Attracting out-of-area shoppers is critical to this plan's survival.

This is Part III of a multi-part series looking at the December 2006 study (the Retail Opportunities Analysis or ROA) on the Old Town Newhall Revitalization Project. In Part I, we looked at an overview of the Retail Opportunities Analysis. In Part II, we looked at local businesses targeted for removal. In this installment, we’ll look at creating a boutique environment in the Downtown Newhall area as well as attracting customers to that area.

Creating a Boutique Environment

According to the Retail Opportunities Analysis (ROA), the goal is "to create a compelling district that, over time, creates destination status by offering unique, one-of-a-kind merchandise that is not readily available at area malls and power centers." Part of the plan is to retain the local entertainment (live theatre), add a movie theatre, add live music and dancing, and also add three to four "quality" sit-down restaurants.

Realizing that the area doesn’t have enough to offer to the chain restaurants, the planners are hoping to lure "quality independent operators who share in the belief that Old Town can become special." The plan also calls for having antique dealers and galleries as "interim" tenants to help reinforce the "destination appeal" of the district. Ummm… just what is the definition of "interim" here?

In order for this to work, the redeveloped area must be able to attract shoppers from several miles away since the local demographics cannot support this alone. Per the ROA: "The area nearest Old Town Newhall currently has demographics which are less appealing to quality retailers and restaurants than other areas of the Santa Clarita Valley."

Attracting Shoppers from an Extended Area

In order to gather a large enough population of potential shoppers to justify the types of stores that they’re contemplating, the planners had to expand their scope to at least a 6-mile radius, or a 15-minute minimum drive time. The region mapped for this expanded area reaches up the 5 Freeway to the north end of Castaic, up the 14 Freeway to Agua Dulce, into the Little Tujunga Canyon area, and south (over the hill) below the 118 Freeway along the 5 Freeway and 405 Freeway corridors.

The Retail Opportunities Analysis (ROA) claims that an additional $146.9 million in revenue can be generated by expanding the customer base to this supposed 15-minute drive time area, since the areas farther away also have higher average family incomes. This figure includes over $30 million from the restaurants alone. And the areas defined as 5-minute and 10-minute drive time areas only produce about $146 million combined, so luring shoppers from this extended area is absolutely critical to the viability of this redevelopment plan since it represents over 50% of the total projected income for the Old Town Newhall area.

It’s highly unlikely that most of this mapped area can have a travel time of 15 minutes or less to the Downtown Newhall area, even with perfectly timed street lights and zero traffic. Even a 30-minute drive time is optimistic for much of this area! Remember that Downtown Newhall is not freeway-close, so everyone visiting this area will need to plan on some surface street travel to get there. With these overly-optimistic drive times, this part of the ROA is clearly very skewed, which could be a real deal-killer since this represents such a huge chunk of the expected revenues from this project.

This drive-time analysis is arguably the most flawed piece of the entire Retail Opportunities Analysis (ROA). With the projected revenues from the extended "15-minute" drive time population being over HALF of the entire projected income for the redevelopment area, and with the actual drive times from much of this area being closer to a 30-minute drive time, this means that the income projections in the ROA are highly overstated at best. And without sufficient income projections for the area, it’s highly unlikely that the desired retail merchants will agree to set up shop there.

Stay tuned for more! In the next installment, we’ll look at the retail merchants that the City hopes to attract to the Old Town Newhall Revitalization Project. There will be some big (and not so big) surprises here!

You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.