21 ATTACHMENT 14 - Laserfiche WebLink

CC)NFIDl;N'I'L1.L 8c PR.I1 fLisC~i.I) Regency Centers -Pleasanton Vv"~ORf~ I RODLCT Evaluation of PRC Site & SalesAnalysis October 8, 2007 Page S of 10 in the Alameda County area. As a result, it will generate additional sales tax dollars for the City of Pleasanton from both market demand and recapture of leakage to other local cities. PRC estimates the new Home Depot store will benefit Pleasanton by recapturing approximately $4 million of sales leaking to Livermore and Dublin. Both PRC and Kosmont concur that the New Home Depot's presence in Pleasanton will likely not cause the existing Johnson Drive Store to close since the current market for home improvement and building materials appears to have ample marginal demand in Pleasanton for both stores to successfully operate at the same time. Kosmont and PRC agree that there is sales leakage from Pleasanton in annual sales of hardware and building materials. PRC's estimate is approximately $74.67 million and Kosmont's is $63.25 million annually (See Appendix B). The difference in values comes primarily from the methodologies used to estimate leakage. Kosmont estimates the New Store can potentially generate annual sales close to $50 million ($350/SF). Collateral to Kosmont's estimate is a projection in PRC's Analysis that the current Johnson Drive store generates annual sales of $48.3 million ($386/SF at approximately 125,000 SF). Based on Kosmont's evaluation of demand levels in the new store trade area coupled with existing leakage conditions, Consultant believes that this sales volume would be achievable without significantly impacting existing hardware stores in Pleasanton. PRC estimates that the New Store will generate annual sales of $27.951 ($195/SF), or $20 million of new sales plus approximately $7.951 million in same-store sales from the Johnson Drive location, which is reasonable assuming no leakage. Kosmont observes that approximately $63.25 million of leakage is occurring in Pleasanton, and consequently believes that the New Store would recapture these sales dollars rather than taking business from all existing stores. As such, Kosmont anticipates that overlapping sales with the Johnson Drive store will be negated by the recapture of leakage, producing a net gain. Further, Kosmont observes that future Home Depot sales will be enhanced by future demand growth in the building and materials hardware market segment. This demand growth, fueled by new households and increases in the area's average household income, will increase Pleasanton's annual sales potential for building and materials by $16.758 million over the next four years (See Appendix C). The addition of a new Home Depot to the Pleasanton market may result in some shift of sales between stores; however, Kosmont estimates any effects will be relatively small and likely temporary (1 to 2 years). The new Home Depot will recapture sales mostly from leakage of the building supply and hardware sales. As PRC's report denotes, the installation of alarge-format home improvement retailer, sometimes may actually increase business for smaller retailers because of the area's overall increase in home improvement related sales. In other words, a productive congregation of choices within a broad product range can result in increased overall activity. ?h4{ sntMy6ic w'or ausirat^~e putpnsa and ~s not a gua~ardcs d aC1W1 ardor krlwe resUls. Pmjea wo tama and tax ana+yses aro pro~eUiav ony, howl reaWb may dTar rrretenaHy hom tlwae expnnaad n trus ansiyw. kosmon 18501 Venriaa BJv4. Suite 5tl Encino CoMan+a 97a3s pn 8'ID.961.D4l1 /ax 8t8,98t.8588 www konmont.com