a two store market for retail anchors, it is a growing economy that is attractive to those anchors and to upscale and popularly priced retailers not already located in the market. Retailers already in Manhattan are poised to capture a portion of the retail sales growth. Because of the automobile traffic generateed by retailers, locations for new stores having good highway access are important to their success.

DEVELOPMENT PROGRAM

The following building forecasts will be translated into land requirements meeting the City’s development permission standards and preferred locations as a part of the comprehensive planning process.

STRATEGIC IMPLICATIONS

A combination of urban renewal and greenfields development strategies will be required to accommodate the forecasted development. It is recommended that implementation of these projects take into account the following factors:

• Protect the private and public sunk investments in existing projects.

• Utilize in-place infrastructure capacities.

• Eliminate some dilapidated structures.

• Provide business and industrial parks having a variety of land planning and building standards.

• Increase the critical mass of consumer choices thereby increasing market sector penetration by clustering retail floor space and motel sleeping rooms.

• Increase the multi-family housing supply in the vicinity of large office and retail projects having mixed use potential.

The comprehensive plan should allocate two to three times the land required for the real estate-driven demand for land to lessen land price increases and provide location choices to developers.

Timing is of utmost importance to a successful growth accommodation strategy. As real estate development issues arise, the City should be prepared to respond to them. In the meantime, the City should initiate:

• Plans for site acquisition and/or improvements for retail and manufacturing uses which have the greatest short-term growth potential.

• Building standards enforcement of vacant dilapidated structures, particularly in redevelopment areas designated by the 2002 comprehensive plan.

• Prepare and distribute promotional materials to recommended chain retailers and follow-up with personal contacts.

• Review existing regulations and possibly provide permission for additional mixed use projects incorporating multi-family housing units.

• Program capital improvements to accommodate growth and development in areas recommended by the 2002 comprehensive plan.

These priorities should be periodically reviewed as changes in the City’s economy occur.