City Hall's decision to hire the same consultants who previously concluded Shockoe Bottom was the best place for a new baseball stadium has some wondering if the game is rigged in favor of downtown baseball.
But it won't be that easy. In the process of concluding that removing The Diamond from the Boulevard would open the area to potentially 305,000-square-feet of retail development, the consultants -- Davenport & Company, Chmura Economics & Analytics and Washington-D.C.-based Economics Research Associates -- performed a market demand analysis of both the Boulevard and Shockoe Bottom sites.
Their analysis found enough demand to generate $115 million in gross retail sales on the Boulevard. In the Bottom, they concluded there was demand for approximately 65,000 square feet of retail with gross sales of $26.5 million.
That's a long way from 192,000 square feet of retail and more than $90 million in gross sales proposed by Highwoods Properties, the developer behind the $363 million ballpark development in Shockoe Bottom. While there are other components to the project, including condos, office buildings and a hotel, the proposed retail development is key to making the numbers work.
Retail sales, including restaurants, generate the lion's share of the tax revenue in the proposal, which would be diverted away from city coffers to pay for the $70 million ballpark. The developers are projecting that Shockoe Center will generate $6.59 million retail, admissions and meals taxes annually, or more than 73 percent of the revenue needed to cover the bond payments.
In a letter to city officials, Davenport & Co. says the upcoming feasibility study will focus on the Shockoe Bottom proposal, but adds that the new study “will build on the work previously completed” in the September report.
The September study's main objective was to analyze the highest and best use of about 59 acres around The Diamond on the Boulevard. The consultants concluded that the Boulevard would generate a higher return to the city without The Diamond. But in doing so, the consultants also did a similar analysis of the Shockoe Bottom site.
Broken down, the consultants' suggested “retail program” for the Bottom --which it completed after studying the area's potential market demand -- includes 16,500 square feet of grocery and specialty foods retailers, 26,000 square feet of restaurant space and 22,750 square feet of “Neighborhood Services/ Drugstore/ Other.”
In addition to the discrepancy in Highwoods' retail projections for Shockoe Center -- enough to generate more than $90 million in gross sales compared to the consultants' expectation of $26.5 million in gross sales -- the amount of restaurant space is also drastically different. The consultants anticipate enough demand for about $11.7 million in gross sales, while Highwoods anticipates more than $28 million in restaurant sales.
To read the September 2008 study, click here.