After a week-long visit, a panel of the Urban Land Institute presented results of a study last week recommending steps toward enhanced economic development for Hartford. For an initial report on the presentation, including panel chair Ray Brown’s entire introductory talk, go here.

Next up, after Brown, were panelists Dan Conway and Jennifer Ball, whose mission was to study market potential. Conway has 30 years’ experience as an urban land economist, and has worked for 20 years now as president and director of economics and market research for THK Associates in Aurora, Colorado. His specializes in golf course development feasibility studies. Ball is a land use and transportation planner as vice president of planning for Central Atlanta Progress, Inc., managing policy initiatives and implementation projects. She has experience with a retail projects at an architectural and engineering firm, The Preston Phillips Partnership, as well as real estate market research and analysis experience for development projects and public sector redevelopment plans with her work at Robert Charles Lesser & Co.

The series of eight questions put to the panel at the beginning of the week did not all focus on market potential, but at least one was exclusively about that subject—the question of the need for new hotel rooms—and another touched on it, regarding the implications of a new multi-use entertainment venue. The city also wanted the panel to “illustrate the type of development most likely to succeed, and to best meet the needs, of all of Hartford.”

Conway (pictured) opened by addressing everything slowly and sequentially, aiding the digestion process. First he stated a few current and projected statistics for Hartford’s metropolitan statistical area (MSA), noting that some projections hinge on the “progressive mitigation” of the city’s perceived unsafe neighborhoods and shoddy public education system, summed up by Conway as quality-of-life issues.

“The panel has come to realize that the development costs associated with delivering the identified land uses currently outweigh the demonstrated revenues,” he continued. “Without market intervention, it is unlikely the market can or will deliver the entire potential demand.” Conway went on to outline some projections in the office, retail, hotel and housing market categories.

“The panel recommends a neighborhood shopping district of up to 200,000 square feet to be constructed in the study area,” Conway said, “anchored by a [58,000 square foot] supermarket. “We would like to focus the retail development along the major thoroughfares of Main, Albany, Asylum and Farmington to connect and to enhance the already thriving retail corridors in that area.” In addition, he said, the panel envisioned another 2,000 hotel rooms needed in the city within ten years, 600 of them in the study area, boiling down to about three hotels. The transcript of Conway’s entire talk is below.

Ball followed with a brief talk about the broad direction for the city’s market potential, restricted to the study area. The panel’s recommendations center on a right-sized, reconfigured and modernized multi-use entertainment venue, as well as development of medical facilities associated with two hospitals. Rather than raze the existing civic center and reconstructing a larger one, Ball said, the success of an enhanced venue based on what’s already there seems essentially easier to predict. Regarding medical facilities, she said the panel advises “deeper market analysis” for the potential of a “vibrant medical complex” located in the study area, drawing on existing strengths. The transcript of Ball’s entire talk is below Conway’s.

Dan Conway, Hartford ULI study panelist, on market potential

Understanding the social and economic trends affecting the study area [downtown west and downtown north] helps establish the potentials and pressures for future land use.

The city of Hartford is located within the three-county metropolitan statistical area that includes Hartford, Middlesex, and Tolland counties. The population of the three-county area has experienced moderate growth, primarily fueled by modest job growth.

Today, approximately 1.2 million people reside in some 460,000 households with almost 815,000 people employed. Slightly more than ten percent of this population lives in the city of Hartford, but of even more significance is the fact that almost 15 percent of the MSA employment is in the city of Hartford.

Job growth of 12,540 new jobs per year can be projected for the Hartford SMSA, stimulating population growth annually of 7,500 people in about 3,900 households.

Assuming the progressive mitigation of previously-identified hurdles to the city of Hartford, notably the perception of unsafe neighborhoods and the quality of the public education, it is conceivable that the city of Hartford could capture almost 14 percent of the projected growth. This growth could result in an annual expansion of almost 1,030 people per year in 440 households.

The specific level and depth of future development demand, and the ability of the study area to capture it, will depend on both the visible and perceived level of success achieved in addressing these quality-of-life issues. The following estimated market potential by land use figures are based on reasonably aggressive levels of demand, assuming successful progress towards these achievable quality-of-life issues.

Further, it must be noted that the ability of the study area to fully realize and absorb the projected level of development will be constrained by the land and construction cost dynamics. The panel has come to realize that the development costs, associated with delivering the identified land uses, currently outweigh the demonstrated revenues. Without market intervention, it is unlikely the market can or will deliver the entire potential demand.

Office market potential

The metropolitan Hartford office market is defined as Hartford County. The current market inventory includes 25.7 million square feet, with 40 percent located in the Hartford central business district or its periphery.

The Hartford CBD has experienced the absorption of approximately 170,000 square feet of office space year to date in 2007, and the metro area has seen the construction of 110,000 square feet of office space. Also, class B and C office buildings are being converted to residential structures, and this will reduce the total amount of vacant office space throughout the metropolitan area.

Fifty percent of the job growth projected for the Hartford MSA will be employees housed in office space, resulting in a metropolitan demand for office space of almost 600,000 square feet per year.

One-third, or 200,000 square feet of this total, could be projected to be absorbed within the city of Hartford and its central business district.

The study area could be positioned to capture 30 percent of this projected office market, or approximately 60,000 square feet, which would be the equivalent of five office buildings that are six to eight stories in height. Twenty-five acres of the land could be potentially absorbed within the study area for office uses over the next decade.

Retail market potential

Currently, almost 9,200 households with over 23,000 people live within one mile of the study area, and that study area is likely to grow by 900 people per year. The current household income within one mile is $33,000, and $10,000 of that is spent on retail goods.

The one-mile market could conceivably support 500,000 square feet of retail space today, and could be expected to grow to 700,000 square feet over the decade. Within the study area, support exists today for about 60,000 square feet of retail space, growing to 145,000 square feet in 2013, and to almost 355,000 square feet by 2018.

The bulk of this demand is for a supermarket of approximately 58,000 square feet. The panel recommends a neighborhood shopping district of up to 200,000 square feet to be constructed in the study area, anchored by a supermarket. This retail space could be located on the ground floor— residential, or of office buildings, and also a hotel building—and these could occur throughout the study area, but we would particularly like to focus the retail development along the major thoroughfares of Main, Albany, Asylum and Farmington, to connect and to enhance the already thriving retail corridors that exist in that area.

Hotel market potential

The city of Hartford central business district has approximately 2,000 hotel rooms. The three largest are the convention center Marriott with 409 rooms; the Hilton with 392 rooms; and the Crowne Plaza with 350 rooms. The hotels in the CBD operate at approximately 62 percent occupancy, with 800,000 visitors annually.

The convention Marriott is programmed to add another 270 rooms, and a new Best Western will add 190 rooms. Considering in particular the strong assets of the convention center and the impending opening of the science center, the visitor count could grow to over 960,000 people by the end of the decade, and an additional 2,000 hotel rooms could be needed.

The study area could be positioned to capture approximately 30 percent of this total. Over the next decade, demand is likely to be created for approximately 600 new hotel rooms, including one full-service hotel, and two limited-service hotels.

Residential housing market potential

Historically, the three-county Hartford MSA, during the last decade, has averaged annually the construction of 3,800 housing units, and 600 units have been multi-family. Of this total, 150, or four percent, have been in the city of Hartford, with 50 percent of these units being multi-family.

The MSA, as a result of job growth, is projected during the next decade to have an annual demand for about 4,100 housing units, including 400 for-sale townhomes and condominiums, and 500 rental apartment units.

The city of Hartford could capture approximately 11.5 percent of the projected MSA demand, and annually, it could average 450 units, including 250 for-sale townhomes and condominiums, and 200 rental apartments.

The study area could capture approximately 55 percent of the annual average construction for 150 for-sale townhomes and condominiums, and 130 apartments, with an emphasis on workforce housing. With an average density of about 40 units per acre, with low- and mid-rise residential construction, 70 acres of land with 2,800 residential units could be built within the study area over the next decade. Up to four-story buildings would be consistent with the annual projected absorptions.

Given incomes of the new and existing households in the area, the recommended median sales price for for-sale units is $185,000, or monthly rental rates of about $950. Delivering residential product that meets target prices will be critical to the success of their sale or rental.

These types of new homes are often referred to as workforce housing oriented to meet the housing needs of office support professionals, public safety employees, teachers, and medical technicians, who are thought to be the backbone of any successful community. The potential demand for new homes within the study area must strive to serve this currently underserved market.

Further, it is anticipated that new residential development within the study area also provides an ideal opportunity for the creation of a mixed-income community that is comprised not only of workforce housing, but also more affordable and subsidized units.

This socio-economic research indicates that the community building blocks are, or will be, present in the study area to create jobs, to create housing, and educational institutions that can function in a safe environment that encourages the spiritual renewal of its residents.

Jennifer Ball, Hartford ULI study panelist, on market potential

[Many big development ideas have been proposed in Hartford.] These ideas include a range of blockbuster land uses, like a baseball stadium, soccer field, a new civic arena, a corporate campus, a college campus, or a regional shopping center.

Within a specific and unique local economy, these land uses represent one-of-a-kind, hard-to-predict proposals. As such, it’s challenging to definitively analyze the feasibility and economic impacts of the delivery of these blockbuster projects.

It is the panel’s belief that uncertainty about the market impact of these proposals, coupled with their complicated nature, has prevented large areas of vacant land within the study area from being developed. The time has come to set aside the notion of a big idea, one-of-a-kind, or similar redevelopment project in the area. It’s time to allow the market demand for a mix of more traditional land uses to be advanced.

Based on the inherent market demand detail just [presented] by my colleague, this long-stagnant and non-productive acreage should be brought back into the city’s property tax base.

The panel advocates that a policy decision be made that a multi-purpose entertainment venue that serves the city and the surrounding region is important to support the economic development goals of Hartford. Despite limited time and information, and the inherent complexities and nuances regarding predicting the financial feasibility of the construction of a new facility, the panel believes a new venue will not easily be financed.

In order to support feet-on-the-street strategies, the panel recommends that commitment be made to right-size, reconfigure and modernize the existing civic center. The enhanced venue seems very likely to attract new events that will expand the existing performance opportunities, add more busy nights to the calendar, and will continue to attract people and their money to the center city.

Hartford and St. Francis Hospitals are in close proximity to the central business district and the study area. These medical facilities have close to 1,500 beds, treat more than 70,000 patients a year, have full-time equivalent staff of 10,300 employees, and generate more than $1.1 billion each year in net patient revenue.

Due to the aging of the population, and the infrastructure of a well-connected, in-town location, the study area may be appropriate to accommodate land uses that further complement these employment centers. Uses that present opportunities in a vibrant medical complex [that] could be captured within the study area include: medical office buildings, support and service retail, hotels, congregate care housing, assisted living, and nursing care units. Given these inherent strengths, deeper market analysis of this sector is warranted.

This entry was posted on Tuesday, October 2nd, 2007 at 2:32 pm and is filed under Demographics, Development, Downtown, Education, Events, Hartford, Housing, Photos, Planning and design, Public safety, Quality of life, Studies and reports, Think tanks, Urban Compass, Urban Land Institute, Urban design.