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feasibility of both stores remaining in business. She said PRC defined the trade area for the proposed store which is proposed to be located at Stanley and Bernal. The analysis looked at each census tract area and based on the number of households, the median household income and amount of money spent on home improvement dollars, determine what the total expenditure potential was for the trade area as well as the amount that comes from within Pleasanton and what would be the capture rate for the new store. The results were that the total expenditure potential for the trade area was $154 million. Of this $107 million is generated in Pleasanton and of that, $26 million in today's dollars would be generated by the new store and in 2009, it would be $29 million and in 2011, $33.9 million. They found that 86.6% of the new store's sales would come from inside the trade area and 13.4% would come outside the trade area and the proposed Home Depot store would have a 16% market share of the trade area. The third step was to analyze where those dollars were coming from. With the new Lowe's opening in Dublin, the City and its existing home improvement stores stood to lose $20 million in home improvement sales. That store is planned to open within the next three months. The impact on the existing Home Depot is a 20% loss or approximately $10 million in sales and a 10% loss to all other home improvement sales in town which would result in a $20 million loss. She summarized their findings as 13% of the proposed store's total sales will originate from areas outside the defined trade area. The proposed store will generate its strongest market share in the neighborhoods adjacent to the site, in the eastern portion of Pleasanton and the southwest Livermore, projected sales are the lowest in the northern portions of the trade area where the presence of competition including the Johnson Drive Home Depot and the future Lowe's is stronger, they found there would be a 15% sales transfer from the existing Home Depot so they will lose 20% from Lowe's and lose an additional 15% to the new store, as well as all other businesses would lose about 6%. She said PRC actually went into Richard Lumber and True Value Hardware and did their analysis. The majority of the other businesses were analyzed individually, and since they were regional and some small businesses, they would have minimal impact, or a 6% loss on average. Therefore, the new store, $26.3 million would result in $18.5 million of new sales or tax dollars to the City of Pleasanton. She said the Johnson Drive Home Depot is a $48 million store in annual sales. However, this is reduced to $38 million when Lowe's opens in 2008. In 2009, when both stores are open, the sales would amount to $59 million which is a 53% increase, hence the reason why Home Depot is interested in opening the store. A no-profit to Home Depot is a loss of 20% or $10 million in sales. If the project is approved it is a 22% increase or $11 million; however, because of Lowe's opening, the sales decrease initially but then it moves back up. Cumulatively, it is still 22%. Regarding the impact on the City of Pleasanton and why the City is interested in the project from an economic standpoint, Ms. Wagner said the City is at $154 million in home improvement sales. When Lowe's opens, sales will reduce to $33 million which is a 13% reduction in 2008. In 2009, with the opening of the new store, it is an $18.5 million net increase for the City and increases up to $154 million or 13.9% increase. With no project, the City, because it receives 1 % of the $20 million in sales, it is equivalent to a $200,000 lost to the City. If the project is approved, the City's net loss cumulatively is a loss of 1.3% or $2 million, or $20,000 in sales tax revenues. The impact to small businesses, which total in sales $106.2 million, is reduced to $95.3 million or 10% when Lowe's opens, with a cumulative effect of 16% loss or $16.8 million. PRC concluded that the $20 million in net new sales ($23 million minus existing store transfer) would be substantial enough to justify deployment of a new store, both stores can successfully operate concurrently, and a relocation of the Johnson Drive store to the proposed store is also City Council Minutes 7 December 4, 2007