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Cannon Air Force Base Growth Report

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					Portales, New Mexico Housing and Mixed
            Use Opportunity
              2010-2016
                    Greg Fisher, CEcD
                    Executive Director
   Roosevelt County Community Development Corporation
                    September 28, 2010
       Portales Demographics – 4% population growth per year in 2010



Portales Metro Area =
20,000 people within a 15
minute drive, 80,000 within
a 30 minute drive includi ng
Cannon AFB and Clovis)

3,000 students additional,
August-May school year

Denver is 8 hours north,
Dallas is 7 hours east,
Phoenix is 10 hours west
Clovis is 20 miles away,
Cannon AFB is 14 miles,
Lubbock Intl. Airport is 114
miles

Taos, 3.5 hours; Santa Fe,
3 hours; Ski Apache in
Ruidoso, 2.5 hours; Ski
Cloudcroft, 2.5 hours;
Hobbs, 1.5 hours; Lubbock
Airport1.75 hours
    Portales National Rankings
            (US Census and Bizjournals.com)


• Top 17% of US communities in Racial Diversity
• Top 17% of US communities in the number of College
  Educated Adults per capita
• Top 13% of US communities in Rent Affordability
• Top 10% of US Communities in number of citizens who
  Walk and Bike to Work
• 9th-highest Quality of Life in the West, and 15th in the
  entire US
• Top 8% of US communities with a Short Commute to
  Work
• Top 3% of US communities in Property Tax Affordability
A Nice, Affordable Place to Live:
Portales Ranks 15th among 577 communities
   for USA Small Town Quality of Life, and 9th in the West
              (www.bizjournals.com, 2006)
      Portales Housing (88130)
• 7,107 homes and 2,233 apartments, 1010 college dorm
  beds in 88130 Zip Code Area
• Average rents of .65 (20+ years old) to $1.00 per square
  foot (new)
• Over 50% of Portales housing was built between 1950-
  1979, less than 10% has been built since 1999
• Rental vacancy rate is 3% within City of Portales (survey
  data of 24.6% local rental landlords )
• No new apartment complex has been built in Portales
  since the 1970s except privatized student housing (1,010
  beds on campus and 98% full as of 2/10)
• Military demand alone exceeds supply by approximately
  100-200 units/year through 2016
    Portales Housing Market Strengths
•    Cheap Homes – but mostly built from 1950-1980:
      – 7,100 single family homes, over 70% of which are 20+ years old
      – 2,100 rentals, over 70% of which are 20+ years old
•    Safe Neighborhoods – not at crime levels of nearby communities
•    12 Miles from CAFB South Gate and NO TRAFFIC
•    3-6% growth/year in Portales population
      – ENMU: 4,300 students - record enrollment for last four semesters
      – Cannon Air Force Base: bringing 7,500+ people to area by 2014
•    17,300-18,300 people live within a 10 minute drive
      –   Zip Code 88130 is the correct measure of Portales Metro Area
      –   70,000 people within 30 minute drive including Clovis, CAFB
      –   60 for sale units under construction in 2010 – 40 under $170K
      –   More units expected TBD pending agreements
      –   Fox Trails: largest new rental community - .90 per square foot/month – building
          Phase III (30 units in 2010)
•    Students, military, downsizing seniors, retirees abound in Portales
           Portales Housing Market
                 Weaknesses
• Construction rate doubling to 80 units a year (confirmed) but not yet
  keeping up with demand – need by Summer 2010
    – Estimated demand 250-400 units/year: 50% rentals and 50% for sale
      below $180K
    – Builders averaging 80% for sale at average $190K
• No new larger private apartment complex has been built in Portales
  since 1970s – need asap (one prospective development)
    – Privatized 50 unit on campus complex is $1.20 psf
    – Local builders are not used to multi-unit development above 4-plex
• Old “mid-century” homes are cheap, but often a turn-off to military
  and students
    – 800-1800 square feet, small rooms, low ceilings, paneling, some need
      repairs
• However, these units are located in safe neighborhoods with mature
  vegetation, and have instant equity if buyer is willing to fix
           Portales Housing Market
                 Opportunities
• Build 100-200 rental units per year: low maintenance landscaping,
  modern kitchen, large master BR
   – Townhomes and large luxury apartment complex are desired but not
     tested (last large complex built in 1979, very few townhomes)
   – Military families and singles will rent and mix with students
• Build 100-200 for sale units/year, $110-$180K
   –   Target military, students, university and industry professionals
   –   Attract move up buyers from paid-off homes (38% are paid off)
   –   Many old Portales homes are just 860 square feet!
   –   Untapped buyers over 55, a majority have no mortgage and many wish
       to “age in place” in a newer home- untapped local market
• Fix existing homes for instant equity
• Extended stay, motel and commercial on mixed use
   – Mixed use sites available to stage development starting with rentals and
     extended stay through 2016 growth period
• Square footage secondary to layout and modern amenities/quality
                Constraints
• Bank Financing is difficult iand has slowed down
  several projects
• Project developers gearing up for 2010 have
  been “slow go”
• No local “fix and flip” contractors to fix up old
  mid-century homes and buyers lack time
• Marketing is poor- often by word of mouth, for
  sale by owner, no broker involved, small signs,
  etc.
• Good deals are out there but renters and buyers
  do not have time or do not know how to reach
  landlords and sellers
           Portales Neighborhoods
•   Downtown Portales: The "ABC" Streets - Shaded streets with modest to medium-
    sized 1950s bungalows $55-$100K
•   Zodiac Streets - Attractive middle income homes built in the 1960s-80s, mostly brick.
    Small family-oriented streets. Includes new Sun Court homes, around $135K
•   Oakwood Manor - A NEW, gated community filled with attractive brick homes which
    are all custom-built from $170-230K.
•   Mesa Addition - A charming, mainly brick-styled 1990s neighborhood with medium
    to large-sized homes up to $240K.
•   State Streets (Texas, Oklahoma, New Mexico, etc.) - Modest-sized homes which
    are within walking distance from the Eastern New Mexico University Campus - $85-
    150K.
•   City Streets (Houston, Indio, etc.) – modest 1960s ranch homes in clean area from
    $55K-$90K
•   Yucca Estates (includes Fox Trails Rentals) – Nice mid-Century homes and luxury
    rentals, $150K and up to $1,100.month for 3/2)
•   Territorial Estates – NEW Brick homes from $135-$180K next to 801 Housing
•   Mock Homes – NEW Stucco Homes from $159-179K next to ENMU Arena
•   Rural- Roosevelt County has open land full of quaint country homes, or land to build a
    custom home.
           Portales Shopping
• Several top-ranked restaurants and bars (Steak,
  Italian, New Mexican, Sports Bar, only full Disco
  in area) . 30 restaurants total
• Large True Value Hardware, well-organized
  Super Walmart, etc.
• Several large furniture stores (Ashley’s Valley,
  Ranch House, Cindi’s, plus consignment shops )
• Women’s Clothing (Sheila’s, Hot Thread, Merle
  Norman, Main Place)
• Abundant local services (medical, auto hair, etc.)
               Commercial NEEDS
•   Motel and /or Extended Stay
     – Only 160 beds are available in a busy university and manufacturing
       town with growing military, and only 100 brand name beds on the
       Internet. Prices are as high as $105/night and very high occupancy
     – Hampton Inn, Microtel, Fairfield, Staybridge, etc. are worthy targets
•   Family Entertainment
     – Games, theme dining, unique sandwich, Asian fast food, ice cream,
       24/7 breakfast place, diner: Baskin-Robbins, GameStop, Schlotzky’s,
       Denny’s, IHOP, Chili’s, Applebee’s are key targets, as is a MOVIE
       THEATER
• General Retail
     – CVS, Walgreens, Payless Shoes, Ross, Rue 21, Starbuck’s, Einstein
       Bagels, Red Hana, etc. are key targets
     – There is NO shoe shop and NO men’s clothing in Portales (aside from
       western wear and a Beall’s)
                Portales Schools
• Portales Municipal Schools are fully integrated, newer,
  and very safe related to other schools in region
   – All Portales kids of the same grade go to one school together,
     promoting harmony and budget success
• University credit courses at HS level
• Top-quality rankings in reading, girl’s sports, graduation
  rate, etc.
• Nearby rural schools (Dora and Floyd) are top-ranked
  schools in New Mexico
• State Champs in several sports areas
• Bilingual program starting at K level
• Faith Christian Private School available
Portales Neighborhoods
                               ENMU
CULTURAL CENTER OF PORTALES:

Free concerts, plays, festivals, etc.
• Large International Student Population and
   Services, Clubs, etc.
• Safe, clean 4 year campus
• Free college tuition for graduates of New Mexico
   high schools maintaining 2.5 GPA
• Top programs in broadcasting, music, plus
   excellent nursing, biology, business programs
• $100 per year recreation center and indoor pool,
   league teams, etc.
• 3 PBS stations and 1 NPR Station in Portales
• Diverse student population
• Starbucks! In Liberal Arts Building, Café in
   Student Center, Barnes and Noble Book Store
   located near Student Center
• State Champs - Zias and Greyhound Sports
         Demographic Overview
• Growing Air Force, university, and agri-business community of just
  under 20,000 people (3-6% per year population growth)
• Low crime, high quality of life, excellent economy at 4.9%
  unemployment rate and net job growth each year since 2007
• Average household income of $41,000, low personal debt, 20%
  make above 65K/year and 5% are high net worth (above $1 million)
• Young, educated population – Average age below 30, Over 50%
  adults over 25 have some college, 10% have Masters or PhD
• Military job growth at Cannon is attracting dozens of families to
  Portales each month but many cannot find suitable housing
• Military Housing Allowanced Guaranteed by US Government –
  $650-$1,400/month depending on rank and family size
• University growth is attracting additional buyers and renters- many
  desire higher quality units to rent or buy as a four year investment
• Diverse, hard-working, low crime community
                 Demographics

                              Excellent Working Age
                              Population




This model does not predict
Growth in Military Jobs
    Portales Demographics (88130)
•   17,335-18,376 permanent residents within
    the Portales Area (Zip Code 88130) in 2008
•   Over 2,500 additional residents are college
    students at ENMU from August/May
•   Average age of 29.7, over 50% of adults
    have some college education
•   Cannon AFB is 15 minutes north of Portales
    and growing by an additional 2,500 Airmen
    through 2014 (plus dependents and
    contractors = approximately 7,500 people)
•   Portales has approximately 10,300 jobs
    and 9,800 employees and thus is a net
    importer of labor – many of whom cannot
    find housing in Portales

DATA SOURCES:
• http://www.city-data.com/zips/88130.html
                                                   88130 Zip Code, Cannon
•   http://www.bestplaces.net/zip-code/Portales-   AFB is just 12 miles north
    New_Mexico-88130.aspx
           Portales Economy
• Solid balance of education and government (26%),
  Agriculture (20%), visitors (11%), services (9%), clean
  manufacturing (8%)
• $250 Million in annual agri-business exports
• $60 million higher education impact/year
• $180 million retail demand, $33 million retail leakage
• 83% US cost of living (rising) but low average wages
  (78% of state level)
• Cannon Air Force Base expanding by +/- 15,000
  between 2008 and 2014 (12 miles away) – we expect a
  minimum of 3,000 more residents over next 5 years.
• ENMU record growth for 4 semesters – 4.300 students
Roosevelt County Economic Base
      Over 25% Government + ENMU
      30% Agri-business and Food Mfg.
      VERY BALANCED and GROWING
      in 2010
                    Major Companies
•   Sunland Inc. - #1 producing organic peanut butter plant in USA – 200+ employees
•   DairiConcepts - #3 largest milk solids plant in USA and global exporter – Kraft
    Velveeta, Nestles
•   Southwest Canners - #1 Coca Cola Energy Drink and airline (25 cl) can plant in
    Western US
•   Hampton Farms Portales Select Peanuts– Roast 100% of NBL baseball peanuts
    distributed to every baseball park in USA
•   Eastern New Mexico University - #3 in state and growing fast – 750 employees
•   Greatwide Logistics Services - #11 transportation logistics firm in USA, adding 100
    Portales jobs in 2010
•   Southwest Cheese – World’s largest cheddar cheese plant – 200+ employees
•   Western Dairy Transport - #30 largest private US carrier located major branch office
    in January 2010 – 100 new Portales jobs in 2010
•   Horizon Organic Dairies – Two of largest US facilities in Roosevelt County
•   J.D. Heiskell - #4 largest US grain trader
•   Roosevelt County is the largest dairy producing county in New Mexico and center of
    7th largest US dairy region – 40 working dairies over 200 cows each
•   US Air Force Special Operations Command at Cannon AFB (12 miles north) adding
    2,500 plus jobs in 2010-2014
•   Super Walmart, Portales Schools, True Value Hardware, C and S Oil, etc.
        Roosevelt County = “Agri-business Central” AND
             “Wind, Solar, and Biomass Central”

•The Seventh Largest US Dairy Producing
Region is centered in Portales
•The “Tres Amigas” Renewable Energy
Superstation is to be located 30 miles
north of Portales in 2014-2016
•Portales is 17 miles from BNSF Main USA
Line on an affordable SWRR spur
   Portales Keeps Attracting World
    Class Professional Resources
• www.tamaki.co.nz
   – 100 S. Avenue A, Portales
   – Factory Process Engineers worldwide:
     NZ, UK, now US
• www.phelpsengineering.net
   – 120 Commercial St, Portales
   – Full service civil engineers
   – World-class planning and construction
     partners
• www.automateddairy.com
   – May 2009 – Horizon Organic Inc.
     organic milking parlor systems
• www.greatwide.com
   – 11th Largest Logistics Company in
     USA locating in January 2010
Industry Growth through 2015


              Gov’t, Finance,
              Mfg., IT, Pro Serv.
              Ag., Ed., Health


   Const. +
   Trans.

              Leisure and
              Hospitality
        Jobs and Earnings 2008




Regional Growth Areas: Government, Transportation, Leisure
Where Money is Earned
        Portales Industrial Park
• DairiConcepts- Largest US Producer/ Exporter of Milk
  Protein Concentrate
• Southwest Canners (Coca Cola Energy Drinks)
• Portales Airport (5500 foot runway, 24/7 fueling)
• $300 million in food processing with 800+ steady jobs
Alternative Energy Infrastructure
• 120 megawatts of wind generation in
  Roosevelt County (Padoma LLC, Excel,
  Mitsubishi at San Juan Mesa)
• 26 Million Gallons Per Year of Grain
  Sorghum Biofuel from One Plant
  (Abengoa)
• LAND – lowest cost and taxes in the
  southwest
• Solar radiation at 6.5kWh/m2/day
• Up to 2 Million gallons per day of
  wastewater and two sources of waste
  heat
• Hundreds of trained food processing and
  alternative energy plant technicians in the
  Portales area
            Military Buyers
• 60-70% will rent and 30-40% will buy
• 60% receive $700-850 per month in
  allowances, remainder around $1,100-
  $1,300/month
• Buyers want “affordable homes in the
  $115K-180K range, large master, modern
  kitchen, low maintenance yard, no visual
  “junk” in neighborhood, trails, parks nearby
  (Col. Tim Leahy, 2008)
    Portales Non-Military Housing
              Demand
• Military Contractors and Civilian personnel will
  rent or buy homes. Numbers and salaries are
  unknown – estimated to need at least 25 new
  homes per year in all price ranges.
• Agri-business/transportation is 90% “affordable”
  $115K-$180K) homes or apartments, 10% Agri-
  business management ($160-$275K)
• Students- parents buy on four year cycle, many
  pay cash, usually under $100K, condos OK
• Management, professional- up to $500K, much
  custom build – but newcomers need available
  spec or subdivision homes
    Other Supply-Demand Factors
•   Portales 801 Housing (Cannon Meadows- 150 Air Force
    Units in Portales) is currently 75% full and will fill up by
    mid-2010
•   However, many 801 residents prefer private housing but
    have no good option now
•   On-base Housing is 100% occupied – 504 dorm beds
    and 500 homes
•   Students are looking to upgrade from units over 20
    years old in Portales
•   WDT and Greatwide bringing 100+ net new
    transportation jobs to Portales in 2010
•   ENMU experiencing three straight semesters of record
    enrollment (4,360 full time students, 6% annual growth)
    on-campus dorms 98% full (1,010 beds)
•   Aging housing stock becoming run down and difficult to
    maintain- albeit still cheap at $70 per square foot
•   40% of Portales homeowners have ZERO mortgage,
    mostly over 55 – AGE IN PLACE HOUSING
    OPPORTUNITY
       Portales Housing Data 2008
• MLS – DOES NOT COVER ENTIRE PORTALES MARKET

   – 52 units were sold on MLS – none were new build
   – Average Price of MLS sold was $116,897
   – Average SF of MLS sold was 1,737
   – Average PPSF was $67.29
   – 90% were more than 20 years old and 17 had only 1.0 bathroom. Only 2
     units under 11 years old!
   – Source: Wanda Graham, Kiva Realty 575-760-0155
   – www.kivarealty.net

• FSBO – Approximately 25 new build and 15 resale with PPSP of new
  build around $103
• Many local buyers by word of mouth- data from other units for sale
  unknown
      Portales Housing Data 2009
• MLS - DOES NOT COVER ENTIRE PORTALES
  MARKET
  – 98 units sold on MLS
  – Average MLS sale price of $106,665
  – Average square footage of 1,572
  – Average PPSF of $67.85
  – 78 of 98 units were less than 20 years old, and only 4
    were new build
  – 22 units of 98 were 1.0 bath only
  – Source: Wanda Graham, Kiva Realty 575-760-0155
  – www.kivarealty.net
       Housing 2009 (continued)
• 2009 FSBO new build was approximately 30 units – all 3/2 or 4/2
  with garage or carport
   – Average sale price of new units was $103 psf, size was 1,781 sf
      and sale price was $183,375
• All of Territorial Estates (was not on MLS and most of Oakwood
  Manor was not on MLS
• FSBO resale was approximately 20 units
• Territorial: 1,350-2,200 sf at $107 psf – mostly pre-sold online
  (Yahoo Real Estate and Prudential Realty)
  http://www.territorialestates.com
• Source: Wanda Graham, Kiva Realty 575-760-0155
  www.kivarealty.net
      Overall Market FOR SALE
• At least 75- 150 ADDITIONAL new homes
  needed each year from 2010-2014:
  – At least one big bedroom for king sized bed
  – Big or walk-in closets, modern kitchens
  – Small, low-maintenance yards for pets
  – Near good schools on streets with no trailers or junk
    in yards
  – Near shopping, parks and jogging trails
  – $125-200K per year ($900-1400 per month)
  – Smaller lots and yards are fine if the area is nice
   Overall Market FOR RENT
• Approximately 250 ADDITIONAL new
  multi-family needed in Portales by 2014:
  – Rents of $585-850 for singles, $685-$1,250
    for couples and families
  – PETS ALLOWED, many airmen have pets
  – Low maintenance but outdoor amenities a
    plus: trails, green space, private patio
  – Attached OK for rentals, large apartments
    desired with luxury amenities
     Marketing to Cannon - Other
•   The older airmen often have families and are paid up to $1,200 a month for
    housing allowance. They will choose Portales or North Clovis in the $150-
    200K range
   Airmen and their families want affordable homes, as many coming from
    Florida and Nevada have lost significant money on their homes, and may be
    renting at a loss or can’t sell their old home. Florida insurance has tripled
    due to hurricanes
   But they DO NOT WANT mid-century homes and repairs
   They are told by peers to “go to Portales first and if you cannot find
    anything, go to Clovis second”
•   Portales builders must advertise the fact that we are only 12 miles away
    from CAFB. Many inbound airmen do not know that we are this close but
    word of mouth favors Portales:
•   Blogs: http://www.city-data.com/housing/houses-Portales-New-Mexico.html
•   They want modern amenities and low maintenance
•   The Internet is King (Yahoo Real Estate/Prudential Properties)
                 Sanders Property
• Best traffic count in
  Roosevelt County
    – (US 70 = 20,000
      vehicles per day
    – US467 = 5,000
      vehicles per day
• Best location next to
  Super Walmart
   – out of flood zone
   – on city sewer, only
     needs a $35,000
     lift station
   – on Base Highway
Many opportunities under PUZ
         Other Opportunities
• $50 million per year in military construction
  over the next 10 years ($500,000,000).
• Back office for military contractors
• This does not include construction projects
  under $750,000 or non-military projects.
• Firms bidding must be GSA certified.
• Interested firms should contact Cannon or
  go to www.gsa.gov for more information.

				
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