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Town Council Study SessionSuccess of Local Business:
Main Streets and the Housing Connection
January 17, 2018
Study Session
Oro Valley’s Future
Economic Development,
Main Streets and Housing
Market Study
Lessons Learned
Future Decisions
Takeaways
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Oro Valley Community
Looking to the Future
Challenges:Approaching build‐out
Shifting land use needs
Consider:Economic development
Housing as driver
Goal:Long‐term sustainability
Growth Maturity Decline
We are here
Growth Maturity Renewal
We are here
Purpose
Be proactive and strategicUnderstand the issues
Frame future decisions
Think of economic development and land use together
Residential, office and retail are connected
Housing growth, density, diversity
Don’t sacrifice commercial and employment areas
Be smart with remaining landBe patient and make sustainable decisions
Think about new programs and flexible zoning
Housing diversity
Resident diversity
Economic sustainability
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Young Professionals
Spend more money Acquisition vs. disposition mode
Spend on commercial and retailSupports Town services
Sustains commercial areas for everyone
Drive movement in residential market
Do your kids live here? Could they if they wanted to?
Who buys your home when you want to downsize?
Complete Community
Looking to the Future
To be a well‐managed community that provides all residents with opportunities for quality living. Oro Valley will keep its friendly, neighborly character, while increasing services, employment and recreation. The Town’s lifestyle continues to be defined by a strong sense of community, a high regard for public safety and an extraordinary natural environment and scenic views.
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Oro Valley Main Streets
Looking to the Future
Community desire for a town
center
Plan now for long‐term
Address build out and growth
pressure
Enhance character and appeal
Attract young professionals
Support businesses
Use innovative programs and
zoning
Unique in Oro Valley
Location Characteristics
Many housing units within walking distance
Nearby parks and recreation
Nearby civic uses
Varied and vibrant commercial areas
Available parking and circulation areas
Interested businesses and property owners La
Cañ
ada
Lambert
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Opportunity Exists
Future Opportunity
PublicRight of way
PrivateVacant land
Parking areas
Opportunity areas
Thinking Ahead
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RESIDENTIAL AND MASTER PLANNED COMMUNITY
OFFICE (Purple)COMMERCIAL (Blue and Red)
Purpose and Topics
Main Streets Market Study
Conditions and opportunities for real estate development and redevelopment
5‐10 year timeframe
Ground policy, design and development proposals within context of market conditions
1. Executive Summary2. Context3. Site Analysis4. Housing Market5. Office Market6. Retail Market7. Parking Analysis8. Recommendations
1. Executive Summary2. Context3. Site Analysis4. Housing Market5. Office Market6. Retail Market7. Parking Analysis8. Recommendations
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All aspects are connected
Community Vitality
Residential
RetailOffice
Oro Valley Growth
Based on trends:Solid job growth
Consistent population growth
However:Community almost built‐out
Smart decisions needed for remaining land
Note: Across all land use categories, Oro Valley is 85% built‐out
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Comparison Areas
Nearby households:At least 50% more than Oracle/1st
At least 3 times more than Lambert/La Cañada
The Residential Market
Tucson Region Options
Struggle to serve first‐time homebuyer, including young professionals and the general workforce
Huge gap in pricing
Homes under $250,000
70% of resales
30% of new home salesHomes over $250,000
30% of resales
70% of new home sales
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The Residential Market
Oro Valley OptionsOne of the least affordable submarkets
New home pricing is a function of land pricing and availability
New homes – 60% higher than County
Resales – 44% higher than County
Oro Valley Residential Activity
Current Development
Healthy building activity for single‐family detached
Estimated 7 year lot supply available
Limited activity for single‐family attached
Limited multi‐family, regional demand exists
Future Development
Depends on development requests and site conditions
Developed78% of land8,221 acres21,766 units
Active and Planned
14% of land1,473 acres~2,200 units
Unknown8% of land866 acres
~3,600 units
Vacant22% of land2,339 acres~5,800 units
Residential Land(Based on Current Trends)
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Opportunities – Capture the “Missing Middle”
The Residential Market
Near term (3‐5 years)Increase residential density
Develop a variety of housing types
Target the $300k and under homebuyer to capture a larger market share
Longer term (5+ years)Add mixed‐use development
Trends and Opportunities
The Office Market
NationalOffice market in flux
Changes impacting new development:
Central business district
Densification (less space/worker)
What’s considered “Class‐A”
Tucson Region Strong performance 2005‐2007
Since 2007, higher vacancy and lower rental rates
Cautious regarding speculative office development
Oro Valley Medical office development –multi‐physician specialty offices
90,000 sf (5‐year supply) of unabsorbed office space in Oro Valley
Innovation Park and potential expansions
Future U of A Vet School
Main StreetsOffice/retail and services
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The Retail Market
NationalContinued expansion of online retailing
Shrinking retail footprints
Shifting demographics
Consumer preferences changing
Store shift from sales to services
Emphasis on placemaking
Tucson RegionNo speculative retail, need 50% commitment to get started
Retail development more dispersed
Oro Valley OverallOro Valley delivers around 22,000 sf of retail a year
160,000 sf of retail is vacant now
Main Streets AreasUndeveloped vacant retail pads
Baby boomer driven retail
Trends and Opportunities
Housing as Driver
Key Findings
Grow # of households
Increase density
Diversify types and price‐point
Attracts new businesses
Supports existing businesses
Makes alternative transportation viable
Strengthens existing employment areas
Attracts new employers
Provides options for all residents
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Rancho Vistoso
Original PAD Remaining Commercial
Rancho Vistoso
Original PAD
Current% of
Original
13,862 residential
units
9,470 unitsdeveloped or planned
68%
8%
27%
65%
COMMERCIAL ACRES
Rezoned Vacant Developed
RESIDENTIAL COMMERCIAL
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OV Marketplace
AverageOV
Marketplace
Size in sq. feet 570,789 860,000
Income within 5‐7 miles
$83,008 $89,318
Population within 5‐7 miles
211,061 129,826
Population per sq. mile
41,739 18,547
Sq. feet per person
2.9 6.2
Compared to all Vestar Properties in Arizona
OV has too much supply and not enough people
Chandler
Gilbert
Glendale
Mesa
Oro Valley
Peoria
Phoenix
Scottsdale
Tempe
Queen Creek
OV Marketplace
LocationPop. (1.5 miles)
House‐holds (1.5 miles)
Retail planned(sq. ft.)
Vacant
OV Marketplace
2,185 884 860,000250,000 sf unbuilt
Lambert / La Cañada
5,846 2,427 190,00052,600 sf unbuilt
Oracle / 1st 8,561 4,107 836,000215,000 sf unbuilt
Casas Adobes 13,241 6,208 100,000 0 sf
Compared to other Oro Valley areas
Tangerine
Ora
cle
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Oracle Corridor
Villas San Dorado274 units, 93% occupied
Encantada at Steam Pump288 units, 91% occupied
Canyons at Linda Vista Trail228 units, 93% occupied
Panera BreadChipotle Mexican GrillJersey Mike’s SubsMOD Pizza
Lessons Learned
Planning for residential
and commercial
Higher density
residential built
New and successful businesses
Lacking residential nearby
Competing commercial
areas
High vacancy and struggling commercial
Less than planned residential
built
Commercial land loses viability
Vacancy and commercial conversion
Rancho Vistoso
OV Marketplace
Oracle Corridor
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Be patient and make sustainable decisions
Takeaway #1
Opportunity for creative infill and redevelopment
Make choices that will support retail and office sectors – housing for young professionals and the workforce
Density
Variety
Price point
La Cholla Corridor
Major corridor Current capacity: 14,000 trips/ day
Future capacity: 24,000 trips/day
Development comingSaguaros Viejos
Shannon Road
Capella
Fasseas
Consider:Commercial viability
Community benefits
Tangerine
Naranja
Lambert
217 units
500 units
91 units
80 units
Apartments?
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La Cholla Corridor
Retailers will look for:
Location
# of households nearby
Traffic capacity and access
Uses aligned with the market
(Current + Planned)
La Cholla and Lambert600 units
(Current + Planned)
La Cholla and Naranja
1,100 units
(Current)La Cañadaand Lambert1,500 units (53,000 sf vacant!)
Naranja
LambertLa
Cañ
ada
La C
holla
Innovation Park and Office Areas
Land Use Analysis
Innovation Park Area12 projects built since 2000
10 acres average project size
51% of buildable land is developed or planned for development
20 year supply of land remains
Commerce / Office Park Land Use
Built‐Out
Planned Development
Remaining Vacant
Other Buildable Land Uses
Innovation Park Area
Ora
cle
Ro
ad
Tangerine Road
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Land Use Analysis
Innovation Park and Office Areas
Oro Valley Marana,
AZ
Boulder,
CO
Carlsbad,
CA
Scottsdale,
AZ
Chandler,
AZ
Population 43,565 43,474 107,167 109,004 231,200 253,098
Total Land
(sq/mi)36 121 26 39 185 65
Land Use
Emp Acres400
(2%)
9,818
(13%)
2,313
(14%)
1,424
(6%)
approx.
3%
6,135
(15%)
Land Use
Emp Built‐
Out
188
(47%)
1,473
(15%)
approx.
13%
472
(33%)
approx.
15%
3,485
(57%)
Economics of Residential and Retail
Perception: Only residents support retail
Reality: Office workers and residents offer about the same retail spending power in a single‐person comparison
Positive
• Upzoningresidential
Negative
• Downzoning commercial and employment
Commercial and employment areas:
Don’t need as many services
Serve to create synergy
Necessary for long‐term sustainability
Add housing strategically
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Future Decisions
Planning for residential
and commercial
Pressure to reduce # of housing units
?
Planning for office and
employment
Pressure to convert
employment to residential
?
La ChollaCorridor
EmploymentAreas
Think about new programs and flexible zoning
Takeaway #2
Reevaluate development regulations and zoning
Establish an overlay or redevelopment district
Fast track and incentivize varied residential in infill locations
Permit easy redevelopment of vacant big box stores
Even faster track for tech park (EEZ++)
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Summary
Be proactive and strategic
Think of economic development and land use together
Be smart with remaining land
Past Challenges
Past and Future Success
Discussion
What surprised you?
What resonates with you?
What are some actions you would like to see?
How will you use this information?
What would you like more information on?
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Takeaways
Think about new programs and flexible zoning
Reevaluate development regulations and zoning
Establish an overlay or redevelopment district
Fast track and incentivize varied residential in infill locations
Permit easy redevelopment of vacant big box stores
Even faster track for tech park (EEZ++)
Be patient and make sustainable decisions
Opportunity for creative infill and redevelopment
Make choices that will support retail and office sectors – housing for young professionals and the workforce
Density
Variety
Price point