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HomeMy WebLinkAbout2/3/2021 DMCC Collaborative Session - Presentation (Covid Impact Analysis)DMC COVID-19 Impact Analysis | 1 DMC COVID-19 Impact Analysis DMC –City –County Collaborative Session DMC COVID-19 Impact Analysis | 2 Urban Tech & Innovation Inclusive Cities Parks & Open Space Affordable Housing Urban Resilience Transit-Oriented Development Economic Development Strategy Program Design & Implementation Real Estate Development Advisory is a real estate and economic development consulting firm working at the intersection of the public and private sector.Our work transforms communities and revitalizes urban environments in the United States and abroad. Southeast Minnesota Regional Economic Study Heart of the City Peace Plaza Redesign One & Two Discovery Square Market Studies Panoway on Wayzata Bay Saint Paul River Learning Center Edina Urban Vision Symposium West Broadway Transit Alternatives Study Minneapolis Commons Park DMC COVID-19 Impact Analysis | 3 March Feb ‘21 CONTEXT As the 3rd largest city in Minnesota,Rochester’s recovery is critical for the state. CUMULATIVE COVID-19 CASES IN MINNESOTA Source: MN Department of Labor, COVID tracking, Minnesota Reformer 2010 Dec -2020 MONTHLY UNEMPLOYMENT RATE IN MINNESOTA DMC COVID-19 Impact Analysis | 4HR&A Advisors, Inc. CONTEXT Rochester’s economic recovery from COVID has broad implications for Southeast Minnesota. •Rochester is a significant in Southeast Minnesota, in part due to the DMC’s investments and future development plans. •of the 170K+ jobs in Southeast Minnesota are •31% of Downtown Rochester , the majority of whom live in other parts of Southeast Minnesota. Source: HR&A Analysis –SE MN Regional Forecasting Study, LEHD On the Map Goodhue Wabasha OlmstedDodge Winona Mower Fillmore Houston DMC COVID-19 Impact Analysis | 5 The economic recovery from COVID will take place over three stages. DMC COVID-19 Impact Analysis | 6 •There is a lot of uncertainty around the full impact of COVID-19. •Pre-COVID-19, Rochester had a growing economy.Development was largely aligned with demand. •Rochester will have excess capacity in downtown office space due to job loss and growth in remote work. •Downtown retail and restaurants that are dependent on employees and visitors will be disproportionately affected when compared to counterparts with a broader customer base. •Hotels have experienced a precipitous drop in occupancy rates. With Rochester’s hotel pipeline, the market will continue to see occupancy rates below historical averages. •Housing demand appears to be remaining relatively strong. Growth in downtown residential will help to support the core’s retail businesses. HR&A applied its economic impact findings to update the DMC Phase 2 development plans. DMC COVID-19 Impact Analysis | 7 The DMC and downtown development will need to remain nimble as economic recovery becomes clearer. •Unlike natural disasters, this pandemic hit every city in the country. However, not all are developing recovery strategies. •Despite significant losses, Rochester has faired better than other cities. •Rochester is starting its recovery from a place of strength. It had a robust and growing economy, the healthcare industry and Mayo Clinic provide stability during weak economies, and the city has the tools from the DMC to support growth. DMC COVID-19 Impact Analysis | 8 Future economic development strategies should… 1.Support development proactively 2.Prioritize public infrastructure 3.Diversify the economy 4.Support existing local businesses 5.Reuse excess real estate capacity creatively 6.Attract work-from-anywhere talent DMC COVID-19 Impact Analysis | 9 Future economic development strategies should… •Zoning and land use •Expedited entitlements and approvals •Financial incentives like TIF and tax abatements for mission-aligned development •Land banking DMC COVID-19 Impact Analysis | 10 •Infrastructure makes cities more livable and attractive •Public realm •Streetscape •Transit and mobility •Broadband Future economic development strategies should… DMC COVID-19 Impact Analysis | 11 •Rochester brand and research can help to attract spinoff jobs and adjacent life sciences industries •Leverage regional assets like the airport for potential distribution Future economic development strategies should… DMC COVID-19 Impact Analysis | 12 Future economic development strategies should… •Short-term funding focus •Restaurants located on wide sidewalks, parking lots, or public spaces adapted to outdoor eating, but were constrained in winter. •Longer-term strategies may consider: •Diversify customer base to grow demand •Business support services like technical assistance for tech adoption, marketing assistance, grants for façade and other capital improvements •Grow retail cluster to support vibrant destination DMC COVID-19 Impact Analysis | 13 Future economic development strategies should… •Urban hotels have become temporary offices, schools, emergency housing, and homeless shelters •After the Great Recession, urban cores with high office vacancy rates, low rents, and demand for multifamily housing saw some Class B/C office properties converted to residential •Property owners facing ground floor vacancies may need to reconsider their tenanting approach by lowering rents to retailers and/or creatively using spaces, like for art installations, medical offices, community centers, or product showrooms •Obsolete real estate products become prime redevelopment sites in the long-run Following the increase in COVID vacancies, the town of Southampton, NY, requires storefront owners to work with artists to show their work in windows when storefronts are vacant The historic Chocolate Works factory in Philadelphia has been converted to residential lofts. DMC COVID-19 Impact Analysis | 14 •Cities should strive to attract those with work-from-anywhere jobs •High quality-of-life will drive decisions, and include: •Affordable and accessible housing •Broadband •Amenities of city-living (e.g.restaurants and bars, walkability) and access to open space •A unique and distinct city brand •Airport access Future economic development strategies should… DMC COVID-19 Impact Analysis | 15 DMC COVID-19 Impact Analysis DMC –City –County Collaborative Session