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Town Council Study SessionSuccess of Local Business:

Main Streets and the Housing Connection

January 17, 2018

Study Session

Oro Valley’s Future

Economic Development, 

Main Streets and Housing

Market Study

Lessons Learned

Future Decisions

Takeaways

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Oro Valley Community

Looking to the Future

Challenges:Approaching build‐out

Shifting land use needs

Consider:Economic development

Housing as driver

Goal:Long‐term sustainability

Growth Maturity Decline

We are here

Growth Maturity Renewal

We are here

Purpose

Be proactive and strategicUnderstand the issues

Frame future decisions

Think of economic development and land use together

Residential, office and retail are connected

Housing growth, density, diversity

Don’t sacrifice commercial and employment areas

Be smart with remaining landBe patient and make sustainable decisions

Think about new programs and flexible zoning

Housing diversity

Resident diversity

Economic sustainability

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Young Professionals 

Spend more money Acquisition vs. disposition mode

Spend on commercial and retailSupports Town services

Sustains commercial areas for everyone

Drive movement in residential market

Do your kids live here? Could they if they wanted to?

Who buys your home when you want to downsize?

Complete Community

Looking to the Future

To be a well‐managed community that provides all residents with opportunities for quality living. Oro Valley will keep its friendly, neighborly character, while increasing  services, employment and recreation. The Town’s lifestyle continues to be defined by a strong sense of community, a high regard for public safety and an extraordinary natural environment and scenic views.

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Oro Valley Main Streets

Looking to the Future

Community desire for a town 

center

Plan now for long‐term

Address build out and growth 

pressure

Enhance character and appeal

Attract young professionals

Support businesses

Use innovative programs and 

zoning

Unique in Oro Valley

Location Characteristics

Many housing units within walking distance

Nearby parks and recreation

Nearby civic uses

Varied and vibrant commercial areas

Available parking and circulation areas

Interested businesses and property owners La

Cañ

ada

Lambert

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Opportunity Exists

Future Opportunity

PublicRight of way

PrivateVacant land

Parking areas

Opportunity areas

Thinking Ahead

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RESIDENTIAL AND MASTER PLANNED COMMUNITY

OFFICE (Purple)COMMERCIAL (Blue and Red)

Purpose and Topics

Main Streets Market Study

Conditions and opportunities for real estate development and redevelopment

5‐10 year timeframe

Ground policy, design and development proposals within context of market conditions

1. Executive Summary2. Context3. Site Analysis4. Housing Market5. Office Market6. Retail Market7. Parking Analysis8. Recommendations

1. Executive Summary2. Context3. Site Analysis4. Housing Market5. Office Market6. Retail Market7. Parking Analysis8. Recommendations

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All aspects are connected

Community Vitality

Residential

RetailOffice

Oro Valley Growth

Based on trends:Solid job growth

Consistent population growth

However:Community almost built‐out

Smart decisions needed for remaining land

Note: Across all land use categories, Oro Valley is 85% built‐out

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Comparison Areas

Nearby households:At least 50% more than Oracle/1st

At least 3 times more than Lambert/La Cañada

The Residential Market

Tucson Region Options

Struggle to serve first‐time homebuyer, including young professionals and the general workforce

Huge gap in pricing

Homes under $250,000

70% of resales

30% of new home salesHomes over $250,000

30% of resales

70% of new home sales

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The Residential Market

Oro Valley OptionsOne of the least affordable submarkets

New home pricing is a function of land pricing and availability

New homes – 60% higher than County

Resales – 44% higher than County

Oro Valley Residential Activity

Current Development

Healthy building activity for single‐family detached

Estimated 7 year lot supply available

Limited activity for single‐family attached

Limited multi‐family,  regional demand exists

Future Development

Depends on development requests and site conditions

Developed78% of land8,221 acres21,766 units

Active and Planned

14% of land1,473 acres~2,200 units

Unknown8% of land866 acres

~3,600 units

Vacant22% of land2,339 acres~5,800 units

Residential Land(Based on Current Trends)

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Opportunities – Capture the “Missing Middle”

The Residential Market

Near term (3‐5 years)Increase residential density

Develop a variety of housing types

Target the $300k and under homebuyer to capture a larger market share

Longer term (5+ years)Add mixed‐use development

Trends and Opportunities

The Office Market

NationalOffice market in flux

Changes impacting new development:

Central business district

Densification (less space/worker)

What’s considered “Class‐A”

Tucson Region Strong performance 2005‐2007

Since 2007, higher vacancy and lower rental rates

Cautious regarding speculative office development

Oro Valley Medical office development –multi‐physician specialty offices

90,000 sf (5‐year supply) of unabsorbed office space in Oro Valley

Innovation Park and potential expansions

Future U of A Vet School

Main StreetsOffice/retail and services

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The Retail Market

NationalContinued expansion of online retailing

Shrinking retail footprints

Shifting demographics

Consumer preferences changing

Store shift from sales to services

Emphasis on placemaking

Tucson RegionNo speculative retail, need 50% commitment to get started

Retail development more dispersed

Oro Valley OverallOro Valley delivers around 22,000 sf of retail a year

160,000 sf of retail is vacant now

Main Streets AreasUndeveloped vacant retail pads

Baby boomer driven retail

Trends and Opportunities

Housing as Driver

Key Findings

Grow # of households

Increase density

Diversify types and price‐point

Attracts new businesses

Supports existing businesses

Makes alternative transportation viable

Strengthens existing employment areas

Attracts new employers

Provides options for all residents

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Rancho Vistoso

Original PAD Remaining Commercial

Rancho Vistoso

Original PAD

Current% of 

Original

13,862 residential 

units

9,470 unitsdeveloped or planned

68%

8%

27%

65%

COMMERCIAL ACRES

Rezoned Vacant Developed

RESIDENTIAL COMMERCIAL

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OV Marketplace

AverageOV 

Marketplace

Size in sq. feet 570,789 860,000

Income within 5‐7 miles

$83,008 $89,318

Population within 5‐7 miles

211,061 129,826

Population per sq. mile

41,739 18,547

Sq. feet per person

2.9 6.2

Compared to all Vestar Properties in Arizona

OV has too much supply and not enough people

Chandler

Gilbert

Glendale

Mesa

Oro Valley

Peoria

Phoenix

Scottsdale

Tempe

Queen Creek

OV Marketplace

LocationPop. (1.5 miles)

House‐holds (1.5 miles)

Retail planned(sq. ft.)

Vacant

OV Marketplace

2,185 884 860,000250,000 sf unbuilt

Lambert / La Cañada

5,846 2,427 190,00052,600 sf unbuilt

Oracle / 1st 8,561 4,107 836,000215,000 sf unbuilt

Casas Adobes 13,241 6,208 100,000 0 sf

Compared to other Oro Valley areas

Tangerine

Ora

cle

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Oracle Corridor

Villas San Dorado274 units, 93% occupied

Encantada at Steam Pump288 units, 91% occupied

Canyons at Linda Vista Trail228 units, 93% occupied

Panera BreadChipotle Mexican GrillJersey Mike’s SubsMOD Pizza

Lessons Learned

Planning for residential 

and commercial

Higher density 

residential built

New and successful businesses

Lacking residential nearby

Competing commercial 

areas

High vacancy and struggling commercial

Less than planned residential 

built

Commercial land loses viability

Vacancy and commercial conversion

Rancho Vistoso

OV Marketplace

Oracle Corridor

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Be patient and make sustainable decisions

Takeaway #1

Opportunity for creative infill and redevelopment

Make choices that will support retail and office sectors – housing for young professionals and the workforce

Density

Variety

Price point

La Cholla Corridor

Major corridor Current capacity: 14,000 trips/ day

Future capacity: 24,000 trips/day

Development comingSaguaros Viejos

Shannon Road

Capella

Fasseas

Consider:Commercial viability

Community benefits

Tangerine

Naranja

Lambert

217 units

500 units

91 units

80 units

Apartments?

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La Cholla Corridor

Retailers will look for:

Location

# of households nearby

Traffic capacity and access

Uses aligned with the market

(Current + Planned)

La Cholla and Lambert600 units

(Current + Planned)

La Cholla and Naranja

1,100 units

(Current)La Cañadaand Lambert1,500 units (53,000 sf vacant!)

Naranja

LambertLa

Cañ

ada

La C

holla

Innovation Park and Office Areas

Land Use Analysis

Innovation Park Area12 projects built since 2000

10 acres average project size

51% of buildable land is developed or planned for development

20 year supply of land remains

Commerce / Office Park Land Use

Built‐Out

Planned Development

Remaining Vacant

Other Buildable Land Uses

Innovation Park Area

Ora

cle

Ro

ad

Tangerine Road

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Land Use Analysis

Innovation Park and Office Areas

Oro Valley Marana, 

AZ

Boulder, 

CO

Carlsbad, 

CA

Scottsdale, 

AZ

Chandler, 

AZ

Population 43,565 43,474 107,167 109,004 231,200 253,098

Total Land 

(sq/mi)36 121 26 39 185 65

Land Use 

Emp Acres400

(2%)

9,818 

(13%)

2,313 

(14%)

1,424 

(6%)

approx. 

3%

6,135 

(15%)

Land Use 

Emp Built‐

Out

188 

(47%)

1,473 

(15%)

approx. 

13%

472 

(33%) 

approx. 

15%

3,485 

(57%)

Economics of Residential and Retail

Perception: Only residents support retail

Reality: Office workers and residents offer about the same retail spending power in a single‐person comparison

Positive 

• Upzoningresidential

Negative

• Downzoning commercial and employment

Commercial and employment areas:

Don’t need as many services

Serve to create synergy

Necessary for long‐term sustainability

Add housing strategically

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Future Decisions

Planning for residential 

and commercial

Pressure to reduce # of housing units

?

Planning for office and 

employment

Pressure to convert 

employment to residential

?

La ChollaCorridor

EmploymentAreas

Think about new programs and flexible zoning

Takeaway #2

Reevaluate development regulations and zoning

Establish an overlay or redevelopment district

Fast track and incentivize varied residential in infill locations

Permit easy redevelopment of vacant big box stores

Even faster track for tech park (EEZ++)

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Summary

Be proactive and strategic

Think of economic development and land use together

Be smart with remaining land

Past Challenges

Past and Future Success

Discussion

What surprised you?

What resonates with you?

What are some actions you would like to see?

How will you use this information?

What would you like more information on?

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Takeaways

Think about new programs and flexible zoning

Reevaluate development regulations and zoning

Establish an overlay or redevelopment district

Fast track and incentivize varied residential in infill locations

Permit easy redevelopment of vacant big box stores

Even faster track for tech park (EEZ++)

Be patient and make sustainable decisions

Opportunity for creative infill and redevelopment

Make choices that will support retail and office sectors – housing for young professionals and the workforce

Density

Variety

Price point