4.1. SR 08-11-2008 - Laserfiche WebLink

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EXECUTIVE SUbIlVIARY - The one issue that would make the Site less desirable for industrial space users is the dis- tance to Interstate 94. This fact will segment the market for industrial users, and make the Gateway Business Center site appealing to certain types of industrial users, similar to the ex- isting mix of industrial users in Elk River currently. - Industrial employment is projected to be strong in the region, especially in the Construction, Wholesale Trade, and Transportation sectors. This projected growth will continue to drive demand for industrial space in azeas with access to the State's transportation system - Employment growth in Elk River has been steady. Over 2003 and 2006, Elk River added several new industrial businesses, almost all small manufacturers, with about 200 new jobs added. - Manufacturing employers aze attracted to the quality labor force, good access to the trans- portation system, lower land prices, and the availability of larger lots for potential expan- sion. We believe that, even as manufacturing becomes a smaller part of the overall regional economy, Elk River will remain an attractive location for these employers into the next dec- ade. - The industrial mazket in the northwestern Metro Area is strong and is improving. Between 2005 and 2006, we estimate that about 1.8 million-square feet of industrial leased space was absorbed. Over that period, the vacancy rate in the sector declined from 10% to 7.5%. - The industrial space market in Elk River is relatively strong. Affordability and availability have driven industrial development in Elk River, where other azeas of the Twin Cities have struggled due to higher land costs. The Elk River multi-tenant market is chazacterized by newer facilities that aze still in their lease-up phases. These newer facilities tend to have higher vacancy rates than the overall market. The industrial land market has also been rela- tively strong; we estimate that between 2003 and 2006, the average absorption was about 67,500-square feet of industrial building space for owner-occupied industrial land. - Based on our Site analysis, demographic analysis, competitive market analysis, and inter- views with industrial brokers, we project that annual industrial land absorption in Elk River will be about 11.8 acres per year. We believe the Gateway Business Center could capture about one-third of this demand, or about four acres per yeaz. Recommendations Based on our analysis, we do not recommend traditional retail uses at the Site. The access, visibility, and competitive mazket issues dictate that retail would struggle to fmd a market. We recommend a mix of traditional industrial space (office warehouse, manufacturing) with more non-traditional industrial space (office showroom, flexible office/wazehouse). We recommend that the more traditional industrial space be located on the eastern portion of the Site, in the area currently being designated as light industrial. We recommend developing the non-traditional industrial space adjacent to Highway 10, where there would be better visibility. This western MAXFIELD RESEARCH iNC. iii