ECONOMIC BASE ANALYSIS

Bowling Green, KY – District Revitalization Strategy March, 2002 6 A. REAL ESTATE MARKET ANALYSIS DOWNTOWN LAND USE AND MARKET ORIENTATION residential properties, which have been converted into professional office space, restaurants, or other commercial uses. The eastern portion of the study area covers an area from 6th Avenue to the Barren River and from the US/31W Bypass to the CSX rail line. This area is home to a combination of land uses, including residential, strip commercial, auto service, back-office, warehousing, and large institutional uses such as the Medical Center. 1. Western Mixed Residential Zone Some of Bowling Green’s older historic homes are located in the western residential zone located along State and Chestnut Streets (See Map 6-1). A portion of the City’s College Hill Historic District is located in this area. This portion of the study area also contains a number of residential properties that are currently occupied by WKU students, many of which have been converted from single-family residences to rental apartments over the years. The majority of these units are located near the campus between College Avenue and Kentucky Street, and between 13th and 14th Avenues. According to RKG’s property analysis, approximately 27 percent of the Page 6-1 In order to understand the existing land use pattern in the downtown, RKG Associates, Inc. created a District database consisting of approximately 300 commercial and over 561 residential properties. The District revitalization study area covers roughly an 80-block area in the Downtown, bounded in the west by Western Kentucky University, the US/31W Bypass at the southern edge, the Barren River in the east, and the CSX rail line in the north (Map 6-1). The entire study area consists of approximately 584 acres, of which 467 acres are located in District A, referred to as the Renaissance Zone, and 117 acres are located in District B. From a real estate and land use perspective, the District study area can be segmented into three distinct areas. The western portion of the study area, from the WKU campus to around 11th Street, is primarily residential in nature, both singlefamily and rental. The area between 11th and 6th Avenues comprises the central business district and contains many commercial buildings, particularly around Fountain Square Park, and several RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Bowling Green, KY – District Revitalization Strategy March, 2002 residential properties in this area have been converted to rental units from single-family homes. The incidence of residential conversions is very low elsewhere in the District. The market orientation of this neighborhood is largely single-family, with a significant rental housing presence, most notably student and RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-2 Bowling Green, KY – District Revitalization Strategy March, 2002 Map 6-1 Land Use Map The District Bowling Green, KY Eastern Mixed-Use Transitional Zone W N E S d 2n cks Tra ad ilro Ra h 6t e. Av h 7t e. Av . St ter n Ce e. Av t. eS eg ll Co t. eS tat S . St ut tn es Ch t. kS ar P d 2n Tr ac ks Western Mixed-Use Residential Zone Ra ilr oa d . St ky uc nt Ke . St ter n Ce e. Av 6th . St ge lle Co M n ai e. Av th 11 e Av 7th e. Av . St ky uc nt Ke ate St St. w ie irv Fa . St th 11 e Av Prepared by RKG Associates, Inc. RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Western Mixed-Use Residential Zone th 13 e. Av . St ter n Ce e eg oll C St. St. e. Av Central Business District Land Use Key S ingle Family Multi-Family Mixed Use R etail Business S ervice Medical Office Warehouse Industrial Vacant Parking Tax E xempt J 2001 uly, ate St Western Mixed-Use Residential Zone th 13 e. Av Page 6-3 Bowling Green, KY – District Revitalization Strategy March, 2002 lower income housing. The condition of structures varies greatly within this area. The highest incidence of substandard housing is found between Kentucky and Adams Street, where the buildings have not been maintained over the years. The upper State and Chestnut Streets area, where the College Hill Historic District is located is where most of the higher value, better maintained homes are located. In most cases, the homes on these streets have remained as single-family residences and have not been converted into rental properties. 2. Central Business District The area between 11th and 6th Avenues is where much of the City’s central business district is located. The commercial core is centered around Fountain Square Park, which creates a one-way circular traffic pattern in the middle of the downtown. Two to fourstory commercial block buildings are located here, as are government and institutional uses such as the Justice Center, the County Courthouse, and Bowling Green City Hall. A large number of surface parking lots serve this area and currently there are no structured parking decks. The properties in this area are generally in fair condition, and there is some utilization of upper floor space. The buildings are protected by a historic preservation overlay district, which gives the local Historic Preservation Board review authority over all exterior building improvements. This area largely functions as a commercial, professional office, and government services center. While the majority of commercial development is located outside the District, this is the City’s historic retail commercial center. Over the past decade, the District has experienced a steady decline in the number of retail establishments in this area, as there has been a geographic shift in the City’s commercial base. Much of the new commercial growth has been occurring in the Scottsville Road and Campbell Lane corridors, which are more suburban in nature and are located closer to the interstate highway and new residential development. 3. Eastern Mixed-Use Transitional Zone The eastern portion of the study area is largely in transition. The mixture of land uses and the condition of many buildings have created an appearance of neglect. There are several locations where more intense land uses such as warehouses and automotive shops have negatively impacted adjacent residential properties. This has caused the immediate neighborhood to decline and the City reports that drugrelated activity has been a problem in this area in the past. The Medical Center is the single largest property owner in the Eastern Mixed-Use Transitional Zone. In recent years, the Center has expanded its facilities and has acquired numerous residential and commercial properties between the US/31W Bypass and Chestnut Street. The residential character of this area RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-4 Bowling Green, KY – District Revitalization Strategy March, 2002 has been most severely impacted by the encroachment of other conflicting land uses. The homes are typically smaller, bungalow-style and the neighborhood primarily consists of racially mixed and lower income households. The market orientation of this area is largely residential with a strong automotive services, warehouse, and institutional influences. Over the long term, it might be advisable to reinforce the residential character of the neighborhood and to increase property values and minimize land use conflicts land use data for each taxable property in the District. Map 6-1 shows the detailed land use pattern in the study area. RKG then sorted nearly 1,000 taxable downtown property records by their land use designation and then calculated totals for residential and non-residential properties. All government, institutional, tax exempt properties were excluded from the analysis. The data indicate that there are currently 1,576 residential units located in the Downtown District, occupying nearly 1.5 million SF of building space on 120.6 acres of land (Figure 6-1). The total assessed value of these 650 properties was calculated at $35.8 million in 2001, or $22,715 per unit (Table 6-1). Between 1990 and 2000, only 32 new units were constructed in the study area, equaling a 2 percent increase for the decade. The average assessed value of all residential properties in the District was $24.21/SF in 2001, with District Residential Land Uses Number of Units and Building SF Amount of Building SF 0 150,000 300,000 450,000 600,000 B. REAL ESTATE DEVELOPMENT TRENDS Residential 1. Downtown Development Trends During the months of April and May of 2001, RKG Associates, Inc. assembled a database of property information for the entire downtown district. The data were obtained from the City of Bowling Green’s Property Valuation Department. Each property record contained the address of the subject property, the owner’s name and address, total building square feet, total lot square feet (acres), the construction date of the building, and the total assessed value of both land and buildings. Using a digital GIS land use map prepared by the City/County Planning Department, RKG Associates was able to link the property assessment records to the parcelized Figure 6-1 Multi-Family Residential Conversion District Residential Land Uses Figure 6-2 Assessed Values Per Square Foot Duplex/Townhouse Multi-Family Single-Family SOURCE: Bow ling Green 0 Property V aluation Dept. Residential Conversion 200 400 600 800 Number of Dwelling Units Duplex/Townhouse RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-5 Single-Family SOURCE: Bow ling Green Property Valuation Dept. 10 15 20 25 30 Number of Dwelling Units Bowling Green, KY – District Revitalization Strategy March, 2002 single-family structures possessing the highest values ($29.19) and multifamily ($19.84) the lowest values (Figure 6-2). On average, downtown residential values are considerably below the average new replacement cost value for all housing types the City. 2. Downtown Non-Residential Development Trends Non-residential properties, which include retail, business services, office, medical, warehouse, and industrial uses, comprise another 302 parcels containing 2.9 million SF of building space on 139 acres. The two largest non-residential land use in the District include retail, which includes 134 parcels and 625,000 SF on 47.2 acres and medical uses, which have the fewest number of parcels (13 parcels), but possess the largest amount of building space, roughly 800,000 SF (Figure 6-3). The majority of this space is located at the Medical Center in the eastern portion of the District. The District’s total non-residential tax base equaled approximately $114.5 million in total assessed value in 2001, an amount greater than three times its residential tax base. However, between the period 1990 to 2000, the District only added $5.7 million in new non-residential assessed value, for an increase of 5 percent (Table 6-2). In terms of average assessed value per square foot of building space, the District’s medical land use contribute the most real property value to the City’s tax base. At over $80 per square foot, the District’s medical facilities are 11 times more valuable than the industrial facilities ($7.91/SF) that are located in the study area. Office land uses are the second most valuable land use at nearly $35/SF, followed by business services ($28.17/SF) and retail at $27.09/SF (Figure 6-4). As the City redevelops portions of the District, it should be mindful of how different land uses can contribute to the overall value of the real property tax base. Diminishing lower value uses and encouraging higher value development should be one objective of the City’s downtown revitalization efforts. District Non-Residential Land Uses Building Square Feet by Use Figure 6-3 Industrial Warehouse Medical Office Business Services Mixed-Use Retail 0 200,000 400,000 600,000 800,0001,000,000 SOURCE: Bow ling Green Building Square Feet Property Valuation Dept. District Assessed Values By Land Use Values Per Square Foot (2001) Industrial Warehouse Mixed-Use Retail Business Serv ices Of f ice Medical Figure 6-4 RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. $0 $20 $40 $60 Page 6-6 $80 $100 SOURCE: Bowling Green Property Valuation Department Assessed Value Per SF Bowling Green, KY – District Revitalization Strategy March, 2002 RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-7 Bowling Green, KY – District Revitalization Strategy March, 2002 TABLE 6-1 and 6-2 RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-8 Bowling Green, KY – District Revitalization Strategy March, 2002 3. Suburban Residential Development Trends Over the past several decades, the City of Bowling Green and Warren County have continued an outward expansion of population and development to the south and west of the Downtown District. Since 1992, the City and County have seen a 200 to 250 percent increase in the number of residential permits issued annually. In 1991, a total of 457 residential permits were issued, followed by 716 permits in 1992. In 1993 this number rose to 1,018 new permits, a 122 percent increase in just two years. Since 1992, the City and County have issued an average of nearly 1,000 new residential permits each year, up from 487 annually during the previous ten-year period (Figure 6-5). Single-family development is still the most prevalent housing type, but the County has seen a number of new multi-family developments come on line in recent years. During much of this growth period, City of Bowling Green has experienced strong employment growth, which has likely attracted many new residents to the community (See: Chapter 4 - Economic Base Analysis). The result of this recent housing boom has seen the average cost of a singlefamily dwelling (not including land costs) increase from $45,700 per single-family unit in 1980 to nearly $118,000 per unit in 2000, an increase of 158 percent in 20 years. This level of price inflation far exceeds the 1,200 1,200 1,000 1,000 Number of Units Number of Units New Residential Units, By Type* New Residential Units, By Type* Bowling Green-Warren County, 1980-2000 Bowling Green-Warren County, 1980-2000 Figure 6-5 Figure 6-5 800 800 600 600 400 400 200 200 0 0 1980 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 * No separate Mobile & Manufactured Housing Data * No separate Mobile & Available Before 1996 Manufactured Housing Data Available Before 1996 Single Family Single Family Mobile Home Mobile Home Year Year Duplex Duplex Manufactured Manufactured Multi-Family Multi-Family Average Value of Residential Units* AverageCounty Combined, 1980-2000 Value of Residential Units* City & City & County Combined, 1980-2000 $120,000 $120,000 Figure 6-6 Figure 6-6 Average Value (in Dollars) Average Value (in Dollars) $100,000 $100,000 $80,000 $80,000 $60,000 $60,000 $40,000 $40,000 $20,000 $20,000 $0 $0 1980 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 * Excludes Mobile Housing * Excludes Mobile Housing Year Year Single Family Single Family Multi-Family Multi-Family Duplex Duplex Manufactured Manufactured general rate inflation during the 20year period (Figure 6-6). A geographic analysis conducted by the City-County Planning Commission of Warren County in 2001 shows that over the past three years approximately 43.2 percent of all new residential building permits have originated from two census tracts located in the southwestern portion of Bowling Green and Warren County. The Natcher Parkway splits these tracts and the majority of new single-family Page 6-9 RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Bowling Green, KY – District Revitalization Strategy March, 2002 and townhome development has been occurring between Morgantown and Nashville Roads (Map 6-2). Several new single-family and townhome communities have been developed in this area. Affordably priced land, municipal infrastructure, proximity to shopping and easy access to the Interstate are contributing to strong growth in this section of the County. The second most active residential RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-10 Bowling Green, KY – District Revitalization Strategy March, 2002 growth area is occurring in an arc to the south of the Interstate and encompasses much of Warren County’s southern tier (Map 6-2). 4. Suburban Commercial Development Trends One development trend that is particularly relevant to the Downtown District is the expansion of commercial activity along major transportation corridors outside the Downtown. The commercial successes of Scottsville Road and Campbell Lane are the two most notable examples of this trend. Since the early 1970s the City has seen several million square feet of new commercial development occur outside the Downtown District. Hundreds of new businesses including national and regional retailers, chain restaurants and hotels, business and automotive services, healthcare facilities, and any number of other establishments have located in Bowling Green within proximity to the Interstate Highway. The City is an attractive location given its significance as a regional center for shopping, healthcare, banking, legal and government services, and entertainment and dining. Because the City draws its customer base from a 30-mile radius, it has been able to attract a disproportionate number of commercial enterprises, far more than a city of 50,000 population could normally support. Between 1993 and 2000, a total of 440 commercial building permits were issued in the Bowling Green-Warren County area, of which 91.5 percent were issued in Bowling Green (Figure 6-7). The total estimated value of these new commercial projects (not including land costs) was approximately $247 million for the City of Bowling Green and less than 7 million for the County. While this commercial growth trend is generally viewed as positive for the local economy and government coffers, it’s also having deleterious effects on the District’s commercial base and local traffic congestion. While suburban shopping malls are often villainized for siphoning business activity away from central business districts, Downtown Bowling Green is adapting to these changes and is transforming itself into a education, dining, professional services, and legal/government center. Despite its efforts to maintain it retail position, the District has lost many of its traditional downtown retail establishments to outside competition and attrition. Future policy decisions of local government could exacerbate the District’s economic revitalization efforts. Decisions that encourage the expansion of Bowling Green’s Commercial Permits Commercial Permits By J urisdiction, 1993-2000 By J urisdiction, 1993-2000 70 Figure 6-7 Figure 6-7 70 60 60 Number of Permits Number of Permits 50 50 40 30 20 40 30 20 10 0 10 RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. 0 1993 1993 1994 1994 Page 6-11 1995 1996 1997 1998 1999 1995 1996 1997 1998 1999 Bowling Green Warren County Bowling Green Warren County 2000 2000 SOURCE: City of Bowling Green, Building , City of Smilth Grove and Warren County Building Inspetor SOURCE: City of Bowling Green, Building , City of Smilth Grove and Warren County Building Inspetor Bowling Green, KY – District Revitalization Strategy March, 2002 suburban commercial base, such as the extension of water and sewer and roadway expansions, could continue to devalue RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-12 Bowling Green, KY – District Revitalization Strategy March, 2002 and undercut District property values and the competitiveness of locallyowned business enterprises. The retail gravity began its shift from the Downtown to the Scottsville Road/Campbell Lane area in the late 1970s with the construction of the Greenwood Mall. Since then, most of the new retail and service establishments entering the market have located along these major corridors. Not surprisingly, with this commercial expansion has come increased traffic volumes and congestion. Scottsville Road is now a six-lane roadway and Campbell Lane has five lanes. According to 1999 data obtained from the Kentucky Transportation Cabinet, average daily traffic volumes along Scottsville Road ranged from 20,600 vehicles per day (VPD) near the intersection with the US/31W Bypass to over 34,000 VPD near the intersection with Interstate 65. Campbell Lane traffic volumes ranged from nearly 20,000 VPD near the Scottsville Road intersection to 22,000 VPD between Smallhouse and Nashville Roads. In contrast with these numbers, the District typically achieves average daily volumes in the 2,000 to 4,000 vehicles per day range on its interior streets. On the perimeter of the Downtown, along the US/31W Bypass, the volumes range from 13,000 to 21,000 VPD. The disparity in traffic volumes alone has become an obstacle to attracting new commercial enterprises Downtown. C. BUILDING CONDITIONS AND VACANCY RATES 1. Residential RKG Associates, Inc. conducted exterior visual inspections of all residential and non-residential properties located in the District study area. No interior inspections were conducted as part of this analysis due to the difficulty of accessing every property. The exterior inspections of residential properties rated a number of visible physical conditions on a scale of 1 to 5 with 5 representing the top condition rating of good and 1 reflecting a worst condition rating. The condition factors included: (1) site and landscaping, (2) exterior walls, (3) roof and gutters, (4) doors and windows, and (5) parking and driveways. These condition scores were then weighted by importance and averaged to produce a composite condition rating for each building inspected. The results where then sorted by their score and grouped into five condition categories including: (1) potential demolition, (2) significant repairs needed, (3) minor repairs needed, (4) cosmetic repairs needed, and (5) good condition. RKG estimates that roughly 25 percent of the District’s housing are in need of significant exterior repairs or should be considered for demolition (Figure 6-8). The “potential demolition” rating Page 6-13 RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Residential Exterior Conditions Downtown District (2001) Bowling Green, KY – District Revitalization Strategy Good Condition Figure 6-8 March, 2002 was given to structures, which would most likely require a level of repair exceeding the total assessed value of the building. Only 2.1 percent of the total units were judged to be in good condition. Map 6-3 shows the geographic distribution of housing conditions throughout the study area. The greatest concentration of units requiring demolition or significant repairs is located between Center Street and Adams Street, between 12th and 15th Avenues. The housing in this area tends to be smaller in size and built in the first half of the 1900s. The majority of these dwellings are thought to be rental units, as roughly 65 percent are classified as duplex, multi-family, or residential conversions. Approximately 40 percent of the residential properties in this area were judged to have significant exterior repair problems or may be candidates for demolition. Roughly 63 percent of these parcels had assessed values (including land and building) that were less than $30 per square foot, which was judged to be very low. Another small concentration of substandard housing is located in the vicinity of the 7th Avenue and Center Street intersection. Of the 42 residential properties located in this area, nearly 63 percent require either significant exterior repairs or may be candidates for demolition due to excessive repair costs. In addition, almost 75 percent of these properties have total assessed values (including land and building) of less than $30/SF. Cosmetic Adjustments Minor Repair Significant Repair Potential Demolition 0% 10% 20% 30% 40% Percentage of Total Units SOURCE: RKG Associates, Inc., 2001 RKG estimates that the residential vacancy rate in the District, at the time of inspection (March-April, 2001), was approximately 4.8 percent, in terms of total square feet. Without conducting interior inspections, it is difficult to document 100 percent of all vacant space; however, it is generally believed that housing occupancy in the District is quite high. This doesn’t account for seasonal vacancy and the turnover that occurs at the end of the spring semester as WKU students move out of District housing and return home. Another common factor that can influence the maintenance and upkeep of residential properties is the percentage of absentee ownership. As is often the case, owners that do not reside at the subject property or in fact live in another community, may be more inclined to defer or ignore regular property maintenance. In such cases, dwellings can begin to show signs of wear and tear and fall into a substandard condition. Persons not living in Warren County own roughly 10 percent of all residential properties in the District. While this factor alone does not signify neglect or deferred maintenance it can become a Page 6-14 RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Bowling Green, KY – District Revitalization Strategy March, 2002 contributing factor to neighborhood decline. RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-15 Bowling Green, KY – District Revitalization Strategy March, 2002 Map 6-3 Residential Building Conditions The District, Bowling Green, KY Housing Rehabilitation cks Tra ad Zone ilro Ra Revitalize “Shake Rag” Neighborhood N W S E d 2n t. rS te n Ce 6th e. Av e. Av . St ge lle Co ate St . St Housing Rehabilitation Zones Tr ac ks e Av th 11 ky uc nt Ke . St er nt Ce St. t. tS nu t es Ch rk Pa St. 6th Ra ilr oa d t. eS leg l Co . St ain M Fountain Square t. yS ck u nt Ke e Av th 11 7th e. Av e. Av 7th e. Av d 2n e. Av ate St . St iew irv Fa th 13 e. Av Prepared by RKG Associates, Inc. t. rS te n Ce t. eS eg ll Co ate St . St Control Medical Center Encroachment e. Av RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. th 13 e. Av College Hill Historic District Residential Condition Potential Demolition S ignificant Repairs Minor Repairs Cosmetic Adjustments Good Condition Downtown Study Area J 2001 uly, Page 6-16 Bowling Green, KY – District Revitalization Strategy March, 2002 2. Non-Residential The inspections of non-residential properties were completed by RKG at roughly the same time as the residential inspections. The consultants documented existing exterior materials and evaluated the condition of these materials, based on field observations. RKG assessed the general condition of the following exterior elements: (1) foundation, (2) façade, (3) roof, (4) gutters, (5) downspouts, (6) windows, (7) doors, and (8) the availability of handicapped access. RKG also documented existing land uses, vacancy levels, parking and loading areas, frontage streets, tenants, and other factors. According the inspection results, the condition of non-residential properties varies greatly throughout the study area. In general, approximately 90 out of 492 (18.3 percent) of nonresidential storefronts were judged to be in need of significant repair or were candidates for demolition (Figure 6-9). Nearly 72 percent of all storefronts in the District were only in need minor repairs (Map 6-4). The most significant concentration of substandard non-residential properties is located between 6th Avenue and the riverfront and between State and Center Streets. This area is predominantly commercial in nature, although it’s surrounded by residential properties. Common uses included automotive service and repair facilities, warehousing, and industrial operations. Over time, these more intense commercial uses have eroded the residential character of the neighborhood and the area has evolved into transitional mixed-use zone. The assessed values of properties east of 6th Avenue, between Chestnut Street and the CSX rail line, are quite low (Map 6-4). Approximately 50 percent of all commercial properties in that area have assessed values below $15/SF. Another significant concentration of lower value space is located along Main Avenue between State and Center Streets. The highest value non-residential space is located at the Medical Center and the surrounding neighborhood, where values exceed $60/SF. Non-residential vacancies are primarily concentrated in the multi-story commercial blocks surrounding Fountain Square Park. An on-site inspection of these buildings indicate that 84 percent of the commercial properties abutting the park have a vacancy factor of at least 20 percent of total building square feet. Twenty-six percent have at least 50 percent Non-Residential Exterior Conditions Downtown District (2001) Good Condition Figure 6-9 Cosmetic Adjustments Minor Repair Significant Repair Potential Demolition 0% 10% 20% 30% 40% 50% 60% Percentage of Total Storefronts SOURCE: RKG Associates, Inc., RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-17 Bowling Green, KY – District Revitalization Strategy March, 2002 vacancy rates. Regarding the level of absentee ownership, RKG estimates that approximately 14 percent of the District’s non-residential properties are owned by individuals residing outside of Warren County. RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-18 Bowling Green, KY – District Revitalization Strategy March, 2002 Map 6-4 Non-Residential Building Conditions The District, Bowling Green, KY Commercial Core District Strengthen retail/dining/services Encourage mixed-use District activity & entertainment center ky uc nt Ke Tr ac ks Riverfront Redevelopment W N E S d 2n cks Tra ad ilro Ra 6th e. Av t. rS te n Ce e. Av - t. eS eg ll Co ate St . St St. t. tS nu t es Ch rk Pa St. 6th Ra ilr oa d . St er nt Ce t. eS eg ll Co . St ain M 7th e. Av e. Av d 2n e. Av e Av th 11 7th e. Av t. yS ck u nt Ke ate St . St iew irv Fa Hospital Expansion Zone e Av th 11 th 13 e. Av Prepared by RKG Associates, Inc. . St er nt Ce e. Av t. eS leg l Co ate St . St Transitional Mixed-Use Zone - - Create new park Develop Mixed Housing Relocate Selective Businesses RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. th 13 e. Av Commercial Condition Potential Demolition S ignificant Repairs Minor Repairs Cosmetic Adjustments Good Condition Downtown Study Area J 2001 uly, Page 6-19 Bowling Green, KY – District Revitalization Strategy March, 2002 D. LEASING ACTIVITY vary from gross to triple net (Table 63). The Downtown has been successful in attracting professional office users such as law firms, accountants, real estate, and financial services firms to older, cheaper space. Many law firms have renovated older buildings and have converted single-family homes into office space. These firms have been attracted to the downtown because of its historic character, the availability of lower cost space and ample parking, and the proximity to government offices. 2. Retail Market The District’s retail presence has been weakened by suburban commercial growth occurring in other parts of the City. As a result, there are only a small number of well established and specialty retailers still conducting business in the District. The District’s very low traffic volumes are not sufficient to attract new businesses Downtown and the older building space is not competitive with newer space that is located in high traffic areas such as Scottsville Road, Campbell Lane, or the US/31W Bypass. RKG Associates estimates that there is currently about 625,000 SF of retail space located in the District, with another 486,000 SF of space occupied by business services and another 130,000 SF of mixed-use space, combining commercial and residential uses. RKG estimates that there is approximately 186,000 SF of vacant 1. Office Market Given the District’s current position in the marketplace, there has not been an abundance of sale and leasing activity. In fact, there is only one real estate broker in town that actively works the downtown market. Neal Turner Realty is one of the City’s more prominent brokers and they report that the downtown market has been quite slow in recent months, particularly in the area of office leasing, where there is a growing number of vacant properties. The District has approximately 374,000 SF of office space, much of which is located in older Class C buildings and in upper floor space. The largest office project in recent memory involved the construction of the new Justice Center at the corner of 11th Avenue and Kentucky Street. That project required the assemblage of several smaller parcels and added between 150,000 SF and 200,000 SF to the District’s supply of office and government space. The majority of downtown properties are not professionally managed and do not compete well with newer office space located outside the downtown. Downtown office lease rates range from $7 to $10 per square foot (gross). While office rents outside the downtown, in more active commercial districts, range in the $12 to $15 per square foot range, and lease terms can RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-20 Bowling Green, KY – District Revitalization Strategy March, 2002 commercial space in the Downtown, for a vacancy rate of 15 percent. Approximately 55 percent of this vacant space are located in upper story space. Downtown retail space rents in the $6 to $8/SF range on a gross basis (Table 6-3). Outside the downtown, rents approach the $12 to $15/SF range and can exceed $20/SF at the Greenwood Mall (Table 6-3). Retail growth has been very strong in Bowling Green, particularly over the past decade. Nearly every major and Campbell Lane corridors. According to local developers, the commercial expansion is slowing due to a lack of land resources, but there is continued interest from several retailers who are still looking to enter the Bowling Green market. The Downtown has experienced some success in recent years in attracting fine dining restaurants such as 440 Main, the Parakeet, and Mariah’s, which has been located in the Downtown for years. It has also had some success in attracting specialty retailers such as antique dealers and Table 6-3 Current Commercial Properties For-Lease and For-Sale Bowling Green Market RETAIL-FOR-LEASE Property Type Retail-for-Lease Retail-for-Lease Retail-for-Lease Retail-for-Lease Retail-for-Lease OFFICE-FOR-LEASE Property Type Office-for-Lease Office-for-Lease Office-for-Lease Office-for-Lease Office-for-Lease Office-for-Lease Office-for-Lease Office-for-Lease Office-for-Lease Office-for-Lease Office-for-Lease Address 1502 Old Louisville Road 900 Fairview Avenue 870 Fairway Avenue 2505 Russellville Road 1406 US 31W Highway Building SF 5,000 9,900 19,200 2,100 1,800 Leasable SF 5,000 1,600 3,200 2,100 1,700 $ $ $ $ $ Lease Rate/SF 4.20 7.50 7.50 10.50 14.12 Lease Terms Net Other Other Triple Net 5 Yr. Lease Year Built n/a 1981 1980 1975 1978 Listing Agent Neal Turner Realty Neal Turner Realty Neal Turner Realty Neal Turner Realty Coldwell Banker Commercial Legacy Group Comments 14,000 ADT 18-22,000 ADT 15-20,000 ADT 22,000 ADT 18-22,000 ADT Address 411 Park Row 803 Broadway 626 College Street 1700 Patrick Way, Suite 2 1847 Scottsville Road 927 Broadway 328 East 10th Street 330 East 10th Street 181 West Professional Park 911 College Street 1401 Scottsville Road Building SF 3,500 2,500 28,000 1,764 2,000 2,000 3,412 3,412 7,506 20,000 2,700 Leasable SF 3,500 2,500 3,533 1,764 2,000 2,000 1,292 2,120 3,753 3,500 830 $ $ $ $ $ $ $ $ $ $ $ Lease Rate/SF 6.00 7.00 8.00 10.50 12.00 12.00 12.00 12.00 12.75 13.00 14.50 Lease Terms Gross Gross Gross Other Gross Triple Net Other Other Gross Net Gross Lease Year Built 1960 1885 1984 n/a n/a n/a n/a n/a 1994 1900 1995 Listing Agent Century 21 Buddy Adams and Associates Neal Turner Realty Neal Turner Realty Coldwell Banker Commercial Legacy Group Neal Turner Realty Neal Turner Realty Neal Turner Realty Neal Turner Realty Neal Turner Realty Neal Turner Realty Neal Turner Realty Comments Near city hall and Justice Center n/a 2 blocks east of Fountain Sq. n/a 35,800 ADT n/a Near city hall and Justice Center Near city hall and Justice Center Located off Scottsville Road Near city hall and Justice Center n/a BUILDINGS-FOR-SALE Property Type Office-for-Sale Office-for-Sale Office-for-Sale Office-for-Sale Address 328-330 East Main Street 139 East 10th Street 1228 Ashley Circle Destiny Office Park, Sec. II Building SF 3,412 3,000 6,242 1,340 Asking Price 250,000 239,000 525,000 139,900 Asking Price/SF $ 46.89 $ 79.67 $ 84.11 $ 104.40 Terms n/a n/a n/a n/a Year Built n/a n/a n/a n/a Listing Agent Neal Turner Realty Neal Turner Realty Neal Turner Realty Century 21, Buddy Adams & Associates Comments Near city hall and Justice Center Near city hall and Justice Center Off Scottsville Road Located off Campbell Lane Retail-for-Sale Retail-for-Sale Retail-for-Sale Retail-for-Sale Medical Office-for-Sale Medical Office-for-Sale LAND-FOR-SALE Property Type Commercial Land Retail Land Retail Land Commercial Land Retail Land Commercial Land Commercial Land Lot-for-Sale 116 Glenmore Road 1502 Old Louisville Road 2625 Scottsville Road 1750 Campbell Lane 1332 Andrea Street 1320 Andrea Street 2,400 5,000 84,415 3,840 3,264 5,040 175,000 179,000 3,190,000 525,000 350,000 550,000 $ $ $ $ $ $ 72.92 35.80 39.10 136.72 107.23 109.13 n/a n/a n/a n/a n/a n/a n/a 1996 1979 1988 Century 21, Buddy Adams & Associates Neal Turner Realty Neal Turner Realty Neal Turner Realty Lakeside retail location Warehouse buildings Former Wal-Mart building 1/4 mile from Scottsville Road Located near Greenview Hospital Located near Greenview Hospital n/a Golden Rule Real Estate 1988 Kenney Nealy Address Old Louisville Road 5387 Scottsville Road 1213 Eastland Street Lot 4-3 Great Escape Court Lot 4-4:6 Great Escape Court 1121 Fairway Street 1021 Ashley 400 Park Row Land Acres 53.90 19.26 1.38 1.00 1.00 0.65 0.91 0.45 Asking Price $250,000 $1,906,740 $250,000 $275,000 $300,000 $225,000 $346,763 $325,000 Asking Price/SF $ 0.11 $ 2.27 $ 4.16 $ 6.30 $ 6.88 $ 7.95 $ 8.75 $ 16.57 Utilities No Zoning Com. PSC-GEN B-4/R-1 I-2 B-4 B-4 n/a All Utilities All Utilities Listing Agent Coldwell Banker Commercial Legacy Group Neal Turner Realty Neal Turner Realty Coldwell Banker Commercial Legacy Group Coldwell Banker Commercial Legacy Group Neal Turner Realty Neal Turner Realty Neal Turner Realty national retailer and restaurant chain is represented in the Scottsville Road apparel shops. RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-21 Bowling Green, KY – District Revitalization Strategy March, 2002 E. REDEVELOPMENT STRENGTHS AND BARRIERS  during “business hours.” There are opportunities to serve the needs of these customers at a higher level. The aesthetic qualities and character of the District make it appealing for walking and event attending. The Capitol Theater can attract people with the proper venues and programs. Historic character of the District could attract tourists and certain types of businesses into the District. Downtown Bowling Green’s competitive position is defined by a series of competitive strengths and weaknesses. If the City is to succeed in revitalizing the District and reestablishing its commercial and cultural role in the community, it will have to play to its natural strengths and competitive advantages. While many in the community may have already given up hope for the Downtown, the District possesses a number of positive elements that could help change its course and direction in the future. The following is a summary of Downtown Bowling Green’s redevelopment strengths and barriers relative to its future as a commercial, civic, and cultural center for the community. 1. Competitive Strengths    2. Competitive Barriers  Lack of “critical mass” prevents retailers who need higher customer volumes from locating in the District. Low traffic levels and pedestrian volume inhibit retailers who need passerby sales. Poor access to the District from the interstate/other portions of the County makes Scottsville Road more appealing. (This of course will become a competitive advantage for the District once the Cemetery Road-Interstate 65 connection is completed). The nature of the design of the buildings “pigeon-hole” retailers into specific spaces. No flexibility in available space. High quality restaurants bring people into the District to dine. The City can capitalize on that with complementary services. Fountain Square Park is the civic heart of the community and hosts many special events, which bring people into the District. The University has 4,200 employees and over 15,000 students that are potential shoppers almost around the clock. The Justice Center and the hospital provide hundreds of potential customers for District businesses       RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-22 Bowling Green, KY – District Revitalization Strategy  March, 2002 The poor layout and varying floor levels in some older buildings makes upper floor space less useful and does not allow for amenities available elsewhere (e.g., elevators). Negative perceptions (crime, type of goods, lack of convenient parking, lack of variety, etc.) about the District discourages people from shopping and patronizing downtown businesses. Cohesive advertising/marketing efforts are needed to make people aware of events and businesses in the District. The lack of late hours limits the ability of non-District residents and employees to patronize these businesses. Commuting student population makes it difficult to attract weekend/night crowds. Transportation issues, including one-way streets, lack of public transit, gateway access, poor signage, and a disjointed street layout, are disincentives for people visiting the District.      RKG Associates, Inc., LEO A DALY, and Gorove/Slade Associates, Inc. Page 6-23