DOWNTOWN FREDERICK RETAIL ANALYSIS April 23, 2004

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DOWNTOWN FREDERICKRETAIL ANALYSISApril 23, 2004

• H. Blount Hunter
• Retail Real Estate Research Co.

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RETAIL STUDY GOALS

• Understand current consumer base and Downtowns
  competitive positioning
• Define strengths for continued development of
  Downtowns retail mix
• Maximize return from public investment by
  leveraging infrastructure and linking activity
  centers

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Research Summary

• Area Research of Frederick region and
  competitive retail hierarchy
• Consumer Research to gain insights into
  behavior and perceptions
• Downtown Intercept Study (Quarterly)
• Regional Telephone Study (Annual)

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General Observations about Downtown Frederick

• Well-established ambiance, unique sense of
  place
• Strong entrepreneurial business environment
• Multiple consumer segments among current users
• Generally high quality of content and execution
• Low vacancy rate some rehabs needed

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General Observations aboutDowntown Frederick

• Multiple traffic generators fuel mixed-use
  destination
• Multiple development opportunities
• Market capacity to double Downtown sales volume
  with increased merchant productivity
• Generally ahead of peers but facing many of the
  same challenges and economic dysfunctions of
  other Downtowns

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Consumer Research Findings

• 69 percent regional reach with average
  frequency of 65 non-work visits per year
• Highest reach among 25 to 44 year olds
  households with incomes over 60,000
• Dining is top discretionary trip generator
  followed by shopping

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Perceptionsof Downtown Frederick

• Users like atmosphere and historic buildings
  (46) as well as Downtowns pedestrian-orientation
  (17)
• Users dislike insufficient parking (28) and
  pay parking/expensive parking (14)

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Desired Store Types inDowntown Frederick

• Most respondents desire a mix of local
  entrepreneurs and national/regional chains (58)
• 18 to 24 year olds want books and music 25 to 44
  year olds want mens/womens apparel and fine
  dining those over age 45 want books and
  restaurants

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Most Requested Merchandise Categories

• Permanent Farmers Market
• New/Used Books
• Fine Dining Restaurants
• Mens Apparel
• Womens Apparel
• Home Décor Items
• Kitchen/Cookware Items

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Fredericks Merchandise Voids

• State tax data suggests voids in Frederick
• Mens/boys and womens/girls apparel stores
• Family and infant clothing stores
• Shoe stores
• New furniture/home appliance stores
• Sports goods/toy stores
• Jewelry stores
• Restaurants with Beer and Wine Licenses

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Merchant Opportunities

• Downtown is the antithesis of the mall
• Exceptional customer service and patron
  recognition
• Emphasis on quality
• Specialization as point of pride
• Local merchants capitalizing on the brand
• Shared mailing lists and marketing
• Events and entertainment as anchors

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Establishing a Focal Point for Retail
Development

• Concentrated Retail Zone 3-4 blocks in all
  directions from Square Corner
• Double-loaded blocks
• Contiguous storefronts--no dead zones
• Some street parking with garages/lots
  interspersed within retail zone
• Major destination users/anchors nearby

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Establishing a Focal Point forRetail Development

• Carroll Creek Park offers short-term dining
  opportunity with long-term retail opportunity
• Industrial site offers opportunity to link
  Everedy Square and Square Corner
• Downtown retail zone should optimally extend
  along N. Market Street to 4th Street
  neighborhood retail or non-retail uses to be
  located from 4th to 7th Street

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Stimulating Use ofDowntown Frederick

• Expand use of Arts/Culture and
  Events/Festivals as traffic generators
• Fully tap the potential of the tourist market
• Acknowledge office/government employees as major
  contributors to the health and economy of
  Downtown
• Encourage residential development (upper floors)

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Challenges FacingDowntown Frederick

• Working with rehab hold-outs
• Guiding a balanced and appropriate merchandising
  strategy
• Creating economic tools to assist with costs of
  preparing interior spaces
• Establishing Carroll Creek Park as a place
• Integrating Carmack Jay site into context
• Dealing with perceptions/realities of parking

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Summary

• Downtown Frederick has much to celebrate!
• Downtown is an important part of the lives of the
  majority of residents in Frederick County
• Regional demographics and growth trends favor
  continued development of Downtown in key sectors
  retail, residential, office, hotel
• Downtowns functional niche is clear and
  well-established

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Summary

• Past plans have been well executed by public
  sector
• Future development should be based upon
  comprehensive urban planning and sensitive
  treatment of Downtowns historic character
• Public and private sector roles and
  responsibilities appear to be clear and balanced
  market forces are at work