Petaluma, California
The City of Petaluma was seeking to understand the economic effects of a proposed large-scale retail project on a vacant infill commercial site located along Interstate 101 in Sonoma County. The proposed development was highly controversial because of its “power center” format, including a Lowe’s anchor tenant, in a City already experiencing significant retail vacancies in the aftermath of the so-called “Great Recession.” Of particular interest to the City was the potential for the project to result in “urban decay” by taking market share from existing retail centers in the area, including several struggling malls and a successful downtown commercial district.
Pursuant to the California Environmental Quality Act (CEQA), EPS assisted the City of Petaluma in evaluating the economic and fiscal impacts of the proposed Deer Creek Village project, including its potential to result in urban decay. EPS conducted a detailed analysis of the retail market demand and supply conditions in the geographic area to be served by the project. The analysis took into account future population growth, as well as additional retail development expected in the Trade Area, including regional competitive supply of home improvement stores. A key issue evaluated was the degree to which Lowe’s would attract new customers to the area, thus expanding the retail base, or would capture retail sales from existing tenants. EPS also evaluated the project’s potential impact on the City’s General Fund through a sales tax revenue increase. Finally, EPS provided critical input to the required Environmental Impact Report (EIR) by evaluating the potential for the project to lead to physical deterioration and thus urban decay. EPS participated in several public hearings and assisted in preparing comments to the Draft EIR.