HomeMy WebLinkAboutStillwater Downtown Plan December 1987STILLWATER DOWNTOWN PLAN
Downtown Stillwater 1987
Conditions and Analysis:
Economic Analysis
December 1987
Table of Contents
Page
SUMMARY AND RECOMMENDATIONS . . . . . . . . . . . . . . . 1
Housing Development . . . . . . . . . . . . . . . . . 3
Office Space Development . . . . . . . . . . . . . . . 4
Calmer---ial Opportunities . . . . . . . . . . . . . . . 5
INTRODUCTION . . . . . . . . . . . . . . . . . . . . 6
ECONOMIC ANALYSIS . . . . . . . . . . . . . . . . . . . . 7
Review of Past Work . . . . . . . . . . . . . . . . . 7
Stillwater Comprehensive Plan . . . . . . . . . 7
National Main Street Center, Resource
Team Report for Stillwater, MN . . . . . . 9
The Economic Impact of the Woodland Lakes
Mall in the City of Stillwater, MN . . . . 11
Economic Development Strategy, Phase I and II. . 12
Phase I . . . . . . . . . . . . . . . . . . 13
Phase II . . . . . . . . . . . . . . 14
Conclusion. . . . . . . . . . . . . . . . . . . 15
DEFINITION OF STILLWATER'S SPHERE OF INFLUENCE . . . . . 17
Trade Area Definition . . . . . . . . . . . . . . . . 17
Income and Population . . . . . . . . . . . . . . . . 17
Age Distribution of Trade Area . . . . . . . . . . . 21
Schooling in the Trade Area . . . . . . . . . . . . . 22
Summary. . . . . . . . . . . . . . . . . . . . . . . 23
REVIEW OF PAST 'TRENDS AND CURRENT CONDITIONS . . . . . . 24
Description of Downtown . . . . . . . . . . . . . . . 24
Cam►e.rcial Mix. . . . . . . . . . . . . . . . . . . 25
Trend Analysis . . . . . . . . . . . . . . . . . . 26
Retail Trade . . . . . . . . . . . . . . . . . . . . . 26
Summary. . . . . . . . . . . . . . . . . . . . . . . 30
Table of Contents (Page 2)
Page
SURVEY SUMMARY . . . . . . . . . . . . . . . . . . . . 32
Resident Survey Summary . . . . . . . . . . . . . . 32
Methodology . . . . . . . . . . . . . . . . . . 32
Summary. . . . . . . . . . . . . . . . . . . . 33
Visitor Survey Summary . . . . . . . . . . . . . . . 34
Methodology . . . . . . . . . . . . . . . . . . 34
Summary. •. . . . . . . . . . 35
Downtown Worker Survey Summa.ry. . . . . . . 36
Methodology . . . . . . . . . . . . . . . . . . 36
Summary . . . . . . . . . . . . . . . . . . . . 37
SUMMARY OF OTHER PRIMARY RESEARCH . . . . . . . . . . . 39
FocusGroups . . . . . . . . . . . . . . . . . .
. . 39
Perceptions of Downtown Stillwater . . .
40
Who shops in downtown Stillwater?. . . . .
. . 41
Physical Condition . . . . . . . . .
. . . 43
Development Opportunities. . . . . . . .
. . . 43
Downtown Retail Opportunity. . . . . . . .
. . 44
Light Industry . . . . . . . . . . . . .
. . . 46
Office Buildings . . . . . . . . . . .
. . . 46
Housing . . . . . . . . . . . . . . .
. . . 47
Transportation Issues . . . . . . . . . .
. . . 47
Parking . . . . . . . . . . . . . .
. . . 47
Bridge . . . . . . . . . . . . . . .
. . . 49
North End . . . . . . . . . . . . . . . .
. . . 50
City Involvement . . . . . . . . . . . .
. . . 52
Conclusion . . . . . . . . . . . . . . .
. . . 53
Office Space Demand . . . . . . . . . . . . .
. . . 54
Introduction . . . . . . . . . . . . . .
. . . 54
Survey Results . . . . . . . . . . . . .
. . . 54
Housing Demand . . . . . . . . . . . . . . . .
. . . 55
Introduction . . . . . . . . . . . . . .
. . . 55
Demand . . . . . . . . . . . . . . . . .
. . 56
Table of Contents (Page 3)
Page
Survey of Similar Communities. . . . . . . . . . . . 57
Introduction . . . . . . . . . . . . . . . . . . 57
Canparison Camnunities . . . . . . . . . . . . 57
Summary . . . . . . . . . . . . . . . . . . . . 59
DEVELOPMENT OPPORTUNITIES . . . . . . . . . . . . . . . 61
Ethnic Theme . . . . . . . . . . . . . . . . . .
. . 62
Shoe Store . . . . . . . . . . . . . . . . . . .
. . 63
Children's Specialty Shop . . . . . . . . . . . .
. . 63
Theatre/Community Building . . . . . . . . . . .
. . 64
Health Food Store/Coffee, Tea Specialty Shop . .
. . 65
Non Alchohol Cooler . . . . . . . . . . . . . . .
. . 65
Floral shop . . . . . . . . . . . . . . . . . . .
. . 66
Marina Store . . . . . . . . . . . . . . . . . .
. . 67
Laundromat . . . . . . . . . . . . . . . . . . .
. . 69
Hospitality Center and Local Coordinator . . . .
. . 69
Artist's Village . . . . . . . . . . . . . . . .
. . 71
Hotel Development . . . . . . . . . . . . . . . .
. . 72
Gourmet Food Shop . . . . . . . . . . . . . . . .
. . 75
Conclusion . . . . . . . . . . . . . . . . . . .
. . 76
LIST OF FIGURES
Figure No. Title Page
1 Age Distribution of Stillwater 21
LIST OF MAPS
Maw No. Title Page
1 Local Sphere of Influence 18
LIST OF TABLES
Table No. Title Page
1 City of Stillwater -Sphere of Influence.
Population and Income 19
2 Per Capita Adjusted Gross Inane
Comparison, 1984 20
3 Percent of Residents Over Age 25 who
Canpleted College 22
4 Total Retail Sales Comparison
City of Stillwater and Washington
County, 1980-1982 27
LIST OF TABLES (Page 2)
Figure No. Title Page
5 Total Retail Sales Comparison
Stillwater/Oak Park Heights and
Washington County, 1980-1986 28
6 Retail Sales Data For Stillwater By
Major Retail Category, 1982-1986 29
7 Camnunities Selected For F�cploratory
Survey 58
8 Comparison of Hotel Roans Per Capita
For Selected Canmunities 72
9 Origin of Overnight Visitors 74
SUMMARY AND Rfr-OMKENDNPIONS
Stillwater's downtown has undergone considerable change over
the past 15 years, from a Central Business District that
serves primarily local residents to one that relies signifi-
cantly on non -local support. This change downtown is most
evident in the growth of Miscellaneous Retail establishments
and Forting and Drinking Places, both of which owe their sur-
vival, in large part, to a healthy and growing local tourist
trade. According to an Economic Impact Study completed in
June, 1986 Miscellaneous Retail establishments in the City of
Stillwater increased by 285 percent between 1970 and 1985,
while Eating and Drinking Places showed a gain of 100 percent
over the same time span. While a few of the new miscella-
neous retail shops are activities that are primarily fre-
quented by residents (i.e. jewelry and sporting goods) the
majority of the new businesses are antique stores, gift
shops, and other miscellaneous shopping good stores, all of
which are mostly patronized by non-residents.
This increase in non -local patronage downtown has coincided
with a gradual loss of resident or more local market -oriented
activities. To be sure, a great deal of local market
oriented activity still exists downtown but same of it has
been lost to a developing commercial district along Highway
36 at the periphery of Stillwater. For the most part, the
retailers on Highway 36 have established themselves as
serving the general community market, while downtown
retailers have moved toward serving a market which is predo-
minately from outside the immediate community. The Economic
Impact Study indicates that this change in market patterns
will likely continue only at a slower pace, with the replace-
ment of more traditional activities downtown (i.e. hardware
stores, drug stores, etc.) by additional visitor or tourist -
oriented activity.
It is important, however, that Downtown Stillwater continues
to cater to the local market. The visitor or tourist market
is highly seasonal and it is doubtful that many of the shops
that are otherwise tourist -related can survive the slow
winter months without some local patronage. This point was
emphasized by downtown's decision makers during Focus Group
sessions held in August, 1987.
The Focus Group participants also pointed out the need to
keep Stillwater a "real town". Stillwater residents,
according to the Focus Groups, often feel like their town has
been taken over by the tourists, regional shoppers, and other
non -locals. Residents need to feel Downtown Stillwater is
still there for then if the Central Business District is
going to exude a sense of community, or as the Focus Group
so aptly put it, a "real town" atmosphere.
Despite the loss of local market -oriented retail business,
Downtown Stillwater remains important to local residents. A
wide variety on non -retail establishments exist downtown
entailing a broad range of economic activities. Those acti-
vities include manufacturing establishments, finance,
insurance and real estate establishments and a wide variety
of services establishments (i.e. beauty/barber shops, legal
services, social services etc). This diversity should be
maintained to assure local patronage and a more stable down-
town economy.
Manufacturing is often questioned as a proper land use for
downtown. Noise, truck traffic and parking are frequently
cited as detractors from the downtown's shopping atmosphere.
Nevertheless, manufacturing activity brings people downtown
and retailers benefit greatly from their lunchtime shopping
trips and patronage of downtown eating establishments.
4
While heavy industry which employs lower numbers of people
may be unsuitable for a downtown location, there are a number
of light manufacturing types of development that would be
most complimentary and compatible with traditional downtown
activities. According to the Focus Group participants, the
ideal type of light industry for Downtown Stillwater would be
one that is clean (no pollution), does not have a lot of
daily customers (would not add to parking problems), and does
not require many trucking services (would not add to traffic
congestion). To attract these types of industries, the Focus
Groups felt that reasonably priced space, in the form of an
incubator building, should be made available.
The basic charges of this portion of Stillwater's Downtown
Plan are to identify new development opportunities for the
City's Central Business District. Opportunities that
represent a great range of activities that will maintain and
promote the downtown's diversified economy. An economy that
enjoys the prosperty made possible by non -local trade,
but also values local patronage. A brief description of these
opportunities follows.
Housing Development
The Focus Groups stressed the importance of developing
housing in the downtown area and suggested the former prison
site as the best location for such development. The groups
felt that both rental units and condoniniums would be
feasible in Downtown Stillwater if adequate parking were to
be available.
Interviews with apartments complex managers in the city of
Stillwater further evidence this ne-ad for downtown rental
units. Senior Citizen housing, especially for low -to -medium
priced units, seen to be in strong demand. But even more
high-priced apartments appear to be a possibility.
3
Given the development of condominiums along the St. Croix
River in other nearby cannunities, it appears Stillwater's
Central Business District could also support such housing
development.
Office Space Development
Quality office space is scarce downtown and it is the belief
of Focus Group participants that if it were to be provided a
strong demand would exist. This, however, is counter to the
opinions of several realtors and office space managers in the
Stillwater area. It is their belief that an abundance of
quality office space is already available elsewhere in the
area and that downtown would not be able to compete with
these other developments in terms of parking space and room
for expansion. There is also some questions whether or not
downtown office space would be cost-canpetitive with can -
parable space offered outside the Central Business District.
None of those interviewed see a need for additional office
space downtown now, or in the foreseeable future.
A new office development on the north end (possibly the
former prison site) would offer sufficient space for parking.
An investment of this magnitude would probably be necessary
to compete with office complexes outside the Central Business
District. Otherwise, there appears to be sufficient office
space of moderate quality available downtown at present.
4
Commercial Opportunities
In addition to housing, the following commercial oppor-
tunities are recamlended as possible for a downtown location.
- Shoe Store
- Children's Specialty Shop
- Theater/Camlunity Building
- Health Food Store/Coffee, Tea, Specialty Shops
- Non -Alcohol Cooler
- Floral Shop
- Gourmet Food Shops
- Marina Store
- Laundromat
- Hospitality Center
- Hotel
- Artist's Village
For a brief description on why the above carmercial develop-
ments are thought to be feasible, please refer to the
Econanic Analysis portion of the Stillwater Downtown Plan.
In conclusion, the future appears to be bright for
Stillwater's Central Business District. The City has the
luxury of considering "what type" and "how much" development
should occur in the CBD and does not have to dwell on the
problem of disinvestment as many communities do. This down-
town planning process reveals that local officials are not
taking the responsibility of guiding future development in
the CBD lightly. We firmly believe that as long as the City
can facilitate a balance of activities among all potential
CBD users, the district will continue to prosper and remain
the vibrant "real town" that so many have cane to enjoy.
5
INTRODUCTION
This report consists of an analysis of the economy of
Stillwater's Central Business District (CBD). The general objec-
tives of this analysis included to analyze past and current
economic activity in downtown Stillwater and to project
likely future trends in economic activity in the CBD. We
have also identified and evaluated specific types of develop-
ment opportunities (both camnercial and noncanmercial) for
downtown Stillwater and made recommendations of those most
likely to succeed in the CBD. Finally, the results of our
analysis are interpreted in terms of impacts and rela-
tionships to other elements of the downtown plan.
The econanic analysis is organized as follows. First a
review of relevant past work will be presented. This will be
followed:by a definition of Stillwater's local sphere of
influence based on a location gravity model. This discussion
is followed by an analysis of past trends and current con-
ditions of the CBD.
This review of secondary data will be followed by a
discussion of the primary data collected and analyzed. This
includes a discussion of the resident, visitor, and downtown
worker surveys conducted in August and September of 1987.
Several other primary data sources were utilized to analyze
downtown business persons perceptions of the economy, office
space demand, and demand for housing in the CBD. The final
primary data source to be utilized was an analysis of the
development trends in other similar cities around the
Midwest.
These segments of the econanic analysis are followed by spe-
cific recommendations of what have been determined to be
development opportunities that can be supported in
Stillwater's Central Business District.
0
BCONOMIC ANALYSIS
Review of Past Work
In an attempt to provide a foundation for this study of
Stillwater's downtown, a review of existing documents related
to downtown development was undertaken. The documents
reviewed include: Stillwater Comprehensive Plan, National
Main Street Center: Resource Team Report For Stillwater,
Minnesota, The Econcmic Impact of the Woodland Lakes Mall on
the City of Stillwater, Minnesota as well as Phase I and II
of the Stillwater Area Economic Develoo ment Strategy.
Stillwater Comprehensive Plan:
The Stillwater Comprehensive Plan was prepared in August of
1979, so it is somewhat dated. The Comprehensive Plan
suggests that plan concepts for for the CBD have been essen-
tially the same since the first plan was prepared for
Stillwater in 1918. Traffic and parking problems were high-
lighted in the 1979 plan and recommendations for alleviating
those problems that are now closer to reality (i.e. new
wisconsin/Minnesota bridge etc.) were suggested.
Stillwater's proximity to the Twin Cities metropolitan area
was suggested to be Stillwater's greatest economic asset.
The plan suggests, "the scenic and recreational assets of the
St. Croix River region will not go unnoticed by people
wanting the best of both worlds including convenience to a
large urban center with jobs and recreational/cultural diver-
sity and convenience to the open spaces and natural environ-
ment of the St. Croix Valley".
7
The downtown plan recommended many economic and development
strategies for the CBD that are still applicable today. They
include:
* Development of suitable housing for the elderly.
* Improved boat docking facilities along the river to
maximize summer potential for attracting custo-
mers for cafes, entertainment spots, and
general increased usage of the CBD.
* Further development of the Downtown should recognize
the various functions (retail, financial, general
office, housing, entertainment, etc.) to avoid
improper mixtures that detract fran the full econcxnic
potential of proper locations. Certain uses such as
lumber yards, car dealerships, and centrally located
service stations should be encouraged to leave the
Downtown for better locations and to make room for
expansion of more appropriate and intense activities.
* Future Downtown development should be of the highest
quality possible. Stillwater's location on the St.
Croix: River, which is now part of the Wild and
Scenic River System, dictates that the town develop
and maintain a high quality environment which will
be in keeping with the area's superior natural
attractions. A high quality environment will excite
people to return to Stillwater to shop, vacation,
and live.
* Preservation of all buildings that are structurally
sound and that can be utilized in some manner.
0
National Main Street Center, Resource Team Report for
Stillwater, Minnesota:
In spring of 1984 a Resource Team Report developed by the
National Main street Center was presented to the Stillwater
City Council. Resource team members represented over 25
years of direct experience in small city downtown revitaliza-
tion activities and another 10 years in related historic pre-
servation and cam -unity conservation experience.
While the group was made up of four outsiders who were in
Stillwater for only three and one-half days all four members
had been well briefed in advance and were well acquainted
with the issues facing downtown Stillwater as well as some of
the unique aspects of the caTmunity.
Sane of the general development recommendations made by the
Main Street Team include:
General Development/Adaptive Reuse Opportunities in the
Downtown.
A. Retail.
1. The resource team sees additional retail oppor-
tunities "across the board" aimed at the local
native market, the general Stillwater market, the
Twin Cities extended specialty market, and the upper
Midwest tourist/recreational market.
2. The immediate retail growth should be aimed at
the more stable local markets.
3. Will .require market research and promotional
efforts beyond present practices/levels of
sophistication to reach market opportunity
effectively.
E
4. Opportunities should be thoroughly explored to
expand/strengthen existing business operations
as well as attracting new operations.
B. Office.
1. The resource team sees tremendous future office
potential for the entire Stillwater area as well
as downtown, including the attraction of large
office tenants frcan the Twin Cities area; this
phenamenon is likely to follow the increasing
in -migration of upper -echelon white collar mana-
gement.
2. At this time Stillwater lacks any vehicle to
assist serious larger -scale office tenant relo-
cation and development downtown.
C. Housing.
1. The market for housing downtown is significant
in the view of the resource team but requiring a
much 'nigher understanding of market
demand/trends because of the highly specialized
nature of that potential.
2. The resource team sees opportunities for exten-
sive up -scale upper story conversions aimed at
young singles, "empty-nestor" couples--45 to 60
years old, 'Rain Cities professinals and im-
migrating young childless couples.
10
3. Also opportunities for high to moderate cost
multi -family (rental?) housing around the
periphery of downtown; needs to be done with
more cost/quality control than sane other recent
similar development.
4. Despite other strong market potential, the
resource team believes Main Street should
explore some moderate income multi -family
housing development aimed at area senior citi-
zens; this would meet appropriate local needs
and would help moderate sane of the alienating
changes transpiring downtown.
The Economic Impact of the Woodland Lakes Mall on the City of
Stillwater, MN:
Another recent study of the Stillwater economy was an analy-
sis of the economic impact of the proposed Woodland Lakes
Mall (not centrally located in the CBD) on the City of
Stillwater. This mall is in the process of being developed
outside of the City's CBD. A summary of the major findings
of this analysis are as follows:
Actual estimates of the economic impact of the mall on down-
town merchant's sales varied depending upon the type of acti-
vity. Gift shop owners suggested the impact would be rather
minimal, perhaps reducing the rate of growth in their sales
or, at worst, causing a minor decline (5%). Similar estima-
tes were also forwarded by the other miscellaneous shopping
goods managers. In all these cases, the respondents felt
that they were typical of their industry and, therefore, did
not expect other like businesses to be impacted differently.
11
For the majority of the other stores contacted, their predic-
tion of impact on sales were startlingly consistent. Nearly
all suggested sales reductions of 20-25 percent in the first
year would be realized. This was true of the clothing
stores, shoe stores, sporting goods stores, department
stores. The issue of relocations to the mall is also a con-
cern because of the possible vacancies this could create in
the CBD.
In summary, the adverse impacts of the mall will cause about
60 to 75 jobs to be lost in the downtown and will cause the
vacating of three to five storefronts due to failure of the
business and, perhaps, an additional two to four due to relo-
cations.
Much of this will not occur immediately and, as a result,
will not appear as being severe. Rather, the impact is more
likely to be expressed in higher rates of turnover in
ownership of businesses, an occasional closure, and surpassed
property values for the downtown.
The construction of the mall will accelerate the trend that
rs -
a more
tour
Economic Development Strategy, Phase I and II:
Phase I and Phase II of Stillwater's overall Economic
Development Strategy included an in depth look at the issues
facing Stillwater in terms of its economy as well as
suggesting specific economic activity that could be expanded
or attracted to Stillwater.
A summary of the finding of these analyses as they relate to
the CBD will now be presented.
12
Phase I
The principal factors and issues which have affected and will
continue to affect economic development in the Stillwater
Area were identified through a series of exploratory inter-
views, a review of published materials, and observations.
These principal factors and issues, which have been described
in terms of potentials and constraints, may be summarized as
follows:
* Quality of Life - The high quality of life in the
Stillwater Area represents a potential for economic
development in terms of the ability to attract people
and investment into the community. However, this is a
strength which will require investment and caution to
maintain and preserve.
* Minnesota Business Climate - Minnesota has an image as
a high tax State and one in which the costs of doing
business are higher than they could or should be. For
the Stillwater Area this problam is compounded because
Wisconsin is perceived as having a better environment
for business. However, in pursuing economic develop-
ment, the Stillwater Area should accept the state's
business climate as a "given," and emphasize the com-
munity's other_ assets and target activities accor-
dingly.
* Local Business Climate - The local business climate,
including receptivity to and cooperation with new
business and industry, is crucial to a successful eco-
nomic development effort. An improved business cli-
mate in the Stillwater Area is making it more
attractive for economic development. While a coopera-
tive approach is encouraged, it is important to think
in terms of quality and facilitating economic develop-
ment which is appropriate for the community.
13
* Proximity to the Twin Cities - The Stillwater Area's
economic development efforts can benefit significantly
because of the cammunity's proximity to the Twin
Cities. Potential linkages with existing businesses
and industries in the Twin Cities should be exploited.
Also, the carumunity should use its access to the
resources of the 'win Cities as a major consideration
in its strategy for economic development.
Phase II
The Targeted Industries Analysis presented in Phase II of
this report identifies the types of economic activity which
could be attracted to, or expanded, in the Stillwater .Area.
These are the activities toward which those responsible for
marketing should be concentrating their efforts.
Service activities have been and should continue to be a
major source of economic growth nationally and in Minnesota.
The Stillwater Area should target those service activities
which are, or have the potential to be, largely or entirely
"basic" (i.e., serving non -local markets). Service
industries which are becoming increasingly basic include
advertising, accounting, architecture and engineering,
banking and financial services, education and training,
employment services, health care, franchising, insurance,
consulting of all kinds, leasing, transportation, computer
services, and communication. As a strategy in targeting ser-
vice firms, the Stillwater Area may do best to attract small
specialized service firms to the community or to encourage
start-ups by people already in the community. The principals
of small specialty service firms are likely to be well-
educated, professional types to wham the Stillwater Area and
the lifestyles available there are very appealing.
14
Market -oriented activities which may offer opportunities for
expansion in the Stillwater Area were identified using the
comparative economic base analysis technique. Market -
oriented activities which have below -average employment
levels in the Stillwater Area include:
Veterinary services
Radio & TV broadcasting
Motor vehicles & auto equipment wholesale
Electrical goods wholesale
Miscellaneous non -durable goods wholesale
New and used car dealers
Wanen's ready-to-wear stores
Furniture and home furnishings
Security and commodity services
Insurance agents, brokers and services
Laundry, cleaning and garment services
Photographic studios (portrait)
Nursing and personal care facilities :Hospitals
Conclusion:
This brief summary of the results and recommendations of the
various reports pertaining to the economic state of
Stillwater, especially its downtown point to some interesting
conclusions. The first being that the major and persistent
problem perceived in Stillwater's downtown is traffic
congestion and parking. Certainly this traffic problem is
real and annoying but is also a symptom of the health and
vibrancy of the CBD. This physical problem identified in a
plan almost 10 years old can be addressed through physical
modification of the CBD's infrastructure. Such changes would
be welcome by visitors, residents and CBD employees alike.
15
Another more poignant issue that has been facing Stillwater's
Central Business District is the issue of the CBD's meta-
morphosis from a primarily locally based market to a more
tourist/visitor and specialty market base. Given
Stillwater's proximity to the Twin Cities and its incredible
gift of natural features, this change was imminent. The for-
ces of the suburban shopping mall only hastened the change in
the case of Stillwater's CBD.
However, the question "Who is the downtown for?", still
remains. This question should most appropriately be
addressed by City officials and .residents of Stillwater in
terms of future CBD policy. It has been proven, however,
that the majority of the population will not economically
subsidize nostalgia or historic atmosphere regardless of how
unique. This explains why shopping malls flourish on the outskirts
of a very unusual and historic City, such as Stillwater.
From a strictly economic perspective, this shift to a visitor
based economy is simply unstopable. Therefore, the City
should accept this change in the economic base of the CBD and
promote the uniqueness that has helped hasten the transformation.
On the other hand, the City must recognize that the CBD is
not exclusively used by visitors and attempt to promote some
balance in the types of activities it supports. In other
words the CBD should not be encouraged to serve exclusively
the tourist market. As an example, a specialty gourmet food
shop that primarily serves the tourist market in the summer
could also provide catering services to the local market year
round. A "Rivertown Cooler" non-alcholic drink product could
be an effective marketing tool for historic Stillwater as a
whole, while still providing jobs and expanding the local
economic base. We reco mend that the City recruit and sup-
port new tourist based industries that also have some tie to
the local economy. This strategy will help elevite some of
the seasonal highs and lows that "tourist only" retailers now
face and add stability and diversity to the local economy.
16
DEFINITION OF STTraMm>' a' S SPHERE OF INEWENCE
Stillwater has several spheres of influence. The trade area
as far as visitors/tourists are concerned includes primarily
the Twin Cities metropolitan area. However, Stillwater
attracts visitors form Western Wisconsin, the State of
Minnesota, and fran around the world.
The local trade area, however, is what will be defined here.
As shown in Map 1 the local sphere of influence includes
roughly Marine on St. Croix to the north, Sanerset to the
east, Bayport to the south and includes only up to
Stillwater's coporate boundaries to the west.
Trade Area Definition
The means of defining Stillwater's trade area was an economic
gravity model called "Reilly's Law of Retail Gravitation".
Basically, the empirical model determines the City's trade
area by taking into account the size and distance of car-
peting urban centers. The theory being a custaner patronizes
a community, in direct proportion to the population of the
community and the distance from where he or she resides.
Generally, people are willing to drive a longer distance to a
larger urban center, primarily because of the greater diver-
sity in goods and services it provides. Because of the unu-
sual geographic situation of the City of Stillwater sane
intuitive judgment was used in determining the Western
boarder of the trade area.
Income and Population
Based on the boundries set by the gravity model, with modifi-
cations, a qualitative description of the trade area can be
made.
17
Map 1
S TIL.LWA 1 EFL C END.
SPHERE OFINFLUENCE
Del lwood
96
Mohtomedi
Birchwood
Wlllerni■
�JCII
T0 ml
New
Richmond
Hudson
Hudson
M SPHERE OF INFLUENCE
18
Table 1
City of Stillwater
Sphere of Influence
Population and Income
Total
19841
1984 AGI2
Influence
Municipality
Population
Per Capita
Area Inane
Wisconsin
V. Sanerset
885
$10,010
$ 8,858,850
T. Sanerset
1,997
8,239
16,453,283
T. St. Josephs
2,457
8,692
21,356,244
Minnesota
Stillwater
12,770
$14,569
$186,046,038
Marine on St. Croix
550
20,061
11,033,327
Bayport
2,870
12,448
35,840,031
Oak Park Heights
3,190
3,538
11,286,151
T. May (1/2)
1,095
6,692
7,327,608
T. Stillwater
1,700
6,471
11,001,099
T. Baytown (1/2)
415
5,189
2,153,453
Total
27,929
$11,148
$311,356,084
Source: 1. Population Data fran Wisconsin Department of
Administration Estimates.
Population Data fran Minnesota State Demographer,
1984 Estimates.
2. 1984 Adjusted Gross Income Per Capita, Wisconsin
Department of Revenue. 1984, Minnesota
Department of Revenue.
19
As shown in Table 1, Stillwater's sphere of influence had an
estimated population of 27,929 and a total adjusted gross
income of approximately $311 million in 1984.
Washington County retail sales overall in 1984 were estimated
at about $513 million. Washington County residents spent
about 39 percent of their income on retail sales in 1984. If
we assume that Stillwater trade area residents also spend
about 39 percent of their income on retail goods, about $121
million was spent by trade area residents in 1984.
On the other hand, retail sales data for 1984 for the Cities
of Oak Park Heights, Marine on St. Croix, and Stillwater
suggest that over $160 million were spent in the trade area
on retail sales. This suggests that the Stillwater trade
area is capturing retail sales dollars from outside of the
defined trade area. However, because of the strong market
draw of the Twin Cities and suburban malls, Stillwater's CBD
also experiences a good deal of leakage.
The adjusted gross income per capita of the trade area is
$11,148. As shown in Table 2, Stillwater's trade area
adjusted gross income per capita is higher than the per
capita adjusted gross incomes of either Washington County or
the State of Minnesota.
Table 2
Per Capita Adjusted Gross Income Comparison, 1984
Stillwater Trade Area $11,148
Washington County $10,587
State of Minnesota $ 8,985
Source: Minnesota Department of Revenue, 1984.
RE
This analysis of per capita income supports the more upscale,
high quality development opportunities being suggested
in the recommendations section of this report.
Distribution of Trade Area
Precise age cohort data was not readily available for the
entire trade area. The City of Stillwater makes up about
half of the trade area. The age distribution of City resi-
dents was therefore compared to the age distribution of the
Minneapolis/St. Paul SMSA and to the State of Minnesota.
(See Figure 1)
0.19
0.18
0.17
0.16
0.15
0A4
z
0 0.13
3
0.12
a 0.11
O
a 0.1
0 0.09
Z 0.08
U 0.07
a
0.06
0.05
0.04
0.03
0.02
0.01
0
Figure 1
Age Distribution - 1980
<5 5-9 10-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75+
AQE COHORTS
® STILLWATER SMSA ® MINNESOTA
Source: U.S. Bureau of the Census, 1980.
91
As shown in Figure 1, the City of Stillwater has consistantly
higher percentages of childred aged 14 and under than either
the SMSA or the State of Minnesota. The City of Stillwater.
and the SMSA also have a higher percentage of their popula-
tion in the 25 through 44 age category.
Schooling in the Trade Area
The percentage of persons in the City of Stillwater with 1-3
years of college is 20 percent while another 22 percent
completed at least 4 years of college. In the SMSA, 19 per-
cent of those over age 25 campleted 1-3 years of college
while 22 percent of those over 25 completed 4 or more years
of college. As shown in Table 3, only 17 percent of those
over 25 in the State of Minnesota canpleted 1-3 years or 4 or
more years of college.
Table 3
Percent of Residents Over Age 25 who Canpleted College
City of Minneapolis/ State of
Stillwater St. Paul SMSA Minnesota
1-3 years of college 20% 19% 17%
4 + years of college 22% 22% 17%
Source: Census of Population and Housing, 1980.
22
Summary
In conclusion, the local Stillwater trade area had a popu- .
laiton of almost 28,000 in 1984. The total adjusted gross
income in the area was about $311 million in 1984. The
Stillwater trade area has a significantly higher adjusted
gross income per capita than the State of Minnesota overall.
The City of Stillwater has slightly more children under age
14 than the State of Minnesota or the SMSA. The City also
has more persons aged 25 through 44 than the State overall.
In terms of education, Stillwater residents have a higher
propensity toward a college education than the State of
Minnesota overall.
This income and demographic analysis suggests that more
upscale, high quality development can be supported by trade
area residents.
23
REVIEW OF PAST TRENDS AND CURRENT C:C NDITICNS
A growing market is necessary for both a downtown area and
for surrounding shopping malls to prosper in the long term.
However, a growing market does not assure Stillwater that it
will be able to capture its potential market. Studies have
shown that smaller communities appear to be losing retail
customers to their larger urban neighbors. Stillwater's
proximity to the Twin Cities, and numerous competitive
shopping areas makes predicting a higher trade capture rate
less likely.
According to the analysis of the Economic Impact of the
Woodland Lakes shopping mall, there were 94 retailers in
downtown in 1985, up from 77 such establishments in 1980 and
59 in 1975. In a 1987 walking survey of the CBD 110 retail
establishments were identified.
Description of Downtown
The downtown includes all or parts of nineteen city blocks
and a total land area of roughly sixty acres. There is a
wide variety of economic activities occurring in Stillwater's
downtown. A survey conducted in the summer of 1987, iden-
tified 185 businesses employing approximately 2,338 persons
in downtown Stillwater. About one fifth of all jobs in
Stillwater are located in the downtown area.
24
Commerical Mix
One of downtown Stillwater's strengths is its mix of econanic
activities. Many of the business types present in downtown
are canplementary. The proximity of numerous types of acti-
vity enables a person to accanplish several objectives in one
trip. Thus, downtown's "drawing power" is enhanced and is
stronger than if it was only a retail center. The can-
bination of activities in downtown Stillwater, particularly
Retail Trade, Finance, Insurance and Real Estate (Fire), and
Service activities, are rarely, if ever, available in one
shopping center or mall.
The ability to do comparison shopping is also an important
strength of a downtown or modern shopping center. This
strength exists in downtown Stillwater, but not to the degree
that is typical of a planned shopping center. For example,
within the Apparel and Accessory Stores category of retail
trade there were twelve establishments in downtown
Stillwater. This enables comparison shopping, especially
among the several stores in downtown Stillwater. The lack of
canparison shopping potential within certain other categories
in the CBD (shoe store for example) tends to detract fran the
downtown's drawing power.
There are also certain types of retail trade activity which
would typically be in a planned shopping center which do not
exist or which are underrepresented in downtown Stillwater.
Most notably, there is not a department store in downtown
Stillwater. Few shopping centers are developed without one
or more department stores as anchors because of their ability
to attract shoppers. Downtown Stillwater's retail mix inclu-
des a relatively small number of Apparel and Accessory
stores. Apparel and Accessory stores are important attrac-
tions in downtown Stillwater, but the "underrepresentation"
within this category places downtown at a relative disadvan-
tage in competing with planned shopping centers.
25
The mix of economic activities in downtown Stillwater also
causes some problems. For example, manufacturing and whole-
sale trade activities are not always compatible with Retail -
Trade, FIRE, and Service uses in the downtown area.
Resulting land use conflicts (e.g., increased truck traffic,
outdoor storage, noise, etc.) may detract from the drawing
power of the downtown. Again, to compare the downtown area
to a modern shopping center, such centers are generally
develped as a "planned unit" and uses which are incompatible
with retailing are not permitted. At the same time, the mix-
ture and number of activities in the downtown area means a
larger daytime population in the Central Business District.
Trend Analysis
The purpose of the trend analysis is to determine what
changes have taken place during the past 15-20 years in the
community. In particular, the commercial mix in the downtown
area is analyzed. Based on data which document past trends,
as well as information and insights from merchant interviews,
projections of future activity in the downtown can be made.
Retail Trade
Retail in Stillwater, as measured by volume of sales, has
grown steadily during the past 20 years. According to the
Census of Retail Trade, total retail sales in Stillwater in
1967 was approximately $21.2 million. In 1982, total retail
sales volume had increased to $104.2 million. (See Table 4.)
The Census data indicated that Stillwater's share of
Washington County's total sales declined between 1967 and
1982. However, since there is a large amount of retail acti-
vity in Oak Park
Heights, Stillwater and Oak Park Heights should be considered
one trade center. The Census doesn't provide retail trade
figures for Oak Park Heights before 1982. The Minnesota
Department of Revenue's retail trade figures for Stillwater
include data for Oak Park Heights. Retail sales figures for
Table 4
Total Retail Sales Comparison
City of Stillwater and Washington County
1967-1982
Percent
1967 1972 1977 1982 Change
City of Stillwater $21,204 $ 29,918 $ 53,174 $104,170 +391.3
Washington Co. 69,748 128,506 237,780 411,134 +489.5
Stillwater as a
% of County 30.4 23.3 25.3 25.3 ----
Source: Census of Retail Trade, for years noted.
Retail sales figures for Stillwater -Oak Park Heights for
1980-1986 are shown in Table 5. This data suggests that
Stillwater -Oak Park Heights, as a trade center, has gained a
larger share of Washington County's total retail trade, but
appears to be leveling off at this time.
27
Table 5
Total Retail Sales Canparison
Stillwater/Oak Park Heights and Washington County
1980-1986
Percent
1980 1982 1984 1986 Chan
City of Sillwater
& Oak Park Hts. $ 80,226 $128,450 $150,328 $166,450 +107.5
Washington County 271,408 377,692 436,319 500,758 + 84.5
Stillwater/OPH
as % of County 29.6 34.0 34.5 33.2 -----
Source: Minnesota Department of Revenue, Years Noted.
The performance of individual Major Retail Categories is
presented in Table 6. As shown Miscellaneous Retail
experienced the greatest gain in sales over the time period
1982-1986 with a 157 percent increase. This, of course, is
largely reflective of the increase in non -local purchases
noted earlier in this report.
The second largest increase (+130 percent) was realized by
Lumber, Hardware, etc. stores followed by furnature stores
with an increase of 51 percent. Please note the can-
paratively poor performance of Eating and Drinking
Establishments over the same time period.
28
Table 6
Retail Sales Data For City of
Stillwater and Oak Park Heights
By Major Retail Category, 1982-1986
(000's)
Retail Category 1982 1983 1984 1985 1986
Lumber, Hardware, etc. $ 7,200 $ 9,144 $ 12,147 $ 14,191 $ 16,526
General Merchandise
8,144
9,658
11,011
10,729
----
Food Stores
50,874
52,513
53,550
58,794
59,871
Auto Dealers, Stations
27,459
28,081
35,387
32,611
32,590
Apparal Stores
3,722
4,923
4,783
4,524
4,339
Furniture Stores
1,495
1,785
2,270
2,419
3,056
Eating, Drinking Est.
16,709
17,984
15,382
17,053
17,103
Miscellaneous Retail
12,848
14,571
15,797
17,170
32,965
Total Retail Sales
$128,450
$138,660
$150,328
$157,992
$166,450
Source: Minnesota Department of
Revenue,
Years Noted.
Percent
Change
+130%
+ 2
+157
+108%
29
Neither the Census of Retail Trade nor the Minnesota
Department of Revenue report retail statistics for separate
shopping districts (e.g., downtown area) in small communities
such as Stillwater. In fact, little in terms of hard data is
available to analyze trends in downtown Stillwater. Sane
estimates about the changes in economic mix were determined
using City directories. This analysis identified an increase
in retail establishments, including conversions of warehouse
or residential uses to retail space.
In summary, retailing in downtown Stillwater has undergone a
major transformation since 1970. Information on the volume
of retail sales downtown is not available, but the number and
type of stores has changed significantly. The downtown has
lost some of its larger stores, but the space they occupied
has been filled in with smaller stores. The phenomenon is
not unique to Stillwater. The conversion of large vacant
retail space to "mini -malls" or specialty centers is
occurring in many established shopping districts throughout
the country. There has also been a conversion of a signifi-
cant amount of non -retail space to retailing.
Miscellaneous retail stores accounted for almost all of the
net increase in retail establishments and experienced the
largest increase in sales over the past five years. There
was a significant growth in the number of eating and drinking
places and apparel and accessory stores but a comparatively
small increase in sales. The growth in these activities,
combined with declines in most other activities has changed
the face of downtown Stillwater. Downtown Stillwater is
clearly serving two overlapping markets: a local market and
a visitor or tourist market which is highly seasonal. This
trend has coincided with a tranendous increase in retail
activity along the Highway 36 corridor.
30
Downtown Stillwater is a diversified economic center, not
just a retail trade district. There is a wide variety of
non -retail establishments in the downtown covering a broad
range of economic activities. The number of non -retail
establishments increased between 1970 and 1985, but the
increase was considerably smaller than that exhibited by
retail establishments.
The downtown area remains strong in activities which comple-
ment retailing (e.g., services and finance, insurance and
real estate). Trends in the number of non -retail establish-
ments show a movement to a more "consumer -oriented" downtown
(fewer wholesale, transportation/utility activities). This
suggests an improved land use pattern downtown, as well.
However, there has been an increase in the number of manufac-
turing activities downtown. This helps to keep the down-
town's daytime population up and aids retailers, but may also
cause problems in terms of increased truck traffic, noise,
and parking problems which may detract from the CBD's
shopping atmosphere.
31
SURVEY SUMMARY
In an attempt to gather primary information regarding attitu-
des of residents, visitors, and workers concerning
Stillwater's CBD, several surveys were floated. A summary of
the results of these surveys will be presented here.
Resident Survey Summary
Methodology:
The resident survey was an intercept survey carried out in
the downtown during the Lumberjack Days festival. When
people arrived at the entrance to the festival they were
asked whether they were Stillwater residents or not. If they
were a resident of Stillwater they were asked to complete the
resident survey. Because of this arrangement for collecting
the survey information, the survey instrument was made rela-
tively short, only the front and back of one page.
The response rate was according to the interviewers very
good. However, no accurate count of the response rate was
determined. A total of 169 resident surveys were completed.
A quick analysis of the age distribution of Stillwater resi-
dents and those responding to this survey suggested that the
young were somewhat over represented.
32
Summary:
Of the residents surveyed, over 50 percent lived in the City
of Stillwater over 11 years. About 43 percent of the resi-
dents surveyed were between the age of 16 and 35.
The residents felt that Stillwater's most important downtown
asset was its friendly people. The second most popular
response selected as an important asset was the CBD's
"natural environment". Only 22 percent of those surveyed
said they felt Stillwater's shopping facilities were one of
its strongest assets.
Most of those surveyed (73 percent) suggested that they visit
Stillwater for its restaurants and drinking establishments.
To visit the library, churches, or schools was the second
most popular reason for visiting Stillwater. Only 5 percent
of those surveyed suggested they don't go downtown.
Most residents (76.3 percent) surveyed used autcanobiles as
transportation to the downtown. About two-thirds could park
their automobile within one block of their destination.
Monday through Friday during the hours of 9 a.m. to 5 p.m.
was the most popular time for the residents surveyed to visit
the CBD.
Overwhelmingly, heavy traffic congestion and parking problems
are seen as the two most critical issues facing Stillwater's
CBD. Similarly, improvements that most Stillwater residents
feel are needed are also related to traffic and parking.
The issues that residents felt were extremely important to
the CBD's future were to preserve Stillwater's historic
buildings and parking improvements. The least important
issue to the CBD's future of those listed was the expansion
of the Stillwater Yacht Club.
33
An analysis of age and time and day of visit suggested that
younger residents visit Stillwater weekdays and weekends
during the evening while middle-aged residents tend to visit
during the morning on weekdays.
Younger residents of Stillwater tended to consider
recreational assets of the CBD important while those aged 36
through 45 saw Stillwaters shopping facilities as assets.
Older Stillwater residents suggested that good city services
were an important asset.
Visitor Surve SummaJaE
Methodology:
The visitor survey was first administered at Stillwater's
Lumberjack Days event. The response at this event included
49 surveys. However, these results were considered to be too
biased as most of the young visitors were more interested in
a party atmosphere than seriously identifying their percep-
tions of Stillwater's downtown. Therefore, these survey
results was not used in this analysis.
A different visitor survey strategy was therefore, developed.
A visitor sidewalk intercept survey replaced the visitor sur-
vey that had been started at Lumberjack Days. Visitors were
surveyed between the hours of 10 a.m, and 3 p.m. on two week
days and one Saturday during the same hours. This sidewalk
intercept survey was administered at the South end of
Stillwater's CBD because it was believed that any shopper
visiting Stillwater would pass through the South end.
The response rate according to the interviewers was very good
with close to a 100 percent response rate of those asked to
answer the questions. Overall 202 visitors surveys were
completed.
34
Summary:
The main characteristics of shoppers visiting Stillwater will
now be summarized. Most of those visiting Stillwater are
repeat visitors. They visit primarily for shopping,
recreation and dining. Recreation includes sightseeing which
was the most often mentioned form of recreation sited by
visitors. Very few visitors to Stillwater were there for
business.
Most of those visiting Stillwater came by car and only about
12 percent intended on staying overnight. The number staying
overnight could possibly be increased by providing more
accommodations. The three bed & breakfast establishments in
Stillwater provide only 15 roams which are consistently
filled on the weekends. About 30 percent of those surveyed
plan to spend between $10.00 and $24.00 on this trip.
The most important characteristic of the City to Stillwater
visitors are the historic atmosphere, availability of
restaurants, and the presence of the St. Croix River. Of
little importance to the Stillwater visitors surveyed was
drinking, dancing, or special events.
The majority (68 percent) of these visiting Stillwater are
coming from the Twin Cities metropolitan area. Stillwater is
most likely not drawing as many visitors as it could frcm the
adjacent western Wisconsin market.
The visitors to Stillwater surveyed were typically young,
female, with annual incanes of between $20 - 34,000. These
visitors suggested there would visit Stillwater more often if
parking was more convenient and cheaper, and if more special
events and waterfront activities were held.
35
The two activities most often done in canbination by visitors
to Stillwater were to shop and visit restaurants.
Lack of overnight accaYmodations was seen as a detriment
toward staying overnight in Stillwater by those surveyed who
were there primarily for shopping and recreation.
Those spending the most dollars in Stillwater were there
principally for shopping. Also, those staying overnight were
the majority of those spending over $100.00 on their trip to
Stillwater. The presence of the St. Croix River was most
important to those who planned on staying overnight in
Stillwater.
Important to most visitors of Stillwater, regardless of ori-
gin, was the restaurants, the historic atmosphere of the
downtown, the St. Croix River, and shopping for gifts and
crafts etc. Also, regardless of origin, the visitors came
primarily for shopping and recreation. When analyzed by
gender, the females came primarily for shopping while the
males came primarily for recreation.
Downtown Worker Survey Summary
Methodology:
The downtown worker survey was distributed to about 150 per-
sons who were Employed in Stillwater's CBD. The businesses
to be surveyed were selected by the Stillwater Planning
Department. An attempt was make by the staff to select a
cross-section of the businesses in the CBD. For example,
retail, service, and manufacturing businesses were all repre-
sented. The response rate was about 64 percent. Of the 150
surveys distributed, 96 were returned canpleted.
36
Summary:
Stillwater downtown workers primarily drive their own autano-
biles to work and parking those vehicles is perceived as a
problem by downtown workers. About one half of those sur-
veyed have an employer provided parking space. The others
either use metered lot or street parking or park on unmetered
residential streets or in unmetered lots primarily near the
river.
Downtown workers rate the attractiveness of the downtown and
the quality of the CBD's restaurants as excellent. Seventy-
six percent of those surveyed rated the traffic flow in the
CBD as poor. Traffic flow was the only characteristic for
which no respondents rated the characteristic excellent.
Downtown workers identified a definite need for a shoe store,
a childrens clothing store, and a men's clothing store in the
CBD. Numerous others were identified as a possible need.
Downtown workers (75.8 percent) suggest that the City of
Stillwater definitely does not need another antique store.
About 22 percent of the downtown workers surveyed suggested
that they visit the CBD once per week that is not work
related. Workers seldan shop or frequent restaurants during
their breaks but about 34 percent of those surveyed do shop
and visit restaurants during their lunch break one day per
week. Almost one half of those surveyed never window
shop/browse and another 34 percent never eat lunch at a
restaurant.
About 68 percent of those employed in the CBD are female and
those married versus single account for about 60 percent of
those surveyed. Those respondents aged 35 through 49 made up
the largest age cohort of CBD employees and accounted for
about 40 percent of those responding to the survey.
37
About one half of those employed in the CBD also reside in
the City of Stillwater while another 25.3 percent live
elsewhere in Washington County. About 90 percent of these .
responding to this survey are in Stillwater primarily Monday
through Friday.
About 27 percent of those surveyed held professional/technical
positions while another 19 percent held secretarial jobs.
About one half of these surveyed reported their income to be
between $20,000 and $50,000.
38
SUMMARY OF OTHER PRIMARY RESEARCH
Focus Groups
In order to gain in-depth information on downtown develop-
ment, focus groups were used in this study. A focus group is
a marketing research tool which brings together a small group
of people who share some type of commonalty for the purpose
of obtaining their opinions on such topics as new products,
advertising, or in this case, downtown development. A
moderator leads the group discussion by asking predetermined
questions of the group members. Each individual is asked to
respond to the question with his/her own opinion. Discussion
is videotaped and/or audiotaped to allow the researchers the
opportunity to analyze the material at a later date.
To further identify and explore development opportunities for
downtown Stillwater, three separate focus groups were formed
of individuals knowledgeable of and active in the downtown
area. For the sake of convenience, the three focus were
called the Retailers, the Property Owners, and the Decision
Makers. The composition was as follows:
Retailers - 10 members
Property Owners - 8 members
Decision Makers - 9 members
Each of the three groups met once for approximately one and
one half hours. Questions asked of the group related to
three key issues: A discussion of the current situation,
roadblocks hindering the attraction of people/businesses to
the downtown, and future opportunities for downtown
Stillwater.
39
Perceptions of Downtown Stillwater:
All three focus groups felt that downtown Stillwater is uni-
que. It is a "real" town, a town where people work and shop
and not a "museum place" like RiverPlace or Bandana Square.
Because it is a "real town" it has its problems notably the
lack of adequate parking, the problems associated with traf-
fic congestion caused by the bridge, the lack of consistent
retail business hours and the problems related to garbage.
But as one retailer put it, downtown Stillwater is a 117" on
the way to a "9". As the birthplace of the State of
Minnesota, it is a historic community that has old fashioned
charm.
This charm is reflected in the downtown's architecture and
its lift bridge. Although historic preservation of the
buildings in downtown Stillwater is often viewed by downtown
business people as "a dirty word" and an infringement on
their rights to run their business as they see fit, the pre-
servation of Downtown buildings and the bridge is viewed by
many focus group members as an important part of downtown
Stillwater's marketing mix. As brought up by the Decision
Maker group, the historic aspect of Stillwater gives the area
a theme; it provides a competitive advantage for the down-
town.
But downtown Stillwater is changing. According to focus
group members, the downtown is changing from a place where
residents went to buy their day-to-day goods and services to
a location that pulls from the 2.3 million people within the
ten -county area that surrounds Stillwater. This change has
resulted in sane confusion for Stillwater residents and busi-
ness people.
40
Stillwater residents, according to the focus groups, often
feel like their town has been taken over by tourists,
regional shoppers, and other non -locals. Downtown business,
owners wonder how they can meet the needs of their local and
non -local target markets. They realize that in order for
their businesses to be successful, they need to cater to both
groups. Downtown Stillwater businesses need the patronage of
the locals, especially in the fall and winter when "tourism"
has dropped off. "Tourists" and non -locals provide a large
source of revenue for Stillwater businesses in the summer
months.
The traffic congestion generated by the tourist group tends
to discourage locals fran frequenting the downtown and many
have developed the habit of going sanewhere other than the
downtown to shop. This trend to shop in areas other than
downtown has been encouraged by sane Stillwater business that
are located above as well as below the hill. For this
reason, many Stillwater residents no longer have a need to
cane in to the downtown. The Retailer and Decision Maker
focus groups, however, feel that given the choice, many local
residents would like to shop in the downtown area if they
could do so conveniently.
Who Shops in Downtown Stillwater?:
The Retailers were asked to indicate where their custaners
were from. There was a wide variation of response which
could be related to variety of retail businesses represented
at the group meeting. For example, one Retailer said her
market is 99 percent local, while another said hers is 90
percent tourist. Most of their markets are sanewhere in bet-
ween these two extremes, but many indicated that large por-
tions of their markets are outside of the immediate
Stillwater area.
41
There is apparently considerable seasonal variation in the
composition of markets. Several Retailers indicated that the
volume of business in downtown drops during the winter
(off-season) months and the percentage of business from
strictly local areas increases significantly. These
Retailers suggested that there are quite a few businesses
that "can't make it through the winter without local
custaners."
There is also apparently some variation in markets by a key
demographic characteristic: age. Some of the Retailers said
that the older market was more loyal, while the younger
market tends to do more camparison shopping. However, based
on the composition of the Retailer group, it is impossible to
draw any statistically reliable conclusion form the comments
about custaners and market canposition.
There was a general concern among the Decision Makers
regarding downtown Stillwater's trend toward becaning a
tourist attraction. There were concerns expressed about
keeping it "a real town" among members of this group.
Property Owners, on the other hand, seemed to have a consen-
sus that there should be more effort to "capitalize on
regional shoppers" and that downtown is a "regional shopping
area." However, Property Owners apparently feel a need to
limit these efforts: one member of this group "would hate to
see it become a tourist town." Another said that downtown
Stillwater should not become a museum place like RiverPlace
or Bandana Square" because "people go there once, its very
lovely, but don't go there to shop again and again."
There was consensus among all three groups regarding what
attracts people to downtown Stillwater. It's because of "the
river," the "historic" and "quaint atmosphere," the "unique
flavor," and because its a "real town."
42
Physical Condition:
Retailers were the most vocal regarding the need to "clean
up" the downtown area. It could be "cleaner," it could use
score improvements in terms of the "Shrubs, flowers, and trash
cans." A similar comment was that the "cleaning needs to be
more intense". Retailers generally agreed that the downtown
could look a lot better with relatively minimal effort and
expense.
Garbage-managment was raised as an issue. Specifically,
suggestions regarding the shielding of garbage cans, espe-
cially around restaurants, were expressed. Problems with
insects and rodents, with things dropping out of garbage
cans, especially around restaurants, were expressed. The
fact that shoppers have to "walk among the cans" was noted.
The railroad track area was said to be a "mess," and a "real
no-man's land" in terms of debris and the need for cleaning.
The other two groups did not raise this issue.
Development Opportunities:
As mentioned previously, all three focus groups feel
Stillwater is in a transition. The question facing downtown
Stillwater is what is the proper type of business and acti-
vity that Stillwater can support. Retailers and Decision
Makers agree that the downtown needs a diverse base of
retail, light industry, office space, and housing in order to
thrive. The Decision Maker group suggested that the downtown
be "zoned" as follows:
43
Retail space - limited to Main Street
office space - limited to Second Street and second
floor space above existing retailers on
Main Street
Parking - situated to the north, south and west
ends of the downtown
Housing - situated to the north of the downtown
The group gave no indication as to where light industry
should be specifically situated. Retail, light industry,
office space, and housing development opportunities will be
discussed in further detail.
Downtown Retail opportunity:
No agreement between the groups could be reached as to what
specific types of retail businesses should be sought for the
downtown area. The groups did agree, however, that these new
stores should be "year around" stores that sell basic items
that would appeal to local residents instead of "trinket"
stores that appeal mainly to non -local shoppers. Store types
mentioned in group discussions were as follows:
1) Dime store (variety store) like a Ben Franklin
2) Shoe store (all kinds)
3 ) Non-gifty store
4) Destination stores like Estelle's (this is a
wanan's clothing store that draws out-of-town shop-
pers into the Stillwater area)
5) Clothing stores like The Outfitter.
In general, focus group members would like to have greater
store selection in the downtown. They also feel that any new
businesses should canpliment existing retail businesses. All
three groups feel that downtown Stillwater had an adequate
assortment of restaurants so expansion in this area is not
considered necessary.
44
In addition to the type of retail businesses desired in the
downtown, Decision Makers were concerned that the right type
of retail business person be sought to run new downtown busi-
nesses. They outlined a number of characteristics they felt
they would like to see in a new downtown retailer in order to
ensure the success of a new business in the downtown. These
characteristics are as follows:
1) The retailer should be aggressive and able to adapt
to the market he/she is in.
2) He/she should be aggressive in his/her approach by
finding his/her clientele.
3) He/she should be able to financially weather the
start-up and opening months of operation. (The group
feels that sane movie businesses may not have the
financial resources necessary to enable then to
stay in business during its inital start-up)
4) He/she should have a proven track record in regard
to running that particular type of business.
Retailers and Decision Makers have mentioned a number of
problems downtown Stillwater faces in attracting new busi-
nesses into the area. These problems are as follows:
1) Rents for downtown businesses are high. A business
20' by 40' may pay as much as $1500 per month in rent.
2) A lack of convenient parking.
3) Traffic congestion due to the draw bridge discoura-
ges downtown shoppers.
4) Existing buildings are too small to give chain
stores the square footage they desire.
5) Poor basement storage facilities where spaces are
small and wet.
45
Light Industry:
Although many downtown business owners originally seemed to
question the wisdom of allowing a light manufacturing firm
into the downtown, they now seem convinced of the necessity
to develop this type of venture in the area. Decision Makers
and Retailers felt such businesses are important for sup-
porting downtown retail trade. They felt once these types of
businesses were established in the area, it would be easier
to recruit new retailers to the downtown. According to
Decision Makers, the ideal type of light industry for down-
town Stillwater would be one that is clean (no pollution),
does not have a lot of daily customers (would not add to
parking problem), and does not require many trucking services
(would not add to traffic congestion). To attract these
types of industries, the focus groups felt that reasonably
priced space should be made available. The decision maker
group thinks that downtown Stillwater could make this low
cost space available by encouraging the development of a
starter or business incubator building. This building would
be divided into many smaller bays and it would allow small
businesses to share same operating expenses.
Office Buildings:
According to the Decision Makers focus group, many downtown
businesses have moved out of the downtown due to lack of ade-
quate office space. To support this fact, focus group mem-
bers listed the names of several insurance agencies, doctors
and law firms that have recently moved out of the downtown.
The Decision Maker group felt that these business people
would have preferred to stay downtown if there was adequate
space and parking. The group felt that efforts should be
made to encourage these business people to stay downtown as
46
the business generated by than and their customers helps sup-
port downtown retail trade. To meet the needs of these busi-
ness people, reasonably priced office space should be
developed in the area. The group felt that new or renovated
buildings in the area should be designed as multi tenant
buildings to accommodate several different businesses. These
buildings should be designed in such a way to allow for
future expansion needs.
Housing:
All groups agreed on the importance of developing housing in
the downtown area. The most feasible site for the develop-
ment of housing was the old prison site. The groups felt
that rental units as well as condominiums would work well in
downtown Stillwater if adequate parking was available.
Transportation Issues:
Three issues that were discussed extensively in all three
groups were traffic congestion, the bridge, and parking.
* Parking
Most members in all three groups felt that parking is a
serious problem in downtown Stillwater. However, a
local minority expressed feelings that parking is not as
big of a problem as most people make it out to be. This
group feels that parking is more of a perceived problem
than a .real problem. In fact, one member of the pro-
perty owners group felt that the parking situation in
downtown was actually an "asset" because "people want to
be where other people are", that a sense of attraction
results from the short supply of parking spaces.
47
While there was general agreement that parking is a
problem, there was not a daninant solution put forth to
solve the problem. The need for a ramp(s) was mentioned
in each group, but the best location for the ramp(s)
could not be pinpointed. The two principal con-
centrations of activity, at the north and south ends of
downtown generate the most traffic and therefore, need
increased parking support the most.
As part of the discussion regarding the north end, it
was apparent that the parking situation there can be
dealt with more effectively and at lower cost than for
the the other end of downtown. This is because the
north end is just emerging, actually going through rede-
velopment, and the land required for parking will be
easier to acquire. However, concerns were expressed
that actions must be taken soon on the north end to make
sure that adequate parking is integrated with other land
uses as the area develops. The Property Owners empha-
sized the importance of having the private sector and
the City work together to address the parking issue.
Specifically, parking could and should be integrated
with all major new developments. The Decision Makers
suggested the parking of cars on the first levels of
buildings. They also expressed concern about the
expected high cost of building ramps in Downtown due to
soils and water table characteristics. The developer
should put the package together and negotiate with the
City for support of the project, which may include
financial support for parking.
48
* Bridge
The need for a new bridge across the St. Croix River was
generally acknowledged in all three groups. However, a
couple of participants felt that a new bridge would not
be needed if the number of trucks passing through the
City could be reduced. They felt that many trucks were
using the Stillwater crossing to avoid the weigh station
on the interstate highway.
There was general consensus in all three groups that a
south corridor for a new bridge is the most desirable
alternative. Ewen among the Retailers, a group that
would lose visibility and perhaps accessibility if the
new bridge corridor is taken out of the downtown, there
was consensus that a new bridge is needed and that the
south corridor would be best for downtown Stillwater.
As pointed out in the Decision Makers group, this may be
because the most successful businesses in downtown are
generally destinations. People are willing to make the
effort to reach then. However, the Retailers exhibited
the greatest support for keeping the existing bridge in
place. This would provide for local access to the down-
town from Wisconsin (a major portion of many retailers'
markets). Perhaps more importantly, it would help to
preserve the City's historic image. The existing bridge
is a well-known symbol which is used extensively on
logos and in promotional efforts. The major questions
regarding keeping the existing bridge relate to
ownership and liability. The Retailers Feel that the
State and Federal governments should assume/retain
ownership and operation, while the Decision Makers and
Property Owners suggested that the existing bridge be
"privatized" and operated as a toll bridge. It was
49
pointed out in the Decision Makers group that in similar
situations, where a new bridge has been constructed, the
existing bridge has been offered to the City, but the
local governments have not been able to afford the
upkeep. It was suggested by the Decision Makers that
the bridge issue should be approached as a historic pre-
servation issue.
North End:
The north end is "a mess right now", according to one member
of the Decision Makers group. However, all three groups
agreed that the north end offers significant potential for
redevelopment opportunities. It's almost a blank slate in
terms of a wide variety of uses", according to another member
of the Decision Makers.
While important things are happening on the north end (e.g.,
the Minnesota Zephyr and antique shop development), a member
of the Decision Makers group described the north end as "kind
of a bland." The Property Owners viewed the situation a
little differently and described this area by saying that
"the downtown peters out in the middle". This implies that
the focus of planning should be on the area between the north
and south ends as much or more as on the north end itself.
The general flow of the discussion in the Property Owners
group is that things will continue to happen on the north
end. Attention must be given to "coordinating" development
in the north end, but attention must also be given to
"connecting" and integrating the already successful develop-
ment on the south end and the emerging development on the
north end.
50
There were numerous types of development opportunities iden-
tified in all three groups. Parking to serve the north end
itself, as well as other parts of the downtown was suggested
in all three groups. However, each of the groups also
suggested lodging (especially an "upscale" and "quality"
hotel/motel), housing, retail, and office development for the
north end specifically, housing near the old prison site was
suggested in the Decision Makers groups.
The Mapel Island Dairy, a major property in the north end,
was also the subject of discussion in each of the groups.
There were mixed emotions about the presence of the dairy in
downtown Stillwater. Each of the groups expressed support
for the dairy as an important employer in the community.
There was same minor disagreement among members of the
Retailer group regarding the economic impact of the dairy on
the downtown itself. While one member felt that the dairy
doesn't help downtown businesses, another felt that the
people who work there "make businesses work in the winter
time".
The dairy itself was represented in the Property Owners group
and it was the subject of extensive discussion during that
session in particular. The discussion in that group started
out with an admission that the dairy doesn't "really belong"
in downtown Stillwater anymore. The downtown and its func-
tions have changed. But even more significantly it was
pointed out that the Maple Island Dairy, as a business, has
changed, too. In essence, the dairy is not happy with the
Minnesota and the local business climate. The firm is not
tied to local milk supplies as it once was, it is concerned
about the cost of doing business locally (high labor costs,
sewer costs, pour logistics) and its opportunities for pro-
duct expansion are limited due to smell, pollution, etc.
51
It was very openly announced in the Property Owners group
that the dairy will be willing to sell its north end proper-
ties "for the right price," probably in "about 2 years".
However, it was emphatically stated that the dairy property
and the prison site owned by the dairy are "a package deal."
City Involvement:
The issue of city involvement in north end development, in
general, and in dealing with the Maple Island Dairy, was
brought up in all of the groups. The Decision Makers felt
that the City should make in effort to keep the dairy in the
community. The Property Owners, heavily influenced by the
dairy representative, seemed to feel it would be useless for
the City to even try to keep the dairy in town. The
Retailers, again heavily influenced by the thinking of one
individual, felt that the "government shouldn't help the pri-
vate sector," that "the taxpayers are getting tired of this,"
and generally speaking, the "less involvement the better".
However, the Retailers did feel that "the City could facili-
tate change, make things consistent", not only regarding the
dairy, but downtown development in general. An opportunity
that must be given serious consideration is to try to keep
the administrative facilities in Stillwater and let the pro-
duction facilities move elsewhere.
All three groups agreed that the City should be more actively
involved in downtown development, including marketing the
City. There was also general agreement that the City is not
and has not been doing what it should be doing regarding
planning in the downtown area. Terms like "reactionary plan-
ning" and "City takes an after the fact role in planning",
"things are now pretty much hit or miss", were used to
described the City downtown planning activities. However,
the Property Owners and the Decision Makers feel that the
City is improving its attitude toward downtown and according
to the Property Owners the City Council is becoming more
aggressive as it initiated the downtown plan.
52
Conclusion:
In conclusion those involved in the focus group session
suggested that Stillwater's problems stem from the fact that
the City is a "real town". These community members have seen
the CBD change from a local orientation to a regional orien-
tation.
Considerable seasonal variation in the composition of indivi-
dual business markets was suggested by focus group par-
ticipants. Sane participants expressed concern over the City
becoming too tourist oriented while others felt the tran-
sition was inevitable and expressed interest in capitalizing
on the regional market. This dicotomy has been prevalent
throughout the entire planning process. Focus group members
suggested that more selection in the types of stores found in
the downtown is needed.
The traffic problems in the CBD identified and discussed by
the participants of the focus groups included parking traffic
congestion, and the bridge. Ways to solve the traffic
problems were not agreed upon. However, the participants
suggested the urgency of incorporating parking and traffic
control into any significant development on the north end.
Suggestions by focus group participants as to possible deve-
lopment opportunities on the north end included a quality
hotel, retail, office, and housing.
53
Office_Space Demand
Introduction:
To ascertain if additional office space is in fact needed
downtown, interviews with realtors, owner/managers of office
space, and businesses occupying space in Stillwater's central
Business District were conducted during September and
October, 1987. These interviews were meant to supplement the
information gathered through the focus group sessions
regarding the need for office space in the CBD.
Survey Results:
Presently, office space downtown is scarce. Most of the
seemingly prime office space has been preempted by retail
use. That is, first floor, street level, space downtown has
been converted to retail with offices and apartments on upper
levels. Indeed, the number of retail establishments down-
town, has increased 43 percent over the past seven years from
a total of 77 in 1980 to 110 currently.
Realty World, a local real estate firm, is presently in the
process of moving fran their downtown location to new offices
located near State Highway 36. Their move will free -up
approximately 4,500 sq. ft. of additional office space down-
town. Approximately 1,500 sq. ft. of the building is at
street level and could be used for retail or office purposes;
the remaining 3,000 sq. ft. is on the second floor and is
presently occupied by the real estate firm. There has,
however, been little interest in this space to date,
according to Realty World representatives.
54
There is vacant office space available downtown if the
Connelly and Stapples Mill buildings are included. However,
neither of those buildings has been used as retail or office
space in the past and thus would require major renovation for
any other use than light manufacturing and/or
warehouse/storage space. The Grand Garage currently has a
4,000 sq. ft. of space available for office use.
There is considerable competition for office tenants with
several new office buildings either built or under construc-
tion in the Stillwater area. The new buildings range in size
fram 3,000 to 12,000 sq. ft. and are located outside of
the Central Business district, either near the St. Croix
shopping mall or in the City industrial office park.
Developers of these properties have experienced little dif-
ficulty in finding tenants.
None of those interviewed see a need for additional office
space downtown now, or in the foreseeable future. While
parking and traffic congestion are often cited as factors
limiting the potential of downtown for office development,
elimination of these problems is not likely to increase
demand that significantly. Same local decision makers
suggested that a latent demand exists for high quality office
space at*a reasonable price. office development is recamlen-
ded as a development opportunity downtown only if parking,
quality, and price constraints are overcame.
Housing_Denand
Introduction:
Based on interviews with apartment complex managers in the
City of Stillwater, a moderate to strong demand for housing
exists in the area. Market rate apartment complexes
(Rivertown Apartments for example) do not formally compile a
waiting list, but suggest they never have trouble filling
vacancies. This particular complex has 21 units in two
buildings with rents at about $450 per month.
55
There also appears to be a strong demand for elderly housing
in the City of Stillwater. A demand exists especially for
low to moderately priced units. According to a manager at
the Rivertown Cannons (a subsidized senior citizen housing
facility) they have a total of 95 housing units, all of which
are full. Also they have a waiting list of 37 persons for
1-bedroan units, 5 persons waiting for 2-bedroam units, and 1
person waiting for a handicapped accessible unit. She
suggested that same new senior housing such as "The Cottages",
while filling a particular need, was often too expensive a
housing alternative for many of Stillwater's elderly resi-
dents.
Stillwater's population has increased fran 12,290 in 1980 to
13,116 in 1986 or an increase of 6.7 percent. Along with
this population increase, the household size in Stillwater
has decreased fran 2.95 persons per household in 1980 to 2.83
persons per household in 1986 or a decline of 4 percent. The
forces of these two factors and the projected future growth
of the area all combine to create a significant demand for
housing geared toward all inane levels that are found in the
community. In 1980, Stillwater had a total of 4,065 house-
holds and they are projected to have 4,800 households (+18
percent) by the year 2000.
Certainly, the CBD would be an ideal location for senior
citizen or other types of housing. Residential units would
be enhanced by the natural amenities of the area and because
of the availability of groceries at Hooley's store along with
access to of a wide variety of other necessities and services
(i.e. pharmacy, meat market, bakery, senior drop in center,
restaurants, etc). The location of a senior housing complex
or other housing in the CBD would provide an influx of shop-
pers to increase the sales of local merchants while also
helping increase the activity level in the CBD on a regular
basis.
56
The CBD could also support sane higher quality housing units,
perhaps condominiums. Other communities along the St. Croix
River have allowed for the development of condominiums along
the river. And while we would not promote intense develop-
ment along the entire length of the river, certainly scat-
tered development interspersed with more passive uses is
desirable.
Survey of Similar Communities
Introduction:
JMA/Applied Research Group conducted an exploratory survey of
communities similar to Stillwater during July and August
1987. The purpose of the windshield survey was to note uni-
que and innovative developments and activities in the similar
communities that maybe well -suited for a downtown Stillwater
location. Developments and activities that would compliment
existing business in Stillwater and not detract from the
CBD's image.
Comparison Communities:
Camaunities located in the states of Minnesota, Illinois and
Wisconsin were chosen to be surveyed based on the following
factors:
1) A population size roughly equivalent to Stillwater;
2) A determined and ambitions effort to improve their
Central Business Districts;
3) A location on or near a body of water;
4) A location relatively close to a large urban center
much the same as Stillwater is situated with respect
to Minneapolis/St. Paul, and;
5) The presence of a rather sizable tourist industry.
57
The carmunities selected for this survey exhibit most, if not
all of the above characteristics.
Table 7 presents the list of 11 carmunities.
Table 7
Carmunities Selected for Exploratory Survey
1985
1984
General
Carmunity
Population
AGIPC
Characteristics
Algona, WI
3,691
$ 7,552
Lake Michigan, Tourism
Cedarburg, WI
5,216
$13,800
Revitalized CBD Tourism
Galena, IL
3,930
$ 9,428
Rivertown, Historic CBD
Hartford, WI
3,221
$ 9,866
Revitalized CBD
Hastings, MN
13,430
$11,470
Rivertown, Revitalized CBD
Hudson, WI
5,576
$14,153
Rivertown, Tourism,
Revitalized CBD
Kewaunee, WI
2,869
$ 8,321
Lake Michigan, Tourism
Port Washington,
WI 8,836
$10,499
Lake Michigan, Tourism
Red Wing, MN
14,198
$ 8,920
Rivertown, Tourism
Sturgeon Bay, WI
9,118
$ 8,822
Revitalized CBD
West Bend, WI
21,993
$10,696
Rivertown, Revitalized CBD
Mean Value
8,371
$10,321
Maximum Value
21,993
$14,153
Minimum Value
2,869
$ 7,552
Stillwater, MN
12,970
$14,340
Rivertown, Tourism
As shown in Table 7, populations for the selected communities
range fran 2,869 (Kewaunee, WI) to 21,99(West Bend, WI).
Adjusted Gross Inane Per Capita (AGIPC) ranges fran a w of
$7,552 (Kewaunee, WI) to a high of $14,153 (Hudson, WI).
58
While Stillwater's population is about 3,500 above the com-
munity mean value, the City's AGIPC is higher than any of the
communities surveyed. The higher income, however, should not
diminish the value of studying the other caanunities for develop-
ment opportunities. Rather, it only suggests more dollars are
available locally to help finance and support new development,
particularly business that is oriented to the local market.
In addition to the communities presented in Table 7, an
exploratory survey of several small communities in northern
Door County, Wisconsin, was conducted. Communities such as
Ephraim, Sister Bay, Fish Creek and Egg Harbor, although much
smaller in size, share many of the same characteristics as
Stillwater. Namely, a heavy reliance on tourism, a
waterfront location ( Lake Michigan) and a strong scandanavian
ethnic influence. The results of this survey of communities
has contributed greatly to the identification of new oppor-
tunities for Stillwater's downtown.
Summary:
The unique character of each individual community we surveyed
will not be discussed in detail in this report. However, the
general conclusions or lessons we learned through the agglo-
meration of the developments noted in the communities will be
discussed.
One recurring theme that was noted was the emphasis many
tourist communities placed on their unique ethnicity. This
ethnic identification was clearly lacking in the Stillwater CBD.
Another general theme was the reliance of tourist related
downtowns on specialty retail trade shops. Those develop-
ments that were particularly unique and also lacking from the
Stillwater economy were identified and explored further. We
believe that the unique retail activities discovered in the
windshield survey of similar can -immunities provided a good
base of possible retail and associated activities that may
contribute to the Stillwater economy.
59
In conclusion, all of this information was brought to bear on
the list of potential development opportunities. The list
was then reduced to include only those opportunities that met
the minimum requirements we identified. These requirements
being:
* A similar successful development occurred in another
community.
* The industry showed growth potential, nationally as
well as regionally.
* The activity was canpatible and camplimentary of other
economic activity in the CBD.
* The activity would not threaten an existing retailer
in the CBD.
* The activity could be tied to both local and non -local
markets.
* The Stillwater economic development strategy did not
suggest the activity was at or near market saturation.
The following then are a list of the opportunities that meet
these requirements.
The approximate amount of square footage theses types of
developments typically require are included in parentheses next
to the name of the identified opportunity.
M
IN) DiN Di •• Z I ••0,11 Va.
Based on the results of the various surveys (Visitor,
Resident and Downtown Worker), the focus groups sessions, the
analysis of the Stillwater Trade Area and the survey of simi-
lar communities, a number of development opportunities have
been identified. The opportunities are at best only prospec-
tive at this time with further analysis necessary to ensure
their success. Therefore, we recommend feasibility studies
be conducted before any definite development decisions are
made. The strategy that we used to develop this final list
of development opportunities will now be defined.
The recent trend of the CBD economy was considered and the
extreme growth in miscellaneous retail suggested that more
opportunities exist in this area. Therefore, specialty
retail developments that were found in the survey of similar
communities that were not found in Stillwater provided the
majority of the pool of possible specialty retail develop-
ment that we considered. To suppliment this information an
on -site survey of Stillwater's CBD retail establishments was
conducted in an attempt to identify any obvious gaps in the
econany.' Finally, simply brainstorming about possible deve-
lopment opportunities aided in rounding out our initial list
of retail development opportunities.
The list of possible development opportunities was then
screened based on the information received fran the various
surveys, past reports, and the focus group information.
Industry trends were examined when possible to scrutinize any
opportunities that were part of a non -growth industry
nationally. Opportunities that were part of non -growth
industries nationally were eliminated fram the list of poten-
tial development opportunities.
61
Ethnic Theme
Although the general concensus is that there are already too
many eating and drinking places in downtown Stillwater, none
of the existing restaurants take advantage of the City's
strong ethnic background.
,According to 1980 census data, approximately 16 percent of
Stillwater's 12,000 residents are of pure German stock.
Scandinavian is the second most prevalent ethnic group with 8
percent of the City's population reporting either a Norwegian
or Swedish ancestry. Stillwater, of course, is only a
reflection of the Twin Cities Area where German and
Scandinavian ethnic groups also prevail.
It seems only natural that Stillwater should cultivate this
rich heritage, not only by serving ethnic food, but also by
featuring more ethnic wares in the numerous gift and spe-
cialty shops downtown.
Eating and drinking place sales have soared nationally, from
$44.6 billion in 1974 to over $124 billion in 1984, an
average annual increase of about 16 percent. Likewise,
Washington County has experienced significant growth in
sales, experiencing a 16 percent increase between 1982 and
1986. Bayport, a small community immediately to the South of
Stillwater, added one restaurant and increased sales by 93
percent from 1982 to 1986.
In contrast, the number of eating and drinking establishments
in Stillwater increased form 41 in 1982 to 54 in 1986, while
sales only rose by 2 percent. The City's Economic
Development Strategy also suggests that eating and drinking
places are at or near market saturation in Stillwater. While
this is somewhat discouraging news, the fact remains that
growth in this industry is occurring just about everywhere
else but Stillwater. Further research on why this is the
case maybe warranted to determine whether or not an ethnic
restaurant is at all possible.
62
Shoe Store (3,400 sq. ft.)
A shoe store was cited by the Focus Group participants and
Downtown Worker Survey as a business needed downtown.
Presently, there are several stores in Stillwater that sell
shoes as part of a full -line of clothing, a few of which are
located downtown. However, only two stores soley devote
themselves to the sale of footwear, both of which are located
outside the CBD.
Due to the higher incomes of Stillwater residents (noted
earlier in this report) and the affluency of the typical
Stillwater visitor, (See Downtown Worker Survey Analysis) a
more upscale shoe store maybe well -suited for a downtown
location. Such a store would feature a more high-grade pro-
duct (i.e. Italian leather) as well as a full -line of hand -
sewn leather boots and accessories.
The Stillwater Area Economic Development Strategy, completed
in June, 1986 indicates that shoe stores in Stillwater might
be at or near market saturation, caution, therefore, must be
observed in pursuing this opportunity. A feasibility study
is strongly reccnmended to ensure that the market for the
type of shoe store described above does exist.
Children's Specialty Shop (2,000 sq. ft.)
Although there are several stores in Stillwater that offer
children's clothing as part of a full -line of family clothing
and a store that specializes in children's wear near Cub
Foods on Highway 36, no store in the CBD sells only
children's clothing.
63
According to the Downtown Worker Survey, 40 percent of the
respondents believe a store that sells children's clothing is
definitely needed while another 33.7 percent indicated it may
be needed.
Several of the comparison communities, such as Port
Washington, Red Wing, Hartford, Sturgeon Bay, West Bend and
Cedarburg all have children's specialty stores located within
their Central Business Districts. The stores for the most
part carry a full -line of childrens clothing for all age
groups, including infantwear in sane cases. The prices range
from moderate to more expensive merchandise.
Theater/Cc munity Building (8,000 - 10,000 sq. ft)
A combination movie theater/playhouse and meeting facility
offers sane intriguing possibilities for downtown that would
appeal to visitors and residents alike.
In addition to showing recent or classic motion pictures at
the facility, live plays could be performed by Stillwater's
own theater company in residence. The Phipps Center for the
Arts located in Hudson is a classic example of the latter.
The Phipps Center has enjoyed amazing success despite being
located just a short distance from Minneapolis/St. Paul, a
virtual hot -bed for theater activity. The center not only
draws theater -goers fran the Twin Cities, but actors as well.
Stillwater too, can take advantage of this nearby market of
theater patrons and abundance of actors, plus create another
reason for tourists to stay a few days in the City of
Stillwater instead of just a one -day visit. The motion pic-
tures and the meeting facilities would supplement the theater
company revenue improving the financial viability of the
business.
64
Currently many foundations in Stillwater support the Phipps
Center. Similarly, many of the Phipps workers (i.e. ticket
takers, ushers, etc.) hail fran the Stillwater area. This
information suggests that the Stillwater area itself could
support a theater in the cammunity.
Health Food Store/Coffee, Tea Specialty Shop (1,400 sq. ft)
Stillwater presently has no store devoted exclusively to the
sale of health foods.
Given an increasingly more health conscious public, par-
ticularly among higher inane earners and more educated
individuals, a health food store seems ideal for downtown.
To supplement health food sales and improve the viability of
such an operation, a coffee/tea specialty shop might also be
included. Special herb teas might be featured along with
more unusual blends of imported coffee.
A shop of this type would be patronized by residents as well
as visitors.
Non -Alcohol Cooler
The popularity of wine coolers (mixtures of fruit juice or
soda and wine) has grown tremendously in the U.S. in recent
years with sales increasing by more than 60 percent. Four
firms, Gallo (Barttles and James), Brown Formarn, Canadiagua,
and Seagrams dominate the wine cooler market, accounting for
roughly 75 percent of all sales.
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While competition for the wine cooler market is rather
fierce, the non -alcohol cooler market has few participants,
most of which are smaller firms serving regional or area
markets. One such canpany is Door County Orchards Inc.
located in Sturgeon Bay, Wisconsin. Since the market segment
Door County serves is relatively small the bigger firms like
Gallo have shown little interest.
Door County Orchards produce Door County Cooler, a carbonated
fruit juice beverage that is marketed primarily in Eastern
Wisconsin and the Chicago Area. The product is closely asso-
ciated with the scenic tourist area of Door county, but also
takes advantage of the trend toward more health consious
foods. A majority of the apples and cherries used in produc-
tion are obtained locally fran their own orchard and others
nearby. Other fruit juices such as cranberry and rasberry
are received in concentrate form from fruit processors in
either Eagle River, Wisconsin or Lower Michigan.
Stillwater should research the possibility of manufacturing
its own brand of non -alcohol cooler. There is considerable
apple production nearby and the Minneapolis/St. Paul SMSA
would be a logical market initially, for the beverage.
Through effective marketing, a strong association of the
cooler with historic Stillwater and the beautiful St. Croix
River Valley could be established, much the same as Aamodt's
Apple Syrup enjoys now.
To be consistant with the City's present theme, "Rivertown
Cooler" might be an appropriate name for this product.
Floral Shop (1,000 sq. ft.)
Despite the fact that a floral shop recently closed in The
Grand Garage, a store of this type remains a prime prospect
for downtown.
Currently, there are four floral shops operating in
Stillwater, all of which are located outside the CBD. While
there is some doubt whether the local trade area can support
another florist an additional shop downtown would appeal
mostly to visitors complementing existing tourist -related
businesses. Typical of most flower shops the business would
offer fresh and silk flower arrangements, green and blooming
plants and other related gift items, but would be more
slanted toward non -local purchases.
The Downtown Workers Survey lends same support to this recom-
mendation with 24.2 percent of the respondents indicating a
floral shop is definitely needed downtown. Another 33.7 per-
cent thought it might be needed. Their support is more an
indication of local demand, of course, than non -local.
Certainly, some local support would be necessary to survive
the fall and winter months.
Eight out of the 11 comparison communities visited have
floral shops downtown.
Marina Store (6,000 sq. ft)
Based on the results of the resident survey, the least impor-
tant improvement to the CBD of those listed is the expansion
of the Stillwater Yacht Club. However, the recreational
boaters in the area do provide a somewhat captive market that
could be targeted in an attempt to increase sales in the CBD.
Retail sales in boating and related accessories increased
about 5-6 percent in 1986 due primarily to declines in
interest rates and fuel prices, along with steady but slow
growth in the economy overall. This 5-6 percent growth rate
is expected to continue through 1987 and beyond.
67
This growth in boating could be exploited at the local level
by expanding the accessories and services provided to boaters
who permanently dock in the City of Stillwater as well as
those boaters who temporarily dock in the City for shorter
terms.
Presently, the Stillwater Yacht Club has a limited "ships
store". This type of development could be expanded to
include not only boating hardware and accessories but also
nautical fashions and footware.
Such a retail establishment could serve not only the boating
public but also tourists and residents alike if items such as
"deck" shoes and other more upscale fashions and accessories
as well as more traditional boating fare (i.e. hardware,
rope, maps and charts, etc.) are featured.
Also additional temporary tie ups more centrally located
along the St. Croix River in the CBD should be encouraged to
provide convenient access by boaters to the unique shops and
restaurants located in the downtown.
As the existing Stillwater Yacht Club is located on the north
end of the City which is slated for development, an expanded
ships store would provide a unique retail and service base as
a part of that development.
In an attempt to increase activity on the north end and to
improve the likelihood of success of the marina store the
business should be expanded to provide various rental oppor-
tunities. For example, cross country skis and snow shoes
could be rented in winter months with bikes and perhaps
roller skates being rented in the summer. Various upscale
seasonal clothing for sports other than just boating could
add to the development of a well rounded and successful busi-
ness with the marina store as a foundation.
Laundromat (1,700 sq. ft)
A self-service coin -operated laundramat is needed downtown to
serve residents and boaters alike.
According to the City's Economic Development Strategy,
Stillwater has below average employment levels in Laundry
Cleaning and Garment Services when compared to communities of
similar size. This opportunity is further documented uti-
lizing the analytical technique known as Threshold Analysis.
Threshold analysis is a means of documenting the need
for additional laundromats, locally. Similar to the tech-
nique used in the Economic Development Strategy, threshold
analysis measures the minimual population needed to support a
specific number of establishments of a particular business
type. To determine the threshold a random sample of cities
in Wisconsin was conducted by the Small Business Feasibility
Center -University of Wisconsin. The survey revealed that
only 649 residents are needed to support one laundromat in a
community, with a population of 5,865 necessary to support two.
Since Stillwater's Trade Area population is estimated at
approximately 28,000, and the City currently has only one
self-service coin -operated laundromat a second business of
this type appears feasible.
A laundromat downtown would not only serve residents but
boaters from area marinas as well.
Hospitality Center and Local Coordinator (1,500 sq. ft)
As a first step at attempting to tie the newly developing
north end and highly developed south end of the City together
a hospitality center could be located at the north end of the
City, possibly at the territorial prison site.
.•
The purpose of the center and its director would be to promote
and coordinate day trips by groups. The facility would need
a large parking area to accommodate buses and at least one
shuttle bus to relay tourists to their destinations in town.
Stillwater has the unique advantage of providing many dif-
ferent destination attractions: the Zephyr; the riverboat;
the antiques district; the south end merchants; the Lowell
Inn; and a museum. We believe business could be significantly
increased if a Stillwater Hospitality Coordinator had the
responsibility of contacting those travel agencies that have
day tours (and those that have extended coach tours, who
might stop in Stillwater to eat at the Lowell Inn, the
Zephyr, or the riverboat), senior citizens' groups and other
groups (Garden Clubs, or whatever) describing the many
attractions of Stillwater. The hospitality center would
coordinate arrival and departure times for groups and facili-
tate their reaching the desired attractions. The center
could, for example, deliver a group to the Lowell Inn around
noon (where and when they would be expected) and then pick
than up and deliver them to the retail area on the south side
(Brick Alley, Tamarak, and adjacent building and businesses)
later, finally returning then to the hospitality center to
ride their own bus back hone.
By having the hospitality center facilitate and coordinate
these activities, attractions would be less likely to be
overloaded and some of the good, but lesser -known attractions
(Aamodt's and the riverboat for dining) would receive more
exposure. Also, groups arriving for a single attraction
could became aware of the other attractions and, hopefully,
return at a later date.
70
A fleet of trolleys or double -decked English style buses
could make the shuttle service an exerience itself. The
buses of incoming groups would have a parking area away from
downtown and would not be needed during the day, reducing
confusion and congestion.
The cost of this proposed hospitality center and director as
will other marketing efforts could be offset by imposing a
transient roan tax on local hotel rooms. In this way the
visitors themselves would help offset the cost of developing
a coordinated marketing effort geared toward the tourist
market.
Artist's Village (8,000 - 10,000 sq. ft.)
Stillwater currently has a number of art galleries and
various craft shops that appeal mostly to the visitor.
Several of these businesses are located on the north end of
the CBD while the number and type of these shops is not in
question their location relating to other similar shops in
the City is.
A more synergistic draw of visitor dollars may be possible if
a number of these shops and galleries were to be located in a
single building similar to an arts and crafts shopping
center. Visitors would welcome this agglomeration as an oppor-
tunity to view the different offerings and make their selec-
tion.
The Staples Mill development on the downtown's north end is
similar in concept to an "Artist's Village", but it does not
have the concentration of shops found in similar communities.
Cederberg, in particular, has several examples of this con-
cept with others located in West Bend, Galena, and Door
County.
71
Rent would need to be affordable for such use. Therefore, an
older structure that could be cheaply renovated would be
ideal situation.
Hotel Development
A mixed use upscale hotel/meeting roan/retail development is
proposed as an anchor for the development of Stillwater's
north end. The north end physically has ample reasonably
priced vacant or under utilized land for such a development.
The rationale for suggesting this type of mixed use hotel
development follows.
To determine the demand for hotel space in the City of
Stillwater, the hotel roans per capita in selected comparison
ca munities were compared to the per capita hotel roans in
the City of Stillwater. This comparison is shown in Table 8.
Table 8
Canparison of Hotel Roans Per Capita
For Selected Cannuities
# Roans
Population
Ratio Persons Per Roam
Stillwater, MN
83
12,290 f
148
Red Wing, MN
60
13,736
228
Galena, IL
229
3,876
17
Sturgeon Bay, WI
118
8,847
75
Port Washington, WI
60
8,612
144
Sister Bay, WI
71
564
8
Bailys Harbor, WI
96
615
6
Hudson, WI
105
5,434
52
West Bend
99
21,484
217
Average persons per roan 99.44
* Not including B & B establishments.
Source: Hotel and Motel Red Book, 97th Annual Edition,
Current May 1983 through April 1984. American Hotel
Association Directory Corporation.
72
As shown in Table 8, the average persons per room is 99.
Stillwater has about 148 persons per rooms based on this can-
parison. Galena Illinois often sited as a comparison can-
munity has about 17 persons per roan. Of course Galena is
presently more dependent on tourism than the City of
Stillwater. Searching the person per .roan figures one can
identify those communities to which tourism plays a very
significant role, i.e. those communities with very low
person per roan statistics.
The focus group session produced the suggestion that a hotel
would be an acceptable development for the north end. There
was also considerable support for retail and office space as
good north end development opportunities. Therefore, we
suggested a mixed use development that would increase the
number of rooms per capita while allowing for sane meeting
space as will as first floor retail development.
To further support such a development, Phase I of the
Economic Development Strategy suggested that when compared
nationally, Stillwater had less Employment in the hotel/motel
industry than would be expected even to meet its own needs.
More hotel space could be the cornerstone of the City of
Stillwater's efforts to expand its penetration of the tourist
market. The increase in the hotel rooms would encourage
longer visits to Stillwater by tourists which encourages them
to spend more dollars in the community.
One question raised about the wisdom of developing more hotel
space in the City of Stillwater was that so many visitors to
Stillwater live so close, that convincing then to staying
overnight would be difficult. Therefore, the origin of visi-
tors who were intending on staying overnight in Stillwater
was determined through crosstabulation. The results of this
analysis are shown in Table 9.
73
Table 9
Origin of Overnight Visitors
Minn/St. Paul Western
Metro Area Wisconsin Minnesota O-O-State
% Staying
Overnight in
Stillwater 54% 0 7.6% 37.5%
Source: Visitor Survey, August 1987.
As shown in Table 9 over one half of those visitors staying
overnight are from the Twin Cities Metropolitan Area. As
almost 70 percent of the visitors to Stillwater are from the
Twin Cities, an ample market for additional hotel space seems
to exist.
The visitor survey suggested that bed & breakfast establish-
ments were the most favored type of overnight accommodation.
However, after discussing the B & B situation with several
managers of such establishments, it was determined that until
the existing B & B's can build their clientelle to a more
stable level, more B & B establishments are not recommended
at this time.
The hotel development that we recommend includes fram 50 to
100 rooms. The addition of 100 roams to the City of
Stillwater would only decrease the City's person per hotel
roan figure fran 148 to 67. That would bring Stillwater's
rooms per capita figure more into line with other communities
which offer both industry and tourism (i.e. Sturgeon Bay, WI,
75 persons per room).
74
Along with the hotel development, we recamiend sane retail
development. Perhaps one or more of the retail development
opportunities included in this report could be prospective
tenants. However, the square footage of additional retail
that should be associated with the proposed hotel development
will be dependent on the number of hotel units developed as
well as the location of the new development. Therefore
square footage recommendations will not be made at this time.
Finally, we suggest the development of a hotel on
Stillwater's north end only if at least one of the two pro-
posed hotel developments (Radisson, and expansion in the case of
the Lowell Inn) do not take place. If the Radisson Hotel
(100 units) is developed along with the 80 room expansion of
the historic Lowell Inn, development of yet another hotel
in the near future is not recommended.
Gourmet Food Shop (1,400 sq. ft.)
Based on the model of a highly successful development in Door
County, WI, a gourmet food shop is being recommended as a
development opportunity for Stillwater's CBD. The
danographic characteristics of the local population as well
as of visitors to the area suggest that a gourmet food shop
is a development that could be supported in Stillwater.
There has been tremendous growth in the area of specialty
food and drink items, especially among the so called "baby
boon" generation. The growing purchasing power of the "baby
boon" generation and a generally favorable economic outlook
over the next few years contribute to a favorable outlook for
all types of food retailers. And although the U.S. popula-
tion is not expected to increase more than 1 percent
annually, improving disposable income will support continued
growth in the food retailing industry at all levels.
75
According to one econanic consultant, by 1995 more than twice
as many households currently headed by persons 25 to 35 years
of age will have annual incomes of over $50,000 measured in
constant dollars. Certainly the higher inane, higher edu
cated visitors and residents of Stillwater fit the descrip-
tion of persons attracted to a gourmet food shop.
The success of a gourmet food store in the City of Stillwater
will be enhanced if the store can develop a marketing stra-
tegy and product line that appeals to both local residents
and visitors alike. About three quarters of all large gro-
cery stores now have either gourmet or low -calorie food
departments, further substantiating the popularity of such
items among consumers.
rnnel i tG i nn
The development opportunities identified in this report
suggest that the Stillwater CBD can support approximately
25,000 sq. ft. of retail space and about 13,000 sq. ft. of
service related space. These square footages represent gross
leasable space.
76