Desk Item Retail Information
Prepared by: Town Manager, Assistant Town Manager, Town Attorney, PPW Director, Interim Police
Chief, and Economic Vitality Manager
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 11/14/17
ITEM NO: 1
DESK ITEM
DATE: NOVEMBER 14, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: POTENTIAL AMENDMENTS TO THE NORTH 40 SPECIFIC PLAN
REMARKS:
Attachment 15 includes public comment received after the distribution of the staff report,
before 11:00 a.m. on Tuesday, November 14, 2017.
The remainder of this Desk item contains information regarding retail.
The Dynamic Retail Environment
Economic Vitality and Planning staff recently attended an Economic Development Symposium
coordinated by the Silicon Valley Economic Development Alliance (SVEDA) that provided
presentations on the challenges and opportunities facing our region including discussions on
the changing retail environment, placemaking, and transportation and mobility. SVEDA is an
initiative of Joint Venture Silicon Valley, comprised of local jurisdictions, including the Town,
focused on achieving individual and regional economic health. Staff is providing the Council
with some of the presentation details and slides to address the Council’s questions regarding
retail planning and the changing face of retail within the discussion of the potential
amendments to the North 40 Specific Plan. Staff obtained the slides from the presenters after
the distribution of the report last week.
There were multiple sessions that addressed understanding where retail is going and how to
plan for successful, vibrant commercial areas through dynamic planning and placemaking. Staff
is highlighting two of the presentations in this Desk Item and including a few of presenters’
slides with comments.
Why Retailers Make the Decisions They Do by Christine Firstenbreg
Christine Firstenberg is a Senior Vice President at Jones Lang LaSalle (JLL), has over 29 years of
retail real estate experience in the Bay Area, and founded the International Council of Shopping
Centers (ICSC) Alliance Program for Northern California, a public-private partnership
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REMARKS (cont’d):
group that works to create a bridge between the private commercial industry and public sector.
Below are illustrations and points made by Ms. Firstenberg during her presentation:
Stakeholder Perspectives
When there is a new commercial area being developed or reactivated, there are three main
stakeholder groups trying to address their specific customers’ needs. These include the
developer, potential tenants, and the local jurisdiction. Major retailers or anchor tenants see
themselves as the center of the commercial area and then look for prospective smaller retailers
and service uses that may attract additional customers to their location. Therefore, historically
real estate professionals would look to fill a major tenant space first and then program around
that anchor. A developer sees each pad as an opportunity to allow for a mix of uses to attract
the very best tenants and looks to provide spaces that can accommodate a variety of services
and uses. Developers use their own experience to recommend building pad and parking
placement. The decision makers and local residents see the commercial area as an opportunity
to fill niches that may be missing in their own daily routines, or the opportunity to pr ovide
additional local services to residents such as parks. These different perspectives are
represented in the following illustrations.
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REMARKS (cont’d):
Retail is Now Experiential
As discussed above, “historically” there were formulas for commercial areas and retail concepts
that proved to be successful. This is no longer true for the Bay Area as the region is leading the
way in which people live, work, shop, and are entertained. The typical consumer in the Bay
Area is looking for the experience a commercial space provides over just a convenient location.
The next presentation will discuss this more in depth. The following slides give an idea of how
retail used to be defined and typed, and clearly notes that this is not what the Bay Area is
currently experiencing. Retailers choose a location to make money and look for where their
customer’s shop; this is not always a science. That said, retail and real estate researchers
conduct extensive market research and analyze their data ver y closely to guide their decisions
on location choices. Quite often, the most successful and active retail areas are those with
multiple retail and service opportunities within one accessible location that allow flexibility
resulting in an organic evolution that can be as dynamic as the economic environment.
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REMARKS (cont’d):
Urban Planning and Place-Making for Dynamic Communities by David Greensfelder
David Greensfelder is the founder and managing principal of Bay Area-based Greensfelder
Commercial Real Estate which provides strategic planning, market research/analysis, and real
estate development services to communities, financial institutions, and investors. Mr.
Greensfelder was formerly Director/VP and Principal of LandMark/NewMark's Northern
California office, and managed corporate real estate for publicly traded Fortune 500 companies.
Commodity vs. Specialty Retail
Mr. Greenselder’s presentation provides perspective on retail by looking at it within two
categories, Commodity Retail and Specialty Retail.
Commodity retail is “a retailer selling goods and services which are consumed without
emotional connection by the consumer and for which the consumer’s primary motivation is
price and convenience. Examples include grocery and drug stores, mass merchants such as
Costco, Target, Walmart […]”
Specialty retailers are “selling goods and services which are consumed on a discretionary or
emotionally driven basis using discretionary funds/income, and where experience is a primary
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REMARKS (cont’d):
motivator in choosing how and where to spend discretionary time. Examples include fine
dining, clothing, luxury hard and soft goods, electronics, […]”
His presentation then goes on to explain that these may be conducted through many channels
such as brick and mortar locations (both traditional and pop-up), catalogs, online via websites,
applications on mobile devices, etc. These channels are the way in which customers access the
products they need and are different based on the product type and target customer.
Creating a Sense of Place Through Urban Design
Using these retail categories and channels of access, the presentation then focused on creating
active spaces that provide a sense of place for the retailers and the customer through urban
design and uses (zoning). Active retail provides the opportunity for the pedestrian to interact
with retailers and their spaces even if they are not shopping; whereas non-active retail is where
REMARKS (cont’d):
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REMARKS (cont’d):
the flow of the retail district is broken, causing pedestrian traffic not to continue to the next
commercial area. Inactivity may be caused by the use types or the design of the area.
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REMARKS (cont’d):
Some of the site attributes that can play into how appealing a space is for a retailer is the
quality of the parking, visibility, and accessibility. Retailers think in terms of equal or better
than their competitor. When considering a type of retail center, this presentation considered
how mixed-use can be designed to be successful. The residents alone of an immediate area will
not provide the total customer base needed for the area to be vibrant and successful. It is
important that non-residential shoppers are attracted to the space and how all customers can
easily access the commercial spaces.
Challenges and Options
Mr. Greensfelder identified some of the challenges that occur when communities and
developers begin to plan for new or reactivated commercial areas. The slides below illustrate
some of those challenges along with possible strategies and solutions. What has become
evident through staff’s own experience and through industry input is that there are roles to be
played by the policy makers, building owners, and potential commercial tenants to create
economic success and that this balance is a moving target that can be difficult to hit. His
presentation encourages realistic expectations for vibrancy and how these may not be met
through creating and enforcing expanded regulations, rather with flexibility and willingness for
short term attempts.
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REMARKS (cont’d):
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REMARKS (cont’d):
Common Themes
Across the presentations at the Economic Symposium, the idea of flexibility and customer
experience were echoed. There is a desire for many online retailers to locate a temporary
“pop-up” location during a specific season, as an amenity in an area saturated with their
customers, or as a test in a market with high potential for customer numbers to rise. This often
becomes prohibitive when land use processes are long, expensive, or too restrictive. Landlord
short term lease options are also a large part of this conversation. There was also a consensus
from the presenters that the large scale “power shopping centers” that were built out over the
past few decades are no longer proving economic success and that we will likely experience
retail pruning and space size shrinkage to make way for entertainment and experience-based
retailers.
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Attachments previously received with October 3, 2017 Study Session Report :
1. Town Council Suggestions for Potential Amendments to the adopted North 40 Specific Plan
2. December 15, 2016 Planning Commission Staff Report (with Exhibits 1 -8)
3. December 15, 2016 Planning Commission Addendum Report (with Exhibit 9)
4. December 15, 2016 Planning Commission Desk Item Report (with Exhibit 10)
5. December 15, 2016 Planning Commission Verbatim Minutes (131 pages)
6. January 26, 2017 Planning Commission Staff Report (with Exhibit 11)
7. January 26, 2017 Planning Commission Addendum Report (with Exhibit 12)
8. January 26, 2017 Planning Commission Desk Item Report (with Exhibit 13)
9. January 26, 2017 Planning Commission Verbatim Minutes (115 pages)
10. Public Comments received 11:01 a.m. Wednesday, May 10, 2017 to 11:00 a.m. Thursday,
September 28, 2017
11. Potential amendments based on GPC and PC discussions (including Exhibi t A)
Attachments previously received with October 3, 2017 Desk Item Report :
12. Public Comments received 11:01 a.m. Thursday, September 28, 2017 to 11:00 a.m. Tuesday,
October 3, 2017
Attachments received with this Special Meeting Report:
13. North 40 Hotel Site Assessment
14. Public Comments received 11:01 a.m. Tuesday, October 3, 2017 to 11:00 a.m. Friday,
November 10, 2017
Attachments received with this Desk Item:
15. Public Comments received 11:01 a.m. Friday, November 10, 2017 to 11:00 a.m. Tuesday,
November 14, 2017