Commission Passes Market Study

The Manhattan City Commission approved another study Tuesday night but it will only cost $79,400. And this study will come back to the Commission.

This is a Community Market Analysis, which will focus on retail, office, hotel-convention and industrial sectors.

Some feel it will be used to show the City Commission why Manhattan needs one type of business and not another.

If it is anything like the Housing Study, it is flawed before they start. Mayor Snead uses the Housing Study like a whip. "We need to send money on this becaue the Housing Study said we needed it." It is used over and over. That study said we needed 3,000 new housing units in Manhattan. That is the same number of units between Third Street and Seventeenth Street, Fort Riley Blvd. and the hills to the north. Flawed!

Here is a memo given to the Commissioners:

BACKGROUND

In February 2001, the City Commission received a letter (see attached) from the Manhattan Area Chamber of Commerce, the Eastside Business Association, Manhattan Main Street, the Aggieville Business Association, the Westside Business Association and the Westloop Merchantsí Association. The letter requested the City take the lead to contract a professional consulting firm to complete a community-wide market analysis.

Based on this request, the City Commission instructed the City Administration to develop a Request for Qualifications at the March 20, 2001 meeting. It was locally advertised and mailed to select, consulting firms, which had an interest and the capacity to complete the required analysis.

The Request for Qualifications envisioned that the analysis would develop a community market strategy for Manhattan, primarily focused on the retail, office, hotel-convention, and industrial sectors, utilizing trade area analysis, reviewing the existing business climate in Manhattan, and estimating market potential for these various sectors.

On May 1, 2001, the City Commission appointed a selection committee to review responses to the Request for Qualifications. The selection committee consisted of Mayor Bruce Snead; Commissioner Ed Klimek; Larry Williams, Chair of Chamber Retail Committee representing the Manhattan Area Chamber of Commerce; Cheryl Sieben of the Aggieville Business Association representing the business associations; Gwyn Riffel, member of the Manhattan Urban Area Planning Board and citizen-at-large; David Tuley, representing the Pottawatomtie County Commission; Monty Wedel, representing the Riley County Commission; Ron R. Fehr, City Manager; Ockert Fourie, Senior Planner; and Jason Hilgers, Redevelopment Coordinator.

Two proposals were received as a result of the request. Economics Research Associates (ERA) of Chicago, Illinois and Hammer, Siler, George Associates of Silver Spring, Maryland submitted proposals. The selection committee interviewed both firms on May 16, 2001.

After a thorough review of the proposals and interview of both firms, the selection committee recommended that the City Commission authorize City Administration to negotiate a scope of services and contract with Hammer, Siler, George Associates (HSGA). HSGA demonstrated a wealth of experience and knowledge in their formal presentation. They had relevant experience in several Big XII cities and several other University communities across the nation. Their previous in-state experience includes Lawrence, Wichita, Hays, and Topeka.

On June 5, 2001, the City Commission authorized City Administration to negotiate a scope of services for a community market analysis with Hammer, Siler, George Associates of Silver Spring, Maryland.

DISCUSSION

City Administration has met with HSGA via conference call several times throughout the months of June and July to develop the proposed scope of work. This includes a conference call with the original selection committee and HSGA on July 3rd, which reviewed the proposed scope and answered any questions or clarifications. Conversations have also been taking place with the Chamber of Commerce and area business associations concerning the proposed scope and its anticipated effect on the community.

The scope envisions a market analysis of four sectors consisting of retail, office, hotel/convention, and manufacturing/industrial. HSGA has submitted a scope of work in the amount of $79,400. The study will consist of 9 tasks including a final report presented to the City Commission, and the study is scheduled for completion in 95 days.

Task 1 identifies the sources of information HSGA will utilize to conduct the market analysis. Task 2 will outline the market area and boundaries by land use throughout Manhattan. Task 3, 4, 5 & 6 focus on the characteristics of the 4 sectors mentioned above. In each of these sectors, HSGA will inventory, quantify, calculate, and forecast current and recent, sector trends in Manhattan. Task 7 will consist of HSGA generating strategies to reach the economic objectives capable in Manhattan. Task 8 and 9 consist of HSGA preparing and presenting a final report to the City Commission.

A Project Resource Committee (PRC) has also been established as part of the scope of work and will serve as the point of contact and reference for HSGA throughout the market analysis. The committee is comprised of the individuals who served on the initial selection committee (mentioned above). They are scheduled to meet initially with HSGA in Task 1 to identify prospective interviewees familiar with the local real estate market and socio-economic characteristics and after Task 6 to review the previous six tasks findings and conclusions. The committee will meet for a final time to review the draft final report in Task 8.

David Slater, Vice President of HSGA, has also attached a letter pertaining to the concept of business associations and other organizations participating in this market analysis by gathering information and supplying it to HSGA as an in-kind gesture to the study in return for a reduction in the cost of the scope of services. Mr. Slater expresses his concern for this particular process and explains his rationale behind this decision. The selection committee has accepted his explanation and suggested that the business associations to provide monetary gestures to assist in the funding of the market analysis.

The total project costs are $79,400. In order to fund this effort, City Administration suggests the following resources:

1) $34,200 was budgeted in the 2001 for a Downtown Urban Design Plan. It appears it would be more appropriate to utilize these funds for the Market Analysis and perform the Design Plan in the future. The Market Analysis will more closely correlate with the Comprehensive Land Use Plan update and provide valuable information for the community to focus its development efforts.

2) Commitments from the Business Associations and the Chamber of Commerce (see letter attached) total $24,000.00 to partner with the City to help fund the analysis.

3) The balance of 21,200 can be obtained from the General Fund due to substantial savings in vehicle and equipment purchases this year.