HomeMy WebLinkAboutItem 5.2 DRAFT Downtown Market Study & Development Strategy 6.2.11Draft Report
Downtown Mountain View
Market Study and Development
Strategy
Prepared for:
City of Mountain View
Prepared by:
Economic & Planning Systems, Inc.
June 2, 2011
EPS #20112
Table of Contents
ES................................................................
XECUTIVE UMMARY
Introduction and Background....................................................
Downtown Progress..........................................................
Opportunities...................................................
Recommendations............................................................
1.I,BA...............................................................6
NTRODUCTION ACKGROUND AND PPROACH
Background and Policy Context....................................................
Study Area Geography............................................
Methodology and Approach......................................................
Report Organization.............................................
2.IGD................................................................
NVESTMENT AND ROWTH IN OWNTOWN
Historical Context..............................................
Remaining Development Capacity....................................................
3.DMPR............................................................25
OWNTOWN ARKET ERFORMANCE AND OLE
Office Sector...................................................
Retail Sector...................................................
Residential.....................................................
4.DPS................................................................
EVELOPMENT ROSPECTS AND TRATEGIES
Market Opportunities............................................
Assessment of Opportunity Sites...................................................
Recommendations............................................................
List of Tables
Table 1 City-Led Downtown Investments before 2000.........................................
Table 2Investment and Policy Initiatives in the Downtown (20002010)...........................16
Table 3 Revitalization Plan Area Property Assessed Value (FY 200001 to FY 200910).......17
Table 4 Population and Employment Growth, Downtown Compared to C
(20002010)................................................................
Table 5 Downtown Mountain View AM Peak Passenger Activity (20022010)......................19
Table 6 Characteristics of Downtown Parcels Facing Castro Street...................................
Table 7 Projected Land Use Growth...................................................
Table 8 Mountain View Top Private Employers.............................................
Table 9 Office Market Indicators, Q3 2010.............................................
Table 10 Downtown Office Tenant Mix...................................................
Table 11Shopping Centers/Districts within 25 miles of the Mountain View
Table 12Taxable Sales by Category and Year.................................................
Table 13 Summary of Downtown Retail Sales by Category........................................
Table 14 New Retail Establishments Since 2005.............................................
Table 15 Downtown Establishments by Category and Percentage of S
Table 16 Pedestrian Intercept Survey Results..............................................
Table 17 Condo Median Sales Price and Transactions..........................................
Table 18 Comparison of Mountain View 2010 Foreclosure Rates.........................................39
Table 19 Examples of Businesses in Successful Downtown Areas........................................43
Table 20Key Opportunity Sites Summary...........................................................
Table 21Potential Financing Mechanisms and Sources for Downtown Revitali
List of Figures
Figure 1Downtown Precise Plan........................................................
Figure 2Downtown Mountain View and Planning/Analysis Districts....................................10
Figure 3 Downtown Underutilized Parcels...............................................
Figure 4Downtown Opportunity Area and Underutilized Parcels........................................4
ES
XECUTIVE UMMARY
Introduction and Background
Downtown Mountain View Market Study and Development Strategy
This (Report) provides a
focused market assessment and evaluation of potential business d
Downtown Mountain View. The Report identifies opportunities and strategies that support the
Downtowns success as a civic, community, and commercial focal p
of ongoing changes in the regional and national economy. The Report provides a sequel to the
Market Feasibility Study and Development Strategy Report
prepared in 1999 (1999 Report) that
described the then current market conditions and provided a set of goals and recommendations
to advance the Citys Downtown planning and revitalization effor
While significant progress has been made over the intervening ten-plus years and the Downtown
has solidified its market position and performed well by most me
its economic potential. Indeed, many of the issues and opportun
Thus, the earlier work continues to provide an important referen
planning. This new Report builds on the 1999 Report, describing progress over the last ten-plus
years and identifying additional opportunities in light of evolv
the wake of the Great Recession and the Citys emerging policy o
General Plan 2030 Update
Regarding the City policy context, the Report coincides with the
which will set the framework for land use in the City over the n
of the Mountain View Revitalization Authority Plan in 2013. The Draft General Plan 2030 Update
is considering policies designed to enhance the Downtown, such a
and linkages with key change areas elsewhere in the City (e.g., Moffett Blvd). The Mountain
View Revitalization Authority which has been the catalyst for do
40 years, using property tax increment revenue to finance its ac
after which tax increment revenue (beyond what is needed to cove
be available.
Downtown Progress
The Downtown has been the focal point of a great deal of plannin
and revitalization efforts during the past 40 years. During this period the City has invested over
$120 million in public and civic improvements in the Downtown. In addition to these direct
investments, a range of planning and revitalization efforts have been underway including
(1) advancing Downtown planning and design efforts through the D
amendments, (2) establishing business improvement districts and
maintenance district, (3) working with, and in some cases assist
with new development and property improvements, (4) continuing l
business community and tenant recruitment, and (5) marketing and
programs and special events.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
During the past ten years Downtown Mountain View has experienced particularly strong
economic growth, despite the effects of the Great Recession (com
2008) as it has played out at the end of this period. Specifica
developments over the past decade include, but are not limited t
Assessed valuation of the Downtown has increased by 182 percent,
construction, renovation, and re-sales of property.
The number of housing units has increased primarily through incr
development of under-utilized parcels, resulting in almost 300 n
Downtown since 2000, according to the 2010 Census
Transit service and ridership in the Downtown has improved, sign
service and station area enhancements at the Caltrain Transit Center. For example, Caltrain
ridership at the Downtown Transit Center has increased by about
this station consistently reports the third highest usage of any Caltrain Station behind San
Francisco and Palo Alto.
Downtown employment levels are estimated to have increased by ov
nearly 1,000 new jobs.
Retail sales have increased by nearly 60 percent, with increased
retail and personal services augmenting the strong dining and dr
While office vacancies have remained high in the region in the wake of the recession, the
Downtown office market is currently the tightest it has been sin
slightly below 4 percent.
Overall, Downtown Mountain View currently exhibits a high level
as a successful Central Business District (CBD) with a healthy mix of residential, commercial,
civic, and cultural uses serving the City and broader region. The Performing Arts Center, Library,
City Hall, Eagle Park, city-supported events (e.g., weekly farmers market, Thursday Night Live),
and improved transit service have all strengthened the Downtown
and shopping destination and community amenity. Indeed, only a handful of locations in the
Peninsula, if not the entire San Francisco Bay Area, provide a comparable mix and depth of
retail, residential, and office activity with excellent transit
single neighborhood or district.
Opportunities
Despite significant progress over the last decade, there remain opportunities for improvement in
Downtown Mountain View, further leveraging its unique setting an
in the EPS 1999 Report. These goals were (1) improving the physical environment through
renovation and redevelopment, (2) diversifying the type and mix
quality of retailers to increase overall sales performance, and (4) expanding the scale of
businesses to support a critical mass, especially in desired c
opportunities are summarized below for retail, office and reside
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Retail
There exist a variety of opportunities to build on the foot traf
Downtowns office market, civic uses, and the regional draw of the eating and drinking
establishments. Although Downtown appears busy during both th
based on the number of people on the street, pedestrian intercept surveys suggest that a
large proportion (i.e., about 40 percent) of the traffic is rela
related purposes. Moreover, about 80 percent of the retail traf
drinking. Meanwhile, a variety of retail categories, including
home furnishing, accessory and décor establishments, are increasingly attracted to
successful downtown settings because of the significant amount of casual browsing and
window shopping that can exist in these environments.
While the City has long targeted an additional grocery store in the Downtown, market trends,
local competition (existing community shopping centers), and sit
adequate parking) may make such a retailer difficult to attract. In addition, if a full-service
grocery offered a strong selection of prepared and carry-out food options it would likely
directly compete with the Downtown dining establishments.
The addition of several high-profile branded retailers in categories other than eating and
drinking could draw a different type of visitor to the Downtown,
consumer base and sales performance. Presently two of the three national retail tenants in
the Downtown (Starbucks, Subway, and CVS Pharmacy) are food and beverage- related.
Attracting other types of regional and/or national credit retailers to the Downtown is also
likely to make the redevelopment of several underutilized opport
from both a market and financial perspective. The advantages of such retailers need to be
balanced against the need to keep the area unique by maintaining
The Citys planning and public investments have helped to stimulate substantial private
sector renovation with a corresponding upgrading of tenants over the past decade.
Identification of under-performing retail space and evaluation of obstacles to improvement
and expansion can lead to further improvement of the existing bu
important to note that most regional and national retailers require larger space as well as
certain levels of foot traffic before they move into a new neighborhood. Given that
Downtown appears to possess a significant level of foot traffic, a lack of quality space
appears to be the biggest impediment.
Office
The Mountain View Downtown office market clearly benefits from its location in Silicon Valley and
affiliation with the Citys prominent high-tech companies. Alth
high-tech companies are located in business parks elsewhere in t
national recognition that, combined with amenities such as transit and a Main Street format,
has helped to make the Downtown one of the top office submarkets in Silicon Valley, if not the
entire Bay Area. For example, based on such market indicators a
Downtown Mountain View ranks only behind San Francisco and Palo
offer a mixed-use, downtown-oriented environment (e.g., dining, transit, housing). The
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
amenities and environment offered by the Downtown appears to be especially attractive to
smaller technology oriented tenants and start-ups, many of whom are priced out of Palo Alto.
A variety of Downtown market indicators, such as tightening vaca
suggest strong opportunities for expanding this sectors presenc
forward is identifying and assembling appropriate sites for new
light of existing financial hurdles, (e.g., tight capital market
the extent that growing office demand can be accommodated with n
reinforce the Downtowns role and profile as a one of the higher-performing and in-demand
CBDs in the entire Bay Area, especially for high-tech startups. This will, in turn, provide spill-
over benefits for both the Downtown retail and residential markets.
Residential
While market conditions for higher-density residential developme
has been an integral part of the re-emergence of Downtown Mounta
years. Over the long term, high-density housing (e.g., condomin
apartments) will continue to be a successful component of the Do
and redevelopment efforts, driven by regional growth pressures and strong locational attributes
and amenities (e.g., adjacent to transit, retail, and employment options). Residential
development also provides the added benefit of improving the overall financial performance of
mixed-use projects and, once built, increase pedestrian activity
sector.
Recommendations
Although long-term market forces are expected to play a positive role in taking advantage of
market opportunities, continued City involvement will also be ne
require amendments to existing land use requirements codified in
related to parking standards and/or building density (e.g., Floo
might improve development economics at certain locations. In addition, the City may also be
able to facilitate office and retail development through assistance in land assembly. Specific
recommendations include:
1.Continue Investments in Public Amenities, Programming, and Facilities.
The
Downtown has greatly benefited from the substantial public inves
past two decades. As a part of opportunity site development, th
infrastructure and place-making investments including public space and amenities (e.g.,
st
parks, plazas, public art), streetscape and gateway improvements, 21 century infrastructure
including telecommunications (e.g., broadband and wireless acces
parking capacity. In addition to physical improvements, other i
including improved transit service, expanded BID program activit
Downtown marketing efforts, will be beneficial. Ongoing activit
Thursday Night Live, the weekly farmers market, and Performing Arts programming should
also be sustained. To accomplish this, the City will need to es
of new funding sources and a mechanism, especially with the expiration of the Revitalization
Authority.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
2.Identify and Recruit Desired Tenants.
The City should continue tenant recruitment and
marketing actions targeting tenants that are likely to complemen
Downtowns profile as a vibrant mixed-use district with a range of cultural, entertainment,
civic, commercial and residential uses. The notion here is to pursue a range of tenants that
complement existing Downtown uses or serve expected increases in employment-based or
regional demand for retail goods and services. The demographic profile of Downtowns
diverse user groups, including office workers, residents, eating
as participants in the Downtowns civic, cultural, and entertainment activities, present an
attractive market for a variety of retail tenants. Many of the Downtown residents, workers,
and visitors are young with a relatively high level of disposable and/or discretionary income
dedicated to more casual, incidental, or even impulse-related co
tenants in the apparel as well as a variety of specialized home
décor categories actively target this market segment and, if suc
Downtown, would further expand its offerings and market draw.
3.Harmonize Other Citywide Efforts with Downtown Development Objectives.
The City
is currently involved in a number of ongoing planning efforts in
Update (and its village concept), related revitalization of ex
Housing Element, ABAGs Regional Sustainable Communities Strateg
Boulevard initiative. The City should seek to harmonize these e
they support, or are at least compatible with, its goals for the Downtown. For example, the
role and function of potentially competitive retail areas identi
Update process, such as San Antonio Center or North Shoreline Boulevard, should be
addressed in the context of Citywide market dynamics to ensure that the Downtowns role is
not diluted.
Generally speaking, the City should seek to preserve clear market distinctions within its
various retail districts in order to support the success of each
and supportable retail sector citywide. The Downtown has a uniq
competitive advantage in a number of areas, differentiating itself in the Peninsula as an
eclectic, trendy, mixed-use place with an authentic urban vibe
need to appropriately plan several of the other Focus Areas defined in the General Plan
Update to ensure they do not undermine the Downtowns market pos
4.Evaluate and Prioritize Development of Opportunity Sites.
Six significant opportunity
sites totaling over seven acres have been identified as a part of this development strategy
effort. Each of these sites has potential for redevelopment tha
Downtown development objectives. However, the level of actual d
and related development feasibility may vary considerably, along with the relative
contribution of the project to broader Downtown development objectives. Accordingly, an
effort should be undertaken to establish priorities for the opportunity sites focusing related
marketing, investment, and development efforts on those with the
highest potential benefit to the City. Again, it may be necessa
Precise Plan in order to effectively incentivize development at these opportunity sites.
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1.I,BA
NTRODUCTIONACKGROUND AND PPROACH
This Report provides a focused market assessment and evaluation of potential business
development strategies for Downtown Mountain View. It has been
Planning Systems, Inc. (EPS) for the City of Mountain View, with the primary goal of identifying
opportunities and strategies that continue to support the Downto
community, and commercial focal point for the community once the
Plan effectiveness time limit sunsets in 2013. The Report also seeks to understand and respond
to recent and ongoing changes in the regional and national economy and their potential impacts
on the Downtown.
In 1999 EPS completed a Market Feasibility Study and Developmen
Downtown that described prevailing market conditions and provided a set of market-driven goals
and recommendations to advance downtown planning and revitalization efforts. While significant
progress has been made over the last ten-plus years and the Downtown has solidified its market
position, in a number of respects it has yet to fully realize its economic potential. Indeed, many
of the issues and opportunities identified in 1999 are still val
an important resource for ongoing strategic planning. Rather th
findings and recommendations, this Report attempts to build on t
progress over the last ten-plus years and identifying additional opportunities in light of evolving
economic realities.
Background and Policy Context
Economic and Policy Context
The Report had been prepared concurrently with a variety of other studies and efforts designed
to inform policy and provide direction at a critical juncture for both the Downtown and City as a
whole. This and other City studies and planning efforts are occurring as both the national and
regional economy appear to be emerging from the deepest and most
the Great Depression. Not only has this so-called Great Recession changed the economic
environment facing property owners, developers, and commercial tenants with existing or
potential interests in the Downtown, it is also contributing to
budget cuts and/or taxes) at the State and federal levels with l
of local programs and services.
In addition to this economic and fiscal context, this study coincides with two policy-related
developments with direct implications for the Downtown: (1) the
which will set the framework for land use in the City over the n
expiration of the Mountain View Revitalization Authority Plan in 2013. The Draft General Plan
2030 Update is looking at policies to enhance the Downtown, such
1
connections and linkages with key change areas elsewhere in the City (e.g., Moffett Blvd.).
1
North Bayshore Area,
The General Plan Update identifies the following five (5) major
East Whisman Area, El Camino Real, San Antonio Area, and Moffett Boulevard.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
The Mountain View Revitalization Authority, established in 1969,
downtown investment over the last 40 years, using property tax increment revenue to finance its
activities. After 2013, the Authority can no longer use tax increment revenue (beyond what is
needed to cover existing debt) and it is already unable to issue new bonds to finance public
2
investment.
Other relevant studies and policy efforts with particular releva
following:
Downtown Precise Plan
. The Downtown Precise Plan, adopted in 1998 and amended
several times since then (most recently in 2004), serves as the
document for development and land use in the Downtown. The prim
Downtown Precise Plan is to provide a coherent framework for downtown development and
preservation, which will guide future private-sector actions. To this end, the Precise Plan
provides relatively proscriptive standards, guidelines, and building prototypes for ten
separate subareas in the Downtown, some down to the block level.
Report will explore if and how certain provisions or requirement
Plan might be revised in order to further incentivize desired de
Downtown Parking Study
. The City has commissioned an extensive study to develop
parking management strategies for the Downtown. In addition to
parking demand and supply dynamics, this study will evaluate the
parking structure to expand off-street parking in the Downtown o
surface lots.
Downtown Grocery Story Studies
. The City has commissioned several studies that
examine the viability of a supermarket or specialty grocer in the Downtown. Although the
EPS 1999 Report identified a specialty grocery tenant, especially one focused on the higher-
end and/or natural niche (e.g., Whole Foods, Trader Joes, or Andronicos) as a potential
opportunity, to date such a project has yet to materialize.
Business Improvement District (BID) Study
. The City is intending to retain a consultant
to help in formulating a long-term strategy for two Downtown BIDs that focuses on a
comprehensive public and private funding plan to offset maintenance and operations costs
once the Revitalization Authority sunsets in 2013.
Key Study Objectives
The timing and purpose of this Report are motivated by a number
including the following:
2
As of the writing of this Report, the State legislators were considering a proposal by Gov. Jerry
Brown to eliminate Redevelopment Agencies as one way to help bal
status of this proposal and its potential implications for the M
remain uncertain.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Ensure that the City has a blueprint or action plan and strategy for building on the
momentum and continuing the success of the Downtown after the Re
sunsets in April 2013.
Understand and adapt to the changing market environment of the post-Great Recession era
and its implications for the Downtown, especially for retail.
Designate specific catalytic opportunity sites within the Downto
developed are likely to have positive economic and urban design-
identify corresponding public actions, if any, that are likely t
Identify critical actions in the Downtown requiring the resources and/or powers of the
Revitalization Authority that should be taken in the short term
example, the Authority may want to proceed with the possible acq
properties to facilitate the development of catalytic opportunit
Ensure that the policies and implementation efforts associated w
Update are consistent with (i.e., do not damage) the long-term r
economic vitality efforts in the Downtown.
Assess the feasibility of growing and diversifying the Downtown
market performance.
Study Area Geography
The Downtown Precise Plan boundary, as amended in 2004, is the p
for this Report. In the 2004 Downtown Precise Plan, the City dr
natural division of land use, building scale and activity that d
surrounding, mostly single-family residential, neighborhood. Th
Figure 1
Downtown Precise Plan are illustrated in and include the Historic District, the core office
area in the middle of Castro Street, and the new Civic Center and City Centre mixed-use project.
Although the Downtown Precise Plan boundaries represent the prim
draws on data and information from a variety of sources with overlapping but not identical
boundaries. For example, the boundaries for the Revitalization
different than the Downtown Precise Plan, which in turn differ from the BIDs, as well as
information from the Citys General Plan Update and the U.S. Census. The geographic
relationships between the Downtown Precise Plan boundary and other boundaries considered in
Figure 2
this Report are illustrated in and further described below:
U.S. Census Tract 5096.00
: This Census Tract has been identified as most applicable to
the Downtown, although it is slightly larger than most of the ot
evaluated. The 2010 Census provides the most up-to-date and accurate demographic data
Figure 2
available at a relatively refined geographic level. As shown in, Census Tract 5096
is inclusive of but extends beyond the Downtown Precise Plan bou
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Figure 1
FRONT LN
MINTON LN
02004008001,200
Feet
CalTrain and Light Rail
Precise Plan
Parcels
9
10
Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Revitalization Authority Plan Area
. The Plan Area covered by the Revitalization Authority
comprises 16 City blocks bounded to the north by Evelyn Avenue, View Street to the east,
Mercy Street to the south and Franklin Street to the west. In a
increment generated within this area, the Authority has and cont
variety of investments including public infrastructure, marketin
activities, and affordable housing. The Authority boundaries are generally smaller and
contained within the Downtown Precise plan, although a small corner falls outside of it.
Business Improvement District.
There are two BIDs in the Downtown although the
geographic area of one is inclusive of the other. Both BIDs are primarily funded by
businesses located within the districts and provide funding to t
Association who markets and promotes Downtown. The largest BID
matches but differs slightly from the Downtown Precise Plan.
Parking Maintenance Assessment District (PMAD).
Inside this area, the City is
responsible for the development of off-street parking facilities and may collect fees to cover
the operations/maintenance costs associated with them. Property
pay an assessment based on land-use and parking requirements. The PMAD is smaller and
contained within the Downtown Precise Plan.
Methodology and Approach
This analysis relies on a variety of information sources and research techniques described and
referenced as appropriate throughout the Report. The primary re
include, but are not necessarily limited to:
Reviewing parcel data from the County assessor and other sources
Analyzing investment activity, projects, and initiatives over th
both the Revitalization Authority and other entities.
Reviewing real estate market data from local brokerages and other online sources.
Conducting field surveys and site visits to the Downtown.
Reviewing demographic data for downtown from the U.S. Census and other online sources.
Reviewing taxable sales data for retail businesses in the Downto
Interviewing local stakeholdersincluding private business owners, real estate brokers, and
city staff and other public agenciesabout specialty retail, grocery stores, and independent
stores in the Downtown and future opportunities for these uses.
Reviewing recent technical studies prepared for the City related
trends, and other market or real estate-related topics.
Reviewing tenant mix data from the Downtown Business Improvement
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
The above information and analysis has been combined with EPSs in-house background and
expertise to develop conclusions regarding the long-term market
strategies for the various land uses under consideration. The actual amount and type of
development that can occur will depend on a variety of factors, many of which cannot be
predicted with certainty or are beyond the scope of this analysis. These include the intentions
and capabilities of individual property owners or developers, the direction and timing of future
business cycles, local land use policies and requirements (inclu
neighboring jurisdictions), and local, State or federal programs
Report Organization
This Report is organized into four chapters, including the execu
Chapter 2
introduction which summarizes the purpose, policy context, and study approach.
documents historical and existing land use and demographic condi
Downtowns development capacity based on existing physical condi
Chapter 3
regulations. provides a market assessment for retail, office, and residential uses.
Chapter 4
evaluates the implications from the previous chapters for poten
development opportunities as well as business retention and attraction strategies consistent with
community goals for the Downtown. Several technical appendices are provided with background
data, exhibits, and detailed calculations.
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2.IGD
NVESTMENT AND ROWTH IN OWNTOWN
This chapter documents the level of investment and growth in Dow
last ten years and assesses its capacity to accommodate further
land uses. The analysis is designed to provide a point of comparison and performance
assessment given the conditions and goals described in the EPS 1
Development Strategy Report and identify key parameters affectin
Historical Context
Like many Downtowns, the history and economic evolution of Downtown Mountain View is
closely linked to its location and relationship to transportation infrastructure and trends.
Specifically, the Downtowns proximity to both El Camino Real an
along the Central Expressway helped it become a center for civic
As Californias oldest and longest road, El Camino Real served as the States original trade and
transportation corridor, connecting the States 21 Franciscan mi
prominence as a trade and passenger corridor evolved with the emergence of the rail road
th
toward the end of the 19
Century. In 1888 a train depot was built along what is now Eve
Avenue, to serve the old San Francisco and San Jose Rail Road.
resurgence in the early 20th century when the State designated it a key route in its effort to
create a unified highway system for auto travel.
Mountain View was incorporated in 1902 as an agricultural community with a compact business
core centered along Castro Street and surrounded by farms, orcha
agriculture-based uses. Bookended by El Camino Real at the south and a rail depot to the north,
Castro Street was a logical target for the commercial and public
paved the way for Downtown development. For example, in 1905 Farmers and Merchants Bank,
which would later become Bank of America, first opened on Villa
cornerstone of the Citys first town hall, library and jail was
California and Castro Streets.
Another historically significant transportation investment affecting the evolution of the Downtown
was the improvement of Highway 101 as a limited access freeway starting in the 1960s.
Gradually Highway 101 replaced both El Camino Real and the rail
convenient transportation corridor for shoppers and regional commuters. The advent of the
automobile, and with it more convenient auto-oriented shopping m
Downtowns position as a key regional commercial district servin
regional travelers.
By the late 1960s the City recognized the economic position and performance of the Downtown
had declined significantly even as the Citys population had exp
next 40 years the Downtown became a focal point of a great deal of planning, design, public
investment, and other efforts designed to support its revitaliza
initiated in 1969 when the City Council established the Mountain
with a primary goal of revitalizing the downtown area. Subsequently, in 1988, the City approved
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
the Downtown Precise Plan to articulate comprehensive developmen
and private investment. The Downtown Precise Plan has since bee
summarized below.
Date Amended Summary
February 29, 2000 Updated land use and development standards in
peripheral area surrounding the Historic District
(i.e. Areas A though G)
April 24, 2001 Incorporate sign requirements and design
May 25, 2004 Formalized the Historic District; updated land use
and development standards in Historic District and
area south of Mercy Street (Areas H, I, and J).
Downtown Planning and Investment before 2000
The EPS 1999 Report in particular was completed following a peri
investment in the Downtown, primarily through City and Revitaliz
Table 1
summarized in below. In addition to these direct investments, the City imple
wide range of revitalization techniques, including (1) advancing
3
efforts through the Downtown Precise Plan and other efforts, (2) establishing business
improvement districts and a downtown parking maintenance distric
some cases assisting, Downtown property-owners with new developm
improvements, (4) continuing liaison to the Downtown business co
recruitment, and (5) marketing and sponsoring Downtown programs and special events.
Table 1
City-Led Downtown Investments before 2000
Cost
(in Millions of $s)
Project
Library$20.0
City Hall/Civic Center $40.0
Eagle Park & Pool $2.5
Castro Street Improvements $13.0
Parking District [1]$9.0
Contribution to Transit Center$15.0
Evelyn Avenue Improvements $1.4
Total Investment $100.9
[1] Includes parking garage and renovation of surface lots.
3
Since the inception of the Authority, several citizen advisory
advise the City Council on activities in the Downtown. The curr
12 members that include property and business owners, at-large members, and one Councilmember.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Despite significant public planning and investment, there was a
was not performing up to its potential, especially in the retail
was prepared in response to that. Specifically, the retail dist
diversity and quality typical of highly successful commercial di
relatively low sales performance. For example, the retail taxable sales of Downtown retailers
averaged about 45 percent of national (Urban Land Institute) standards, while restaurant sales
were at about 80 percent, and there were few if any national credit retailers. Within this context
the 1999 EPS Report defined a set of market goals for the Downtown focused in the following
areas:
Renovation
. Improving the physical quality and attractiveness of downtown
storefronts.
Diversity
. Diversifying the current concentration of businesses to include a broader range of
retail goods and services.
Quality
. Improving the quality of retailers by attracting national credit retailers and other
high-value retailers and entertainment-oriented businesses that
improve overall sales performance.
Scale
. Expanding the scale of retail businesses in the Downtown to improve critical mass,
especially in desired clusters of business types. This includ
for downtown, which could include mid-sized retailers or a clust
collective drawing power equivalent to a larger anchor to complement the smaller and local
retailers that predominated.
Downtown Planning and Investment (2000 – 2010)
Over the past decade, the City has continued toapply a variety of revitalization tools although
direct capital investment has been less significant than previou
sector activity appears to have elevated relative to previous periods especially in the commercial
Chapter 3
sector, as described further in . With a few exceptions, the City and Authority have
focused on smaller-scale public improvements, programs, and policies to supplement the capital
projects built before 2000 and to facilitate ongoing private-sec
Table 2
As summarized in , the more significant projects associated with the Downtown over the
past decade are (1) assistance with land assembly necessary for
140,000-square-foot Tishman Speyer office building at Castro and California Streets;
(2) completion of a four-story, five-level parking garage at California and Bryant Streets, which
includes a 14,000-square foot retail space currently occupied by
associated with the Downtown Transit Center including Centennial Plaza and Train Station. In
addition, the Authority has continued to support a variety of smaller-scale programs and
initiatives related to retail tenant recruitment, building façad
invested since 2000), streetscape elements (e.g., trees and kiosks), and affordable housing
development.
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Table 2
Investment and Policy Initiatives in the Downtown (2000–2010)
City Led Investments and Other Efforts
Private Development Projects
Public ImprovementsPrograms / Policies / Studies
140,000 sq. ft. Tishman Speyer office
Bryant St. 5 deck parking garageAmendments to Downtown Precise P
building @ Castro St. and California St.
Affordable Housing Investment (e.g., 51 Sidewalk Café Ordinance Amended to 32,150 sq. ft. office building @ 100 W.
unit Evelyn project)include side-streetsEvelyn Ave.
Transit Center (multi-purpose) for Light Façade Improvement Program Grants 30,000 sq. ft. office building @ 401 Castro
Rail, VTA, & CalTrain( $150K )St.
20,000 sq. ft. office/retail building @ 303
Centennial Plaza openedSupport for Downtown Sign Ordinance
Bryant St.
City sponsored events (i.e. Farmer's
Castro Streetscape improvements 20 residential units @ 364 Bryant St.
Market, Thursday Night Live)
Downtown Market Studies (Grocery
Alleyway improvements 44 Condos @ 100 Bryant St.
store, parking, economic strategies)
On-going marketing, promotions,
26,600 sq. ft. office building @ 800
Downtown Signage Programoutreach, and liaison (i.e., corporate
California St.
tours, tenant outreach and solicitation),
Support for Central Business Association Prometheus Development of 39
Castro street tree replacement
(CBA)rowhouses @ 125 W. Dana St.
Other miscellaneous investments
¤ New benches & trash cans
Retail building façade renovation @ 142-
¤ Steps Caulking/Bomanite
156 Castro St.
¤ New light fixtures
¤ Kiosks
Mountain View Hotel Redevelopment
14,000 sq. ft. Longs Drugs (now CVS)
3-story mixed-use building @ 155 Castro
St.
City Center Residential Development
(Phase I/II)
Prometheus Development (Minton's) -
203 rental apartment units (under
construction)
50,000 sq. ft. office building developed by
PSAI Realty @ 100-200 W. Evelyn
(proposed)
63,000 sq. ft. office building developed by
Daniel Minkoff (proposed)
Classic Communities - 65 attached &
detached residential units (proposed)
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Other Development Activity and Growth
In addition to actions associated with the Revitalization Plan goals, other private- and public-
sector entities have continued to make investments or otherwise expand their presence in the
Downtown. Although detailed data is difficult to come by, the i
value (AV) in the Revitalization Plan boundaries provides some indication of the level of
investment, development, and other financial transactions that have occurred. For example, the
total Plan Area AV increased by 182 percent or at an annual rate of 12 percent between 2000
Table 3
and 2010, as shown in . This compares to the maximum allowable increase in AV of 2
percent per year for property that is not resold (i.e., changes ownership) or undergoes
substantial renovation and improvement.
Table 3
Revitalization Plan Area Property Assessed Value (FY 2000–01 to FY 2009–10)
Total Assessed
CategoryValueAnnual %
Fiscal Year
2000-01$156,026,173
2001-02$197,824,92127%
2002-03$220,568,26211%
2003-04$266,741,40721%
2004-05$290,505,4449%
2005-06$329,948,97514%
2006-07$361,832,10810%
2007-08$373,288,2593%
2008-09$445,489,84519%
2009-10$439,398,340-1%
2000 - 2009 Growth
#$283,372,167
% 182%
Avg. Annual12%
The increasing private-sector activity in the Downtown over the
supported by available data on population and employment levels.
with the 2010 Decennial Census and General Plan 2030 Update repo
1,110 jobs in the Downtown, an increase of 8 percent and 22 perc
Table 4
compared to 4 percent citywide (see ). The level of job growth is especially impressive
given that the time frame compares a business cycle peak in 2000
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Table 4
1
Population and Employment Growth, Downtown Compared to Citywide (2000–2010)
DowntownCity-Wide
Growth (2000-2010)Growth (2000-2010)
Avg Avg
20002010Amount%Annual20002010Amount%Annual
Category
Total Population [1]3,3333,6042718%0.8%70,70874,0663,3585%0.5%
1,6641,722583%0.3%31,15931,9577983%0.3%
Households [1]
Single Family Households [2]810640-170-21%-2.3%13,84611,571-
Multi Family Households [2]8541,08222827%2.4%17,31320,3863,0
Total Jobs (Place of Work)
4,9646,0761,11222%2.0%59,32061,4642,1444%0.4%
[1] Data based on the Dicennial Census (2000 and 2010). The area
Figure 2).
[2] Total households were proportioned to Single and Multi Familowntown Super District
Figure 2
in 2009 for the General Plan Update EIR (see ).
Another public investment that appears to have significantly impacted the Downtown,
particularly commute patterns of local residents and employees,
Table 5
Caltrain Bullet Train in 2004 with increased stops at the Transi,
total ridership has grown by almost 87 percent since 2002, experiencing its biggest annual jump
in 2004, with almost 600 new morning peak passengers (a 46 perce
2004, the Downtown Transit Center has consistently reported the
Caltrain Station (San Francisco is #1 and Palo Alto is #2). Of
ridership data suggest that increasingly, more and more passenge
Mountain View in the morning, presumably to go to work, rather t
employment destinations elsewhere. This pattern is evidence of
employment hub in the region. The Downtowns growing role as a CBD also has positive
implications for the retail district since workers represent pot
Whether leaving or arriving, the Caltrain commute patterns demon
orientation to northern Silicon Valley, the Peninsula, and San Francisco rather than locations to
Appendix A
the south. As further illustrated by more detailed ridership da, cities
ranked directly below Mountain View for overall ridership (San J
#5) have the opposite commute pattern; most riders are getting o
and Millbrae in the morning. Even for those cities with higher ridership (San Francisco and Palo
Alto), the Downtown Mountain View station appears to be trending
than out-commuting. While Palo Alto and San Francisco have decr
passengers arriving in their cities each weekday morning since 2002 in Mountain View this
proportion has increased. Specifically, the Downtown Transit Ce
of passengers arriving in 2002 to 53 percent in 2010 while San F
from 75 percent to 70 percent and 76 percent to 73 percent, resp
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Table 5
Downtown Mountain View AM Peak Passenger Activity (2002–2010)
2002-2010
Category200220032004200520062007200820092010%
#
Northbound
On5905959491,0461,0451,1091,1291,2271,10851887.8%
Off171134127130135139151145117-54-31.6%
Total7617291,0761,1761,1801,2481,2801,3721,22546461.0%
Southbound
On86918694931051181391082225.6%
Off5374506987351,0471,1261,1971,3101,254717133.5%
Total6235417848291,1401,2311,3151,4491,362739118.6%
Total
On6766861,0351,1401,1381,2141,2471,3661,21654079.9%
Off7085848258651,1821,2651,3481,4551,37166393.6%
Total1,3841,2701,8602,0052,3202,4792,5952,8212,5871,20386.9%
Source: Catrain Annual Passenger Counts; Economic & Planning Sy
Remaining Development Capacity
Although Downtown Mountain View currently has few vacant propert
land uses do not reflect the maximum amount of development allow
Plan. For example, many of the parcels along Castro have been developed as one- to two-story
buildings and may have the potential to be redeveloped into high
Plan generally allows up to four stories in the Historic District). In addition, the largest land
owner in the Downtown is the City itself, with about 26 acres of
total land area within the Precise Plan boundaries including ten
4
which may have potential to accommodate vertical development over time.
Although in terms of physical capacity the Downtown could accomm
new development, in reality future development will depend on a
economic trends and their impact on development feasibility, community support, and the
ongoing success of revitalization efforts pursued by the Authori
sector. Estimating actual growth potential given these uncertainties presents a number of
challenges but can be informed by detailed review of existing la
below.
Parcel Configuration and Ownership Patterns
The EPS 1999 Report documented a number of barriers affecting re
Downtown, most of which were related to existing property owners
Although some progress has been made in terms of parcel assembly
designed to accommodate new tenants, many of the previously identified challenges remain.
4
This includes 8.2 acres for the Civic Center complex.
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Table 6
To illustrate how existing conditions continue to affect redevel
provides information on the parcels along Castro Street, the commercial spine of the Downtown.
Table 6
Characteristics of Downtown Parcels Facing Castro Street
Historic District South Castro
[Block 0 - 399][Block 400 - 999]
Area/ItemTotal
Parcel Count 592786
Avg. Parcel Size (Square Feet)6,30740,15616,934
Number of Distinct Owners 522272
Avg. Built Space (Square Feet > 0)6,14134,91514,519
Median Effective Year Built (Year > 0)195519631960
Avg. 2009 Assessed Land Value / Land Sq. Ft. (LV > 0)$85.62$56.73$65.53
Avg. 2009 Assessed Improvement Value / Built Sq. Ft. (LV > 0)$147.09$224.67$201.41
Note: Assessed value averages calculated as weighted averages:
Sources: 'LandParcel' geodatabase provided by City of Mountain V
Table 6
Several key, interrelated issues illustrated in are described below.
Small and Narrow Parcels
. In addition to fragmented ownership, the parcels along Castro
Street, especially in the Historic District, tend to be small an
development. For example, the average parcel size in the 100 to
is about 6,300 square feet. In addition, the buildings typicall
frontages (e.g., 25 feet) in proportion to depth (i.e., up to 150 feet depths). While
restaurants have been successful here, the buildings are too sma
poorly relative to the needs of many desirable retail tenants from other product categories.
In particular, high volume national and regional retailers seek larger space and broader
street visibility. Smaller parcels can also make it difficult f
parking requirements on site or may require expensive undergroun
Numerous Properties and Owners
. At the present time about 90 percent of the 86
parcels along Castro Street are separately held by different own
tenant recruitment, and other economic development activities un
can be difficult and tend to optimize the interest of the individual owners above the
Downtown as a whole. In addition, assembling a parcel large enough for significant
residential or commercial development can require the cooperatio
potentially divergent short- or long-term goals.
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Existing Tenants and Leases
. As noted, the Downtown has few vacant parcels (other than
the surface parking lots). Thus, any new development must overcome the financial hurdle of
assembling and purchasing land currently occupied by buildings a
buildings often provide a secure, low-cost, and low-risk income
which can represent a significant financial hurdle to redevelopm
rates of return (for investments in renovation) are often below
nothing. Other economic (or non-economic) motives or circumstances may also discourage
owners from making investments, including speculation and expected continued appreciation
of property value.
It should be noted that most of the redevelopment challenges des
along the southern, or upper, portions of Castro Street compar
Table 6
shown in , for example, the average parcel and building sizes are significantly larger as
one crosses California Street and approaches El Camino Real. Th
opportunities may be more feasible in this area.
City Growth Projections
As part of the General Plan 2030 Update process, City staff in c
team has developed a forecast of future development in various f
Downtown. These projections were based on a parcel-by-parcel analysis of existing uses and a
set of technical assumptions and calculations related to the likelihood of (re-)development. The
results from this analysis for the Downtown Precise Plan and Census Tract areas compared to
Table 7
citywide are summarized in .
Figure 3
In addition, illustrates the key subareas in the Downtown that are assumed t
developed during the period of the General Plan (i.e., through 2
Table 7
calculations in . The parcels shown in this figure have densities far below the
designated by the General Plan and therefore present the greatest opportunities for growth.
They do not take into account any impediments to future development from current land use.
As shown, analysis conducted for the General Plan 2030 Update finds a significant amount of
development potential and thus projects substantial growth in th
years as it continues to mature as a vibrant mixed-use district.
anticipates a substantial amount of new, higher-density resident
most part exceeding growth rates for the City as a whole. For e
envision over 674 new residential units (a 45 percent increase),
condominiums, in the Downtown Census Tract (relative to 28 perce
office space within the Precise Plan boundary is projected to increase slower than the City as a
whole, although it still adds about 252,000 square feet (a 29 pe
number of single-family units in the Precise Plan boundary (but not the Census Tract boundary)
is projected to decline, although this is more than off-set by multifamily unit gains.
It is also worth noting that the General Plan Update projections envision a significant shift in
retail and office space to the Downtown Precise Plan area and ou
broader Downtown Census Tract. Meanwhile, the areas immediately surrounding the Downtown
Precise Plan area are expected to experience a conversion of retail to residential. The ability of
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the Downtown area to realize the growth and change envisioned in
depend on its market position and role in the regional economy as well as efforts by the City and
other entities to support and foster private-sector investment.
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23
24
3.DMPR
OWNTOWNARKET ERFORMANCE AND OLE
This chapter assesses the Downtowns current market position wit
region, focusing on the performance of existing or emerging market niches that may serve as a
basis for ongoing (re-)development and growth. The analysis is designed to identify
Chapter 4
opportunities and inform corresponding policy initiatives discus.
Overall, Downtown Mountain View functions as a highly successful CBD with a healthy mix of
residential, commercial, civic, and cultural land uses serving t
Chapter 2
noted in , both public- and private-sector investments have contributed t
environment. On the public side, the Performing Arts Center, Library, City Hall, Eagle Park,
successful City supported events (e.g., farmers market, Thursday Night Live), and improved
transit service have all strengthened the Downtown as a destination and community amenity.
On the private side, the growing prestige of the Downtowns high
of retail, especially dining options, continue to attract intere
employers. It is also worth noting that the Downtowns market position and vitality have
improved over the last decade and since the completion of the EPS 1999 Report, even as the
regional and/or national economy has faltered, as documented below.
Although the Downtowns overall business environment is generall
within it play distinct roles, with some playing a high-profile and regional function and others
serving a more secondary, supportive, and/or peripheral function. The following sections further
describe the market performance and roles of the office, retail,
Office Sector
Regional Economic Context
The defining feature of Mountain View in general, and the Downtown in particular, is its central
location in one of the premiere technology-oriented economic clusters in the United States if not
the world. The Peninsula and Silicon Valley have experienced several significant cyclical
downturns over the last ten years, concurrent with the decline o
recent mortgage default-led financial crisis, which have contrib
and occupancy rates for office and R&D space. However, the regi
reinvent itself with new technology-based sectors emerging as ot
While most economists predict the current economic recovery process to be slow, available
indicators suggest that the Bay Areas high-tech sectors are on
and growth. For example, Silicon Valley employment grew by 12,3
2009 and 2010 while venture capital investment grew by 5 percent
5
increased 9 percent (above the national increase of 6 percent) d Much of
this recent growth is being driven by emerging sectors, such as
5
The Index of Silicon Valley 2011.
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biotechnology, directly related to and/or derived from the San F
technological competencies.
Even as the regions industry mix evolves, Mountain View has remained a focal point for office
and R&D tenants, cultivating many of the regions top-rated tech
years. Similar to the region as a whole, the City continues to evolve and redefine itself with t
loss of once-high-profile companies replaced by new or emerging industry leaders. For example,
Table 8
as shown in , only five of the Citys current top ten employers were even in
years ago. In addition, five of the Mountain Views top ten employers in 2000 are either no
longer in business or have left the City. However, citywide employment actually increased over
this period with over 2,100 new jobs.
Table 8
Mountain View Top Private Employers
2009-20102000-2001
Entity Estimated # Rank% of City Estimated # Rank% of City
of EmployeesTotalof EmployeesTotal
Top Employers
Google10,000116.3%---
Symantec3,40025.5%---
El Camino Hospital2,50034.1%2,02533.4%
Microsoft Corporation2,40043.9%1,30062.2%
Intuit Corporation1,70052.8%90981.5%
Synopsys, Inc.1,00061.6%1,62652.7%
Palo Alto Medical Foundation80071.3%---
KPMG70081.1%90091.5%
LinkedIn60091.0%---
Omnicell300100.5%---
Silicon Graphics Incorporated (SGI)---2,50024.2%
Hewlett-Packard Company---2,86514.8%
Netscape Communications---1,80043.0%
Sun Microsystems---1,24272.1%
Siemens---840101.4%
Subtotal23,40038.1%16,007 27.0%
Citywide 61,46459,320
Source: City of Mountain View Comprehensive Annual Fiscal Report
Economic & Planning Systems, Inc.
Mountain Views economic landscape continues to be dominated by high-tech industry leaders
Table 8
and their relative concentration has actually increased, as show. In early 2011, the
Citys two largest employers, Google and Symantec, account for more than 20 percent of total
employment. By comparison, in 2000 the two largest employers, S
Packard, accounted for less than 10 percent of the Citys jobs (these two companies now have a
negligible presence in the City). It should be noted that the City itself is also a relatively large
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employer with about 868 full, part-time, and seasonal jobs, most of which are located in the
Downtown.
Downtown Performance and Growth
The Mountain View Downtown office market clearly benefits from its location in Silicon Valley and
affiliation with the Citys prominent high-tech companies. Howe
unique role in this regard because of its differentiated positio
oriented CBD with a range of retail and other amenities, includi
Although most of the Citys larger, high-tech companies are loca
in the City, they have brought national recognition that, combin
has helped to make the Downtown one of the top office submarkets in Silicon Valley, if not the
6
entire Bay Area. For example, based on such market indicators as lease vacancy
Downtown Mountain View ranks only behind San Francisco and Palo
offer mixed-use, downtown-oriented amenities (e.g., dining, tran
Despite its high profile, the Downtown office market is currentl
terms of total square feet and the type of space available. Although there are several Class A
buildings, much of the space is generally in older buildings and on second- and third-story floors
above ground floor retail. The newest and highest-quality Class A building, the six-story
Tishman Speyer completed in 2004, is occupied by a single office tenant (Fenwick & West LLP)
although it includes ground floor retail. Consequently, demand is primarily limited to
tenants seeking 6,000 square feet or less. This type of space has typically been attractive to
start-ups. However, large tenants looking for a signature addre
room for expansion generally look elsewhere.
The following performance indicators for Downtown Mountain View
Table 9
described above (see ):
Lease and Occupancy Rates
. Both lease and occupancy rates are relatively strong, far
exceeding the average for Silicon Valley. Indeed, according to brokers active in the market,
true lease rates for quality, Class A Downtown office is second
reported rates reflect an above average proportion of sub-standard space. Indeed, the
Downtown office market is currently the tightest it has been sin
7
slightly below 4 percent.
6
Office brokers active in Silicon Valley and The Peninsula typically divide the region into a number of
sub-markets that generally correspond to geographically discrete
Downtown Mountain View is one such sub-market in the broader Sil
Palo Alto, Sunnyvale, Santa Clara and Cupertino.
7
See, Vacancies few in Mt. View , Silicon Valley / San Jose Busi
No. 5. It is also worth noting that, the current vacancy rate is artificially inflated because of a large
sublease available at the Microsoft-subsidiary TellMes former campus on Villa Street. Sublease space
generally takes longer to lease up because the property owner continues to receive revenue from the
previous tenant.
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Table 9
Office Market Indicators, Q3 2010
Building Square FeetLeaseVacancy
Location Total OccupiedAvailable Rates Rates
Mountain View
Downtown1,378,136 1,266,507 111,629 $2.798.1%
City-Wide4,422,056 4,015,825 406,231 $2.739.2%
Other Silicon Valley Cities
Palo Alto10,086,4409,301,257 785,183$4.237.8%
Sunnyvale9,302,5426,436,056 2,866,486$3.1030.8%
Santa Clara9,206,5657,026,134 2,180,431$1.9223.7%
Cupertino4,426,1403,947,579 478,561$2.8810.8%
Silicon Valley Total 61,257,60074,872,898 13,615,298 $2.5518.2%
Source: Cassidy Turley Market Reports; Economic & Planning Syst
Size and Growth
. The Downtown office market is relatively small, with about 1.
square feet, or about 30 percent of the Citys total office space, and less than 2 percent of
the Silicon Valley total. Moreover, the Downtown has added mini
last ten years, even as occupancy and lease rates have improved. In addition to the land
Chapter 2
assembly issues described in , tightening lending practices also appear to be
curtailing new development in recent years. For example, financing for a fully entitled office
project on Evelyn Street has reportedly been hindered by a 50 percent pre-lease
requirement.
Tenant Types and Mix
The office tenant mix in the Downtown generally reflects the setting and space constraints
described above. Specifically, it is a high-demand location for
many involved in more niche subsectors and/or early-phase product development but often
priced out of Palo Alto. The Downtowns historic setting, res
also make it attractive to younger workers and entrepreneurs, th
cutting edge of various tech fields. In many ways the Downtown is serving as de-facto
incubator space for the larger Silicon Valley region and thus as a valuable economic
development asset for the City. Going forward the City may want to support this role while
exploring options to retain businesses that have outgrown their
opportunities elsewhere in the City.
Table 10
Further detail on the composition of Downtown tenants is provide based on data
from the BIDs as well as other sources (e.g., Internet and site
percent of the tenants are involved in high-tech-related fields, especially Internet and software.
Meanwhile, professional and administrative sectors, which include tenants frequently involved in
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high-tech as service providers (e.g., venture capital or law), account for about 36 percent of the
firms. Medical and health services also represent a significant proportion of Downtown tenants
at 13 percent of the total. It is important to note that these
firms rather than amount of employment or occupied space. Several major tenants, such as
Fenwick & West LLP and Kaiser Permanente, may be underrepresente
Table 10
Downtown Office Tenant Mix
#of
Establishments%ofTotal
TenantCategory
HighTechSector
Internet/Software7331%
R&DTechnicalServices104%
[1]
Telecom./Hardware73%
Total 9038%
MedicalandHealthServices 3013%
OtherProfessional/AdministrativeServices
Finance,Insurance,&RealEstate4117%
OtherProfessional/AdministrativeServices229%
Law146%
Architect/Design83%
8536%
Civic,Recreation,Cultural,andOther
Art,Recreation,&Education146%
CommunityService/Religion31%
Government10%
Other/Unkown125%
3013%
Total 235100%
[1]IncludesAT&Tcolocationswitchingfacility
BasedondatafromDowntownBID,EPSwalkingtour,onlineresearch,andothersources.
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Retail Sector
Regional Market Context
Downtown Mountain Views retail sector must be viewed in the con
interconnected trade areas that shape the shopping, commute, and leisure/entertainment
8
patterns of residents, visitors, and workers within the broader region. The City is centrally
located in a mature and supply-rich retail environment that cont
offerings. In addition, the City itself also contains a relatively diverse, albeit disaggregated,
retail sector including a department store-anchored shopping center (San Antonio Center), a
well-traveled commercial corridor (i.e., El Camino Real), and numerous neighborhood and stand-
alone commercial centers.
Table 11
provides an overview of the level of regional competition, list
orientation of significant retail destinations within 20 miles o
As shown, this broader trade area includes centers and districts
daily needs and discount shopping to entertainment, tourism, high-fashion, and other specialty
categories (e.g., ethnic and arts and crafts). In addition to regional malls, the table also
indicates other Main-Street-oriented CBDs since this is a format
the Downtown.
The broader economic context has both positive and negative impl
Mountain Views retail sector. On the one hand, tenants or projects have the potential to attract
demand from a variety of market segments, including local and re
and employers and their workers. Indeed, the market demographics within a 10- to 20-minute
commute from the Downtown meet or exceed the requirements of mos
population, income, and other factors. On the other hand, this environment also creates a high
level of competition, making it difficult for a tenant or project to dominate a particular submarket
or niche.
Market Growth and Performance
Over the last ten years, Downtown Mountain Views retail sector has continued to solidify and
mature, building on the momentum from public investments, a succ
marketing efforts by the Revitalization Authority, BID, and othe
added a number of new tenants, replacing some of the low-volume establishments that
predominated at completion of the EPS 1999 Report. However, from a physical perspective the
retail landscape remains largely unchanged, with most of the act
District in relatively small, shallow spaces and only minimal ne
8
A trade area is a geographic region that contains the elements
determine the performance of a particular retail district and/or store. Trade areas are influenced by a
variety of factors, including the location and density of the ta
of key competitors, the relative distance or travel time for each of the above, geographic and
psychological barriers, and existing commute and shopping patter
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Table 11
Shopping Centers/Districts within 20 miles of the Mountain View Downtown
Shopping Center/DistrictDistanceMarket
(miles)Orientation
Mountain View
Downtown 0Main Street CBD
San Antonio Shopping Center2Regional Center
Palo Alto
Stanford Shopping Center7Regional Mall
University Avenue7Main Street CBD
Downtown Sunnyvale4Main Street CBD
Downtown Los Altos3Main Street
Menlo Park8Main Street CBD
San Jose
Santana Row11Mixed Use / Entertainment
Westfield — Oakridge19Regional Mall
Downtown San Jose Shopping14Main Street CBD
El Paseo de Saratoga11Regional Center
Westgate Shopping Mall11Regional Mall
Willow Glen Shopping District15Regional Mall
Great Mall in Milpitas12Regional Mall
Westfield — Valley Fair in Santa Clara12Regional Mall
Campbell
Pruneyard Shopping Center14Regional Mall
Downtown Campbell14Main Street CBD
Downtown Los Gatos16Main Street
Cupertino Village6Regional Mall
Source: Economic & Planning Systems, Inc.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
The current performance of the Downtown retail sector is highlighted by the following indicators:
Sales Growth
. The Downtown has exhibited significantly strong sales growth
ten years and represents a much larger proportion of the Citys retail base. For example,
while the EPS 1999 Report showed the Downtown representing about
9
total taxable sales, current data suggest that the share has more than doubled to a
11 percent. In fact, over the last six years the Downtown has a
Table 12
32 percent of the total citywide growth in taxable sales, as sho. Dining
establishments accounted for almost 80 percent of the total Down
Lease, Vacancy, and Sales Rates
. The Downtowns success is illustrated by relatively high
occupancy and lease rates, particularly in the Historic District
active in Downtown, space in the Historic District typically rents for $4.00 per square foot
and vacancies generally turn over relatively quickly. However, on the upper (south) portions
of Castro Street outside the Historic District, rents are signif
square foot, reflecting its position as a lower-demand location.
In addition to strong lease and vacancy rates, rough estimates o
foot suggest that businesses are generally performing well and significantly exceeding their
Table 13
average sales performance estimated in the EPS 1999 Report. As , retail
stores overall achieved average sales of about $250 per square foot compared to about $131
per square foot in 1998. Although again the sales from dining and drinking establishments
are lifting the overall average, most of the other retail categories (with the exception of
apparel) generally meet or exceed national standards for typical
downtown setting.
Renovation and Tenant Turnover
. Although frequent tenant turnover can be indicative of
a declining retail district, in this case it appears to suggest
important to have a stable core of tenants, changes in a retail
adaptation to market conditions and gradual improvement as a shopping destination. High
turnover can also help to maintain a retail districts novelty a
customers with the arrival of each new business.
9
In the 1999 Market Feasibility Study conducted by EPS, total ta
Downtown and $923 million for all of Mountain View.
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33
Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Table 13
Summary of Downtown Retail Sales by Category
Sales
Sales Tax Category$/Sq FtSquare Feet Amount% of Total
$11614,173$1,649,5052%
Apparel and Clothing Accessories Stores
$19751,000$10,060,22513%
General Merchandise Stores
$285196,608$56,021,68575%
Food Services and Drinking Places
$17227,002$4,643,7796%
Personal Services
$251288,783$72,375,19497%
Total Retail and Food Services
$15616,502$2,582,4393%
All Other Outlets
$246305,285$74,957,633100%
Totals All Outlets
$131422,966$55,440,283-
Totals 1998 [1]
[1] Adjusted for inflation to 2009$.
Source: 1999 EPS Market Feasibility Study; City of Mountain View
Although detailed data is difficult to come by, anecdotal eviden
the retail properties on Castro Street have undergone significan
tenanting. In addition to the façade improvements and new development facilitated by
the Revitalization Authority (e.g., CVS Pharmacy and ground floor of Tishman Speyer
building), reinvestment has been undertaken to accommodate a range of new tenants
Table 14
over the past five years, as shown in . It is worth noting that of the 43-plus
tenants that have opened since 2005, about 67 percent are locate
(with about 20 percent located elsewhere on Castro Street and 14
Downtown streets). About 72 percent of these new tenants are ea
related establishments.
Tenant Types and Market Position
Although as a whole the Downtown functions as a highly successful retail location, the tenant
types and mix remain relatively one-dimensional (i.e., eating an
limited segment of the retail industry. Specifically, similar t
years ago, eating and drinking establishments dominate the Downt
significant turnover and property upgrades. Most other major re
are either underrepresented or nonexistent. In addition, most tenants consist of local,
independent, and/or mom and pop retailers, and high-volume national or credit retailers are
virtually nonexistent (with Starbucks, CVS Pharmacy, and Subway
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Table 14
Active Retail Establishments Opened Since 2005
ea
Yr
Category / TenantOpenedAddress
Eating and Drinking Establishments
(1)2010156 Castro St
Bushido
(2)2011Opening Soon
Castro Bistro and Wine Bar
(3)2010246 Castro St
Pho Garden
(4)2010185 Castro St
Thaiphoon
(5)Saavy Cellars2010750 W. Evelyn Ave.
(6)Bangkok International Inc2009185 Castro St
(7)Tsunami Sushi2009209 Castro St
(8)Nami Nami2009240 Castro St
(9)Sakoon By Bombay Garden2009357 Castro St
(10)Savory2009873 Castro St
(11)Neto Cafe & Bakery2008135 Castro St
(12)Noya Restaurant2008142 Castro St
(13)Zpizza2008146 Castro St
(14)Haute Cuisine2008228 Castro St
(15)Zen Lounge2008251 Castro St
(16)Bella Vita2008300 Castro St
(17)Caffe Romanza2008301 Castro St
(18)New Mongolian BBQ2008304 Castro St
(19)Bodrum Cafe2008383 Castro St
(20)Ginseng Bbq & Tofu House2008475 Castro St
(21)Mediterranean Grill House2008650 Castro St
(22)Sweet Corner2008650 Castro St
(23)2007147 Castro St
Hong Kong Bistro
(24)Temptations2007288 Castro St
(25)Smart Cookie Bakery2007698 W Dana St
(26)Hong Mi Pei2007743 W Dana St
(27)2006110 Castro St
Xahn
(28)Shabuway2006180 Castro St
(29)Godavari2006216 Castro St
(30)Spica Coffee2006650 Castro St
(31)2005341 Castro St
Cafe Baklava
Apparel
(32)2007279 Castro St
Boutique 4
(33)2006250 Castro St
Therapy
Home Furnishings / General Merchandise
(34)2008850 California St
CVS Pharmacy
(35)Home Gallery2007285 Castro St
(36)2005650 Castro St Ste 400
Invisible It
(37)Jehning Family Lock Museum2005175 Castro St
Other
(38)Yoga Belly2010455 Castro St
(39)Art Frame Studio2007293 Castro St
(40)Printers Inc Bookstore2005301 Castro St
Source: City of Mountain View; Economic & Planning Systems, Inc.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Detailed data on the relative size and mix of the Downtowns ret
Table 15
in . As shown, food and drinking establishments have averaged slightly more than
60 percent of total retail sales over the last seven years and t
rd
(it was 70 percent through the 3 Quarter 2010). Meanwhile, food and drinking tenants account
for about 40 percent of all retailers, suggesting that their sales performance far exceeds the
average. General merchandise and home furnishing stores represent the next most successful
retail category, with about 23 percent of sales and 13 percent of the establishments. The
clothing and accessories category appears to be an area with par
given its significant sales growth in recent years (830 percent between 2003 and 2009 as shown
Table 12
in ) despite representing a relatively small proportion of total sa
clothing and accessories represents a category well suited to do
includes a high volume of younger professionals, residents, and visitors (most of the existing
apparel stores appear to be targeted to older females).
Table 15
Downtown Establishments by Category and Percentage of Sales (2003–2010)
YearAverage
Sales Tax Category 20032004200520062007200820092010#%
Clothing and Clothing Accessories Stores
989111010101110 5%
# of establishments
0%1%1%1%2%2%2%2%1%
% of Total Sales
General Merchandise & Home Furnishings Stores
191719211919191819 10%
# of General Merchandise establishments
655556756 3%
# of Home Furnishings establishments
27%29%25%25%20%17%19%19%23%
% of Total Sales
Food Services and Drinking Places
727575778387818379 41%
# of establishments
54%57%58%63%65%55%63%70%61%
% of Total Sales
Personal Services
182122192121251420 11%
# of establishments
3%-3%2%1%1%7%5%1%2%
% of Total Sales
Technology
161718191916191517 9%
# of establishments
5%6%7%2%4%11%4%2%5%
% of Total Sales
Other Retail [1]
111214121211131212 6%
# of establishments
4%4%4%4%5%5%6%5%5%
% of Total Sales
Total Retail and Food Services
151155162164169170174158163 85%
# of establishments
93%93%95%95%96%96%97%97%95%
% of Total Sales
All Other Outlets
272729302928312528 15%
# of establishments
7%7%5%5%4%4%3%3%5%
% of Total Sales
178182191194198198205183191100%
Totals All Outlets
[1] Category includes Motor Vehicle and Parts Dealers, Building
order to protect proprietary information.
Source: City of Mountain View; Economic & Planning Systems, Inc
A recently completed pedestrian intercept survey conducted as
Study further supports the Downtowns profile as primarily an ea
Table 16
catering to the office lunch and evening dining segments. As shown in , over half
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
(51 percent) of all respondents stated their trip purpose was to
for shopping. Meanwhile, about 20 percent reported being in the Downtown for work (during the
day this response accounted for 30 percent of the total). Among
suggest that the Downtown experiences significant foot traffic t
the non-dining establishments. In other words, there appears to
demand.
Table 16
Pedestrian Intercept Survey Results
Midday ResponsesEvening ResponsesAll Responses
Trip Purpose%#%#%#
Working 30%436%620%49
Shopping12%1812%1212%30
Eating37%5471%7351%127
21%3012%1217%42
Other
Sample Size100%145100%103100%248
Source: Wilbur Smith Associates Downtown Mountain View Parking S
Chapter 2
As described in , the existing space in the Historic District, the area that appears to
account for the bulk of Downtown sales, is characterized by rela
buildings. This combination of small space and high rents limit
can survive in the Downtown to mainly restaurants and independen
establishments are one of the few product types that can perform
because they achieve high enough sales per square foot to cover the high rents for such a small
area. Successful independent retailers can more readily adapt t
are more flexible than retail chains who often have pre-designed floor plans with square-foot
minimums.
Residential
Regional Economic Context
Both the Peninsula and Silicon Valley (including Mountain View) have increasingly become job
rich communities with a limited supply of available land to acc
development. This condition is especially true in Mountain View
jobs as employed residents between 2003 and 2008. In other word
continue to draw residents from neighboring communities because it lacks the housing stock to
accommodate them locally.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Going forward, employment growth is expected to continue to outpace population growth at both
the regional and local level. For example, the General Plan projects Mountain View will add
about 14,714 new residents between 2010 and 2030 compared to 23,
rich/land-poor environment suggests strong and growing demand at both a local and regional
level for higher-density housing. Increasing home prices combin
will continue to improve the economic attractiveness of higher-density development in the long
term.
Downtown Market Performance
As a vibrant mixed-use district, Downtown Mountain View contains a variety of residential
product types, ranging from single-family, townhomes, condominiu
However, given limited land availability most new development ov
focused, and will likely focus in the future, on higher-density
additions to existing single-family units. Although the recent economic downturn has stalled
activity in the last several years, long-term market conditions
Downtowns well-regarded urban amenities, strong employment oppo
supply, as described above.
The following market variables further document the quality and
housing market, focusing on the multifamily and condominium mark
likely deter significant single family development in the Downto
Price and Transaction Trends
. Mirroring a trend throughout the Bay Area, average home
prices experienced rapid escalation in the City and Downtown in the early to mid part of the
past decade. Although not totally immune from the housing crisi
experience the dramatic price declines felt elsewhere in the State and nation, as shown in
Table 17
. In fact, in terms of condominium sale prices, 2010 was actual
for the Downtown, with a median price of about $660,000, exceedi
2007. Overall, it appears that transaction rates declined in both the Downtown and the City
as a whole as homeowners elected to ride out the housing crisis.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Table 17
Condo Median Sales Price and Transactions
2006-2010
Item/Location20062007200820092010% Change
Median Condo Sale Prices
Downtown$584,000$665,000$625,000$550,000$659,400[1]12.9%
Mountain View$559,500$606,500$596,150$540,000$550,000-1.7%
Santa Clara County $500,000$530,000$435,000$320,000$345,000-31.0
Transactions
Downtown2937291417-41.4%
% of City7%10%11%5%6%-
Mountain View434356262289265-38.9%
Santa Clara County 5,1513,8452,9103,9273,854-25.2%
[1] Three transactions with sales prices over $900,000 were excluded from the calculation.
Sources: Rereport.com; Economic and Planning Systems, Inc.
Foreclosure Rates
. Reflecting Mountain Views relatively favorable residential market, both
the City and Downtown have not experienced the level of foreclos
Table 18
many other California markets. As shown in , the 2010 foreclosure rate in the
Downtown was lower than the City as a whole, which in turn, was
Santa Clara County as a whole. This is particularly impressive given that the Countys
foreclosure rate was itself about half that of the State average.
Table 18
Comparison of Mountain View 2010 Foreclosure Rates
TotalTotal UnitsRate of
LocationForeclosures(less Mobile Homes)Foreclosure
[1]
Downtown
433,8281.12%
Mountain View
40632,6091.25%
Santa Clara County 23,010609,8283.77%
California 840,70112,994,9286.47%
[1] Data for the 94041 zip code.
Sources: RealtyTrak.com; California Department of Finance; Economic and Planning
Systems, Inc.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Market Segmentation
Quite apart from price and other market pressures resulting from
segments of the population tend to exhibit particularly strong p
downtown environments due to the unique amenities they offer. T
10
below with reference to their applicability to Downtown Maintain
Young Professionals and Singles
. Young professionals, those living alone, with
housemates, or as a couple, have filled many of the higher-end compact residential products
in other urban and suburban centers in California. Given the higher pricing associated with
such products, this segment often consists of young professionals with above-average
incomes for their age group. The appeal of these unit types is
proximity to dining and entertainment options; short commute times associated with the
proximity to work, often via walking or direct transit links; an
available in more suburban environments. Downtown Mountain View is well-endowed with
those types of amenities that attract this segment.
Young First-Home Buyers
. Young families looking to purchase their first home often loo
for smaller or more compact residential development, primarily because of affordability and
family size. These families are often looking to purchase a smaller home as a way to get into
the market with the intention of trading up to a larger home as
biggest appeal of compact residential development for this group
Empty Nesters/New Starters
. Empty nesters generally refer to parents who are still
together, but whose children have left home. No longer needing
couples will often downsize to a higher-priced, higher-density p
neighborhoods that offer easy access to cultural, entertainment, and eating and drinking
amenities. New starters refer to individuals undergoing a major
of a significant event, such as a divorce or career change. They often seek high-density
housing because of both affordability and lifestyle factors.
Seniors
. Seniors often seek a safe and walkable community in a more quiet part of town
and prefer to live among similar-aged people. Access to public transit also is a plus. Some
senior developments also provide special amenities, such as a 24-hour doorman, additional
on-site staff to assist with daily needs, and even health care professionals. The existing
services in the Downtown that may appeal to this segment include the public library, medical
offices, and proximity to retail and transit.
10
From Who Lives Downtown, The Brookings Institution, Living Cities Census Series, November
2005.
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4.DPS
EVELOPMENTROSPECTS AND TRATEGIES
This Downtown Mountain View Market Study and Development Strateg
a means to fine-tuning the Citys planning, public investment, a
the Downtown area once the Revitalization Authority sunsets. Th
the status of Downtown redevelopment and provide a detailed assessment of market conditions
and potentials. This chapter provides policy direction for furthering achievement of City goals for
the Downtown within the context of ongoing City planning and pol
emerging General Plan Update. Specifically, market opportunities are summarized, followed by
recommendations for the development opportunity sites that have
set of recommendations intended to guide subsequent development
Market Opportunities
Chapter 3
The analysis provided in concludes that Mountain Views Downtown has strong
market prospects for the cross section of residential and commer
seeking attractive, transit-accessible downtown locations. Howe
also exhibits certain market limitations, especially in its reta
availability of sites that can accommodate new projects and tena
objectives for the Downtown need to be placed in a citywide context as it moves forward with
revitalization of other existing retail areas including the San Antonio Center, the El Camino Real
Corridor, and the existing neighborhood shopping centers, as outlined in the General Plan
Update.
The following sections further address the specific market oppor
influence the product types and tenants achieved as a part of on
efforts. A key goal is to identify opportunities and support comprehensive planning and policies
so the Downtown can successfully adapt to an evolving competitiv
within the City and beyond.
Retail Opportunities
Chapter 3
As described in , the Downtowns retail sector is quite successful from the pers
of existing tenants and property owners but currently lacks the depth and range of retail
offerings that it appears capable of achieving. While the retail sector is performing far better
than it did a decade ago, it remains dominated by eating and dri
volume specialty shopping. The dominance of food and beverage e
self-reinforcing and is further perpetuated by the preponderance
properties lining Castro Street, especially in the Historic District. However, given the
Downtowns level of activity, density, and accessibility, it may
format retailers if the proper sites can be made available. Adding new and potentially larger-
format retailers (e.g., space for tenants larger than 3,000 squa
vitality and energy into the southern portion of Castro Street,
pedestrian activity experienced further to the north.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
Prototypical Main Streets
As part of this report, EPS researched other successful Main-Str
Bay Area that share elements related to scale, character, and demographics to Downtown
Table 19
Mountain View. However, these selected streets, listed in , generally possess more
mature and high performing retail sectors than Mountain View, re
the Downtown should aim to achieve. The goal of this effort was to describe certain Main-Street
prototypes, including the type of regional and independent retailers that they are able to attract,
as a basis for identifying various themes and aspirational mode
Downtown Maintain View.
Table 19
As shown in , these successful streets have a varied mix of retail tenants and have
achieved a stage of development at which they can attract national chain retailers (e.g., Apple
Store, Williams-Sonoma, or Gap). For example, University Avenue in Palo Alto has a range of
national tenants including Restoration Hardware and Haagen-Dazs as well as local merchants
such as The Playstore and Black Diamond Sports. The presence of national retailers can boost
the performance of Downtown because these tenants can attract higher volumes of visitors by
11
offering a product line and a name brand that customers can identify. Shoppers come to these
stores for an item they need but will stay in the area if anothe
In addition to a healthy mix of local, regional, independent, and national chain retailers,
successful Main Streets generally carry a range of retail catego
decor, apparel, dining) and thus can appeal to multiple types of consumers and shopping
Table 19
motivations. For example, as shown in , Chestnut Street in San Francisco sells
electronics (the Apple Store), clothing (the Gap), and kitchen-ware (Williams-Sonoma).
Although many successful Main Streets have a dominant theme(s) t
sense of place (e.g., culinary, home furnishing, entertainment), these offerings are
complemented by other successful tenants. Having a range of retail options helps to diversify
the type of shopper that visits these areas.
Direction for Downtown Mountain View
EPSs professional experience suggests that diversity is critica
Table 19
addition, as reflected by the wide range of businesses shown in , downtown retail must
differentiate itself from the more formulaic retail found in large malls and shopping centers.
Unlike centrally managed malls or shopping centers that generall
tenanting, the tenant mix in downtowns is generally more eclecti
makes them attractive and unique. As such, the most successful
settings will evolve organically and cannot be definitively desc
a given point in time. Moreover, the optimal mix of businesses can change over time based on
evolving market trends, local perceptions, and other factors.
11
By way of example,
although the vast majority of all retail stores in the United St
(approximately 90 percent) are single-store businesses, regional
substantially more than half of all retail sales.
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Table 19
Examples of Businesses in Successful Downtown Area
s
Business NameType of BusinesseCategor
sy
Universit Ave. Palo Alt
yo
Apple StoreComputersNational Chain
Gleim the JewelerJewelryRegional Chain
Mom and Pop
The Stanford TheaterMovie Theater
Restoration HardwareHome furnishingsNational Chain
Mom and Pop
PaperwhirlCustom invitations/printing services
Haagen-DazsIce CreamNational Chain
Design Within ReachFurniture StoreNational Chain
CieloFashion BoutiqueRegional Chain
Mom and Pop
The PlaystoreNatural toys, wooden toys and organic toys
Borders BooksBook StoreNational Chain
Mom and Pop
Black Diamond SportsSporting Goods
Chestnut St. San Francisc
o
Mom and Pop
SOMA Wholesale FloristFlorist
Lucky BrandClothingNational Chain
photograph & frameCustom FramingRegional Chain
Mom and Pop
AMA Fashion StoreWomen's clothing
GNCVitaminsNational Chain
GapClothingNational Chain
Mom and Pop
Fireside CameraCamera Store
Jamba JuiceSmoothiesNational Chain
Apple StoreComputersNational Chain
Williams-SonomaFurniture/Home goodsNational Chain
Catnip & BonesPet StoreMom and Pop
Paper SourceStationeryNational Chain
Pottery BarnFurniture/Home goodsNational Chain
College Ave. Oakland
Trader JoesGrocery StoreNational Chain
FITWomen's clothingMom and Pop
Zachary's Chicago PizzaPizzaRegional Chain
See Jane RunFitness apparelRegional Chain
TootsiesWomen's shoesMom and Pop
Barney's Gourmet HamburgersRestaurantRegional Chain
Viva DiveFashion BoutiqueRegional Chain
IniamFashion BoutiqueMom and Pop
Dreyer's Grand Ice Cream ParlorIce CreamNational Chain
Warm ThingsQuilted productsRegional Chain
Ag PhotoPhoto and camera servicesMom and Pop
Pasta PomodoroItalian RestaurantRegional Chain
Rockridge Market HallLocal produce, bakery, butcher, floristMom and Pop
Fenton MacLaren Home FurnishingsFurnitureLocal Chain
Rockridge KidsKids productsMom and Pop
SafewayGrocery StoreNational Chain
Red HoundPet StoreMom and Pop
Source: Economic & Planning Systems, Inc.
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Downtown Mountain View
Market Study and Development Strategy
Draft Report, June 2, 2011
The Downtown will continue to function largely as it currently does as a center of employment
and civic facilities, with a retail sector dominated by eating a
establishments along with some neighborhood convenience shopping. Market, policy, and
economic factors all underpin this conclusion. However, strategic planning and policy can help
guide the Downtown in a desirable direction and help to build on
regard the Downtown does present a number of opportunities for improvement both in quality
and quantity of retail uses, particularly with regard to disposi
opportunity sites, as enumerated below.
1.Consider potential for a retail destination through the attraction of more diversified
retail tenant mix
. The demographic profile of Downtowns diverse user groups, in
office workers, residents, and eating and drinking patrons, as well as participants in the
Downtowns civic, cultural, and entertainment activities, represent an attractive market for a
variety of retail tenants. Many of the Downtown residents, workers, and visitors are young
with a relatively high level of disposable and/or discretionary
casual, incidental, or even impulse related consumption. A range of retail tenants actively
target this market segment and, if successfully recruited to the
would further expand its offerings and market draw. In particul
are increasingly attracted to downtown locations as a result of the foot traffic they generate
and the demographic composition of their user groups. However, in 2009, clothing stores
accounted for only 2 percent of the Downtown sales. The City co
budding home furnishing and accessories sector which currently a
of Downtown retail establishments. Successful stores in these c
different type of visitor to Downtown.
While the City has long targeted a grocery store in the Downtown, market trends, local
competition (existing community shopping centers), and site cons
adequate parking) may make such a retailer difficult to attract. In addition, it is not clear
that such a use would significantly add to the Downtowns emerging role as a more dining
and lifestyle destination. In fact, a grocery store that serves lunch options may actually
compete directly with existing eating and drinking establishments. In any case, a full-service
grocer does not appear to be a missing link in Downtown and thus
success.
2.Consider potential for more national or regional retailers
. Currently, the only national
chains are food and beverage outlets, such as Starbucks, CVS Pharmacy, and Subway.
These food retailers are important, however, because they are typically the pioneers in retail
locations and can entice other national and regional retailers t
noted, the addition of several high-profile branded retailers,
and drinking, could draw a different type of visitor to the Down
consumer base. The advantages of such retailers need to be balanced against the need to
keep the area unique by maintaining local businesses.
3.Continue to upgrade and revitalize existing buildings, tenants, and properties
.
Downtown property owners/developers, guided by the Precise Plan and in some cases with
assistance from the City, have been quite successful with renova
resulted in a substantial upgrading of tenants over the past dec
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performing retail space and evaluation of obstacles to improvement and expansion can lead
to further improvement of the existing building inventory. It i
most regional and national retailers require larger space as well as certain levels of foot
traffic before they move into a new neighborhood. Given that Downtown appears to possess
substantial foot traffic, a lack of quality space appears to be the biggest impediment.
Office
Chapter 3
As discussed in , the Downtown is a highly successful office market that is currently
constrained by lack of space rather than demand. Indeed, unlike
office market already boasts a regional rather than primarily local draw as a result of its linkage
to the Silicon Valley high-tech economy; the Downtown setting is
start-up companies seeking a high-amenity location with an aggregation of similar high-tech-
oriented companies. In addition, the office sector is currently a critical if not primary economic
driver for the Downtowns retail sector and thus its continued s
ongoing revitalization efforts.
Direction for Downtown Mountain View
The strategic issue going forward is how to incentivize the development of additional office
space, especially in light of existing financial and land assemb
example, tighter lending practices (i.e., a 50 percent pre-lease
delayed several fully entitled office developments. Although long-term market forces are
expected to play a positive role in addressing these challenges, City involvement may also be
necessary. For example, modification to existing land use requi
Downtown Precise Plan related to parking standards, Floor Area Ratios (FAR), and/or building
height might improve development economics. For example, the City may want to re-evaluate
on-site parking requirements or allow for an additional story in
as specific locations. In addition, the City may also be able to facilitate office development
through assistance in land assembly.
Residential
Higher-density residential development has been an integral part of the re-emergence of
Downtown Mountain View over the last 20 years. Although more recently the mortgage default-
based financial crisis has put a damper on new residential construction, this condition is expected
to be temporary, especially in high-value communities such as Mountain View. As documented
Chapter 3
in , going forward, high-density housing (e.g., condominiums, townhomes, and
apartments) will continue to be a successful component of the Ci
redevelopment efforts assuming adequate supply opportunities (i.e., in-fill sites) are available.
Direction for Downtown Mountain View
High-quality residential development should be encouraged in the
ability to offer the following key revitalization benefits:
“Full-Service” Environment
. New residential development will increase retail demand in
the District and encourage a full-service environment that is of
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downtowns. Revitalization of the Commercial District would bene
residents after 6 p.m. when many of the offices close. Even if they do not shop, these new
residents can provide an eyes on the street presence making th
inviting to those who do not live there. They can also create pedestrian traffic that might
encourage some retailers to expand their operating hours, remaining open later in the
evening.
Financial Feasibility
. Over the long term, the market-rate residential market is lik
the most lucrative from a development perspective. The resident
strong, characterized by low levels of supply and increasing val
downturn. Consequently, the inclusion of residential components
in the Downtown likely will improve their overall financial feas
elements may represent the carrot that makes an otherwise uneconomical renovation and
redevelopment of Downtown property financially viable.
Assessment of Opportunity Sites
As part of this analysis, EPS, working with City staff, identified a set of key opportunity sites in
the Downtown that might be well-suited for future development.
were selected based on their potential to result in catalytic pr
private revitalization in surrounding areas. These sites also offer urban design enhancements
that would further establish the Downtown as a desirable transit
Figure 4
balanced mix of uses and pedestrian-friendly urban environment. , with
several exceptions, most of the sites overlap with the underutil
Chapter 2
future growth in the General Plan 2030 Update, as discussed in .
The six initial opportunity sites identified as part of this pro
Table 20
summarized in . It is anticipated that EPS will subject several of the sites
below to further analysis based on direction from City staff and other stakeholders, focusing on
their development feasibility from a financial perspective.
1.South East Corner of El Camino Real/Castro Street
This 0.6-acre site located on the corner of El Camino Real and C
story bike shop and a bank with surface parking, as well as a small-pocket park owned by
the City. It provides a densification opportunity that would make it a prominent brand
location along the busy El Camino Real thoroughfare, providing a visual identification or
gateway to the Downtown, which does not currently have a strong visual presence along El
Camino Real. The site also offers the opportunity to densify the upper Castro Street area
as a destination providing a walkable and active mix of uses connecting both ends of
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12
the Downtown corridor, as well as advance the goals of the Grand Boulevard Initiative.
However, potential buyout challenges could complicate developm
density projects.
2.Bryant Street (Public Parking Lot 12)
The assembly for this City-owned surface parking lot located at
California and Mercy Streets was recently finalized with the pur
parcels to create a relatively large (1.6 acres) and uniformly shaped parcel with minimal
existing uses requiring demolition. In addition to being relati
Street site is well located one block off Castro adjacent to the
Pharmacy, and a relatively underutilized public parking structur
a multistory mixed-use building with office or residential over
has evaluated the development feasibility of locating a supermar
be more appropriate. Any development would need to be sensitive
commercial uses to the east and more residential character of the adjacent neighborhood to
the west.
3.St. Joseph’s Parking Lot
This site is bounded by Castro, Hope, and Church Streets and is
Permanente located across the street from the City Hall and the
It is made up of the churchs surface parking lot, an auxiliary
with the existing medical office building that combine for a 1.2-acre lot area. The site
provides a densification opportunity along the central portion of the Castro Street corridor
and would extend the activity area south of the Citys Histori
a multistory mixed-use building with a potential office or resid
ground-floor retail and could benefit from shared parking with t
the site offers good access and parcel shape for a high-quality
assemblage and buyout challenges could adversely affect development feasibility of a high-
density product.
4.383 Castro Street (Former Wienerschnitzel Site)
The 0.3-acre site, located on the corner of California and Castro Streets (at 383 Castro St.),
consists of a single-story restaurant with a surface parking lot
corners at this intersection include contemporary-style mixed-us
at least three stories in height, consistent with the desired do
result, the Wienerschnitzel site provides an opportunity to comp
final corner, providing a ground zero intersection at the top
project would be a multistory mixed-use building with a potentia
component above-ground-floor retail. However, the sites small size provides a feasibility
12
The Grand Boulevard Initiative is an innovative multi-jurisdict
include 19 separate city, county, regional, and local transportation planning agencies) seeking to
transform a 43-mile stretch of State Highway 82 (also known as E
as a vibrant, commercial mixed-use corridor with a range of prof
higher-density residential uses that are functionally integrated
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challenge for a dense development and may require assemblage of
to produce a parcel of adequate size to incentives redevelopment.
5.Dunn Automotive/Public Parking Lot 11
This site consists of six parcels located along Bryant Street be
It includes three City-owned parking lots, two single-family residences, and a Dunn
Automotive shop that combine for 2.1 acres. The site provides an opportunity to densify the
Bryant Street corridor with new development sensitive to the transition from the commercial
uses to the east and more residential character of the adjacent neighborhood to the west.
While the site offers a large uniformly shaped area for a high-quality development, its
fractional ownership, including public and privately owned land, presents an assemblage and
buyout challenge. In addition, redevelopment will require reuse
other uses, which often results in above-expected development costs due to site preparation.
6.Public Parking Lots 4 and 8
These lots are owned by the City and are located within a block of the VTI/Caltrain Station
along West Evelyn Avenue. Lot 4 is 1.07 acres and Lot 8 is 0.6
serving as City-owned surface parking lots. Proximity of Lots 4
Station makes them a desirable location for higher-density office or mixed-use development
that would enhance the current workspace cluster in the heart of
development would also provide a transition between commercial uses along Castro Street
and older two-story office space east of Lot 8. Provision of residential uses on both lots
would likely be a less desirable alternative given the train-tra
open, even-surface area with minimal existing requiring demoliti
the two sites will need to be developed as separate, stand-alone
separated by an active City street.
Recommendations
The 1999 EPS Report identified four separate goals for enhancing
the Downtown that are relevant to the current effort and can pro
progress and formulating next steps. These goals are (1) improv
through renovation and redevelopment, (2) diversifying the type
(3) improving the quality of retailers to increase overall sales
the scale of businesses to a critical mass, especially in desi
Based on the analysis from this current study, the Downtown has
advancing the goals outlined in 1999, as indicated by improved s
occupancy rates, and increased property values attributable in p
However, there still remain a number of market and physical gaps that suggest the Downtown
has yet to fully realize its economic potential. In addition, the Downtown will need to effectively
address ongoing changes in both the economic and policy environment to build on recent
successes.
Chapter 1
As described in , a key goal of this Report is to ensure that the City has a blu
and strategy for building on the momentum and continuing the suc
the Revitalization Authority sunsets in April 2013, or potential
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results of ongoing State budget negotiations. As part of this e
identify critical actions in the Downtown requiring the resources and/or powers of the
Revitalization Authority that should be taken in the short term
end, the following recommendations provide specific guidance for the City toward achieving
continuing revitalization and redevelopment of Downtown Mountain View as informed by its
market conditions and emerging opportunities evaluated herein.
1.Continue Investments in Public Amenities, Programming, and Facilities
The Downtown has greatly benefited from the substantial public i
the past two decades. As a part of opportunity site development
additional infrastructure and place-making investments including public space and amenities
st
(e.g., parks, plazas, public art); streetscape and gateway impro
Century infrastructure, including telecommunications (e.g., broa
electric vehicle charging stations); and additional public parki
physical improvements, other initiatives, and programming, including improved transit
service, expanded BID program activities, and continued Downtown
beneficial. Ongoing activities and events such as Thursday Night Live, the farmers market,
and Performing Arts programming should also be sustained.
A key challenge going forward will be to identify and secure ade
resources to sustain a stable or enhance level of investment in
programming and facilities described above. Although historically the Revitalization Authority
has been a critical resource for Downtown investment, after 2013
can no longer use tax increment revenue to finance these activit
has and may continue to provide financial support for Downtown p
competing demands on this source make it ill-suited and unreliab
occurring funding requirements. Consequently, other dedicated a
resources and mechanisms will need to be established.
Table 21
provides a preliminary list of potential financing sources and
City might explore going forward. As shown, a variety of local, State, and federal sources
may be available for this purpose, depending on the specific pro
including special assessments and other taxes, impact fees, land
contributions. In this regard, the City is currently exploring
existing downtown BIDs might be expanded or enhanced to help fund various investments or
activities that directly benefit Downtown tenants and property o
2.Identify and Recruit Desired Tenants
The City should continue tenant recruitment and marketing actions targeting tenants that are
likely to complement and enhance the Downtowns profile as a vibrant mixed-use district with
a range of cultural, entertainment, civic, commercial and residential uses. The notion here is
to pursue a range of tenants that complement existing Downtown u
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increases in employment-based or regional demand for retail goods and services. As
described earlier, the Downtown has emerged as a thriving and tr
that serves and attracts a highly diverse demographic, including
professionals with significant discretionary income. Its orientation is more toward tenants
that appeal to shopping as a leisure activity rather than those that satisfy major household
needs.
City efforts during the past decade, combined with favorable mar
sector investment, have more than doubled the retail performance of the Downtown. At
least some of this improvement is attributable to the improving
a more advanced restaurant sector which and other newly constructed or improved space
financed by the private sector and in many cases supported and e
There remains any number of opportunities to continue renovation
efforts in conjunction with targeting tenant outreach. As noted earlier, credit retailers (e.g.,
national or regional chains) focused in apparel, specialized home furnishing, accessory and
décor establishments, and / or other specialty categories of the type seen in comparable
Main-Street settings appear to offer particularly promising oppo
and scale in the Downtown retail sector. These opportunities are generally more likely to
occur on the southern portion of Castro Street because of the po
parcels capable of accommodating the larger floor plate requirem
The City has commissioned several studies that examine the market feasibility of attracting a
larger-format grocery store. Of course, such a tenant is likely
Asian grocery store on Castro Street. Moreover, even if feasible such a new grocery store
does not appear to be critical to the Downtowns successful evol
office workers, eating and drinking, and specialty shopping. In addition, a grocery store may
also compete directly with the Downtowns well-established dinin
cost take-out opportunities, especially to the lunchtime crowd. In this context, the City
may also want to explore opportunities for improving the format and product offerings of
Downtowns existing Asian market as another option for meeting grocery demand.
3.Harmonize Other Citywide Efforts with Downtown Development Objectives
The City is currently involved in a number of ongoing planning e
Plan Update (and its village concept), related revitalization
Housing Element, ABAGs Regional Sustainable Communities Strateg
Boulevard initiative. The City should seek to harmonize these e
they support, or are at least compatible with, its goals for the Downtown.
Ultimately, market relationships and competition with other area
change in the City will need to be addressed, including the Gene
sites and other major development opportunity sites such as the
Center and the Century Theater/retail complex site located at No
Highway 101. Although not necessarily mutually exclusive, it wi
that future retail nodes play distinct roles rather than supply overlapping goods and services
that might dilute the Downtowns role.
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In many ways the Downtown has already succeeded in carving out a
broader environment by offering a full-service environment in a
street format with an eclectic mix of civic, cultural, and employment activity. This type of
environment cannot be replicated by more formulaic retail offerings (e.g., a big box Power
Center or regional Mall). The predominance of local and indepen
ethnic and other one-of-a-kind eating and drinking venues, further support the Downtowns
unique market position. On-going City planning efforts should ensure that the Downtown can
continue to build on a market orientation that draws both local and regional shoppers seeking
a trendy, place-based retail experience, whether for dining or casual window shopping, in
contrast to the more conventional, auto-oriented malls, strip ce
anchored shopping centers that are widely available in The Peninsula.
In contrast to the Downtown, the San Antonio Center with its larger floor-plates, on-site
parking, and more cohesive marketing profile appeals to national, chain merchandisers that
attract a regional customer base seeking to meet more specific and conventional shopping
needs. Meanwhile, the Village Center concept articulated in t
designed to meet the daily shopping needs of nearby residents wi
other convenience goods. Finally, the Century Theater/retail co
accessibility from Highway 101, will likely remain more of a reg
destination offering first-run movies and other recreation uses complimented by mainstream
eating and drinking establishments.
The ongoing planning efforts for the respective venues described
preserve clear market distinctions in order to support the success of each while maintaining a
balanced and supportable retail sector citywide. Of course, giv
each of these locations, and the need to provide property owners with some flexibility in
tenanting decisions, there will inevitably be overlap in retail
planning and policy decisions seek to reinforce the primary market orientation of each
location, Mountain Views strong regional trade area demographic
support their respective market positions. For example, City po
Village Centers focus on neighborhood shopping opportunities r
entertainment-oriented uses. Meanwhile, the San Antonio Center should maintain its focus
on regional, larger-format retail offering and limit its restaurant offerings.
4.Evaluate and Prioritize Opportunity Sites
Six significant opportunity sites have been identified as a part
effort, as described above. Each of these sites has potential f
in achieving overall Downtown development objectives. However,
development opportunity and related development feasibility may
with the relative contribution of the project to broader Downtow
For example, development opportunities that increase the level of activity along the southern
portion of Castro Street may be provide particularly strong urba
a destination(s) that connects the Historic District with El Cam
should be undertaken to establish priorities for the opportunity sites focusing on those with
the least constraints and the highest benefit to the City.
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It is anticipated that EPS will subject several of the sites dis
Table 20
to further analysis based on direction from City staff and other stakeholders,
focusing on their development feasibility from a financial persp
analysis will utilize a static cash-flow pro-forma model to simulate the development of
various real estate prototypes on selected sites from the perspective of a private investor.
A key goal will be to identify economic obstacles that might pre
redeveloping into catalytic uses as envisioned. In addition, the financial feasibility analysis
will seek to determine if the current designations and standards embodied in the Downtown
Precise Plan support or deter redevelopment of various types and densities.
As a part of this effort, measures that incentivize targeted developers and businesses to the
Downtown may need to be considered, including land use policy or
incentives (e.g., set-backs, height, outdoor seating), fee defer
exemptions, permit streamlining, site consolidation, land write-downs, lease buyout, etc.
Although other downtowns have effectively utilized these policy
should be considered on a case-by-case basis as the development
opportunity sites are further explored. Such measures will be increasing important to
maintaining momentum once the Revitalization Authority ends in t
sooner, given the Governors State Budget proposals.
The Downtown Precise Plan and other public and private investment efforts throughout the years
have helped create a successful full-service downtown with quali
center, and a thriving CBD. This Report guides staff and policy
momentum the Revitalization Authority initiated in 1969. It als
focusing on current market conditions and future opportunities in the Downtown. Today, the
Downtown is vibrant, and in many respects, is Mountain Views civic, cultural, dining, and
entertainment district. While significant investment has been c
remain many opportunities detailed in the suggested Recommendati
blueprint for future planning, designing, and public and private
existing success.
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