* AgendaWORK SESSION AGENDA
January 22, 1996 7:00 p.m.
1. Business From Mayor and Council
2. Business from Manager
3. Two Minor Subdivision Requests
4. Ordinance #1236 Amending Ordinance #1166-Changes Method of
Electing Council President
5. Golf Negotiating Process Briefing
6. Mall Discussion
7. Continue Review of the Water Rate Report
8. Reappointments to Street Tree Commission
Next Regular Meeting February 5, 1996 7:00 p.m.
Next Work Session February 12, 1996 7:00 p.m.
WORK SESSION AGENDA
January 22, 1996 7:00 p.m.
Business From Mayor and Council
Business from Manager
Two Minor Subdivision Requests
Ordinance #1236 Amending Ordinance #1166-Changes Method of
Electing Council President
A Golf Negotiating Process Briefing — (SOL-F r66.5
Mall Discussion
7. Continue Review of the Water Rate Report
Reappointments to Street Tree Commission
Next Regular Meeting February 5, 1996 7:00 p.m.
Next Work Session February 12, 1996 7:00 p.m.
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Emphasis ion Huge'- tores
May Spell Ultimate Bust
For Shopping ,`.Centers
By M ELL PAcam
Staff Reporter o INA" St ar iollbi"L
ny stores. So why fs
reminiscent of thA 1980s? = =
The reason that discount retailers
like Wal-Mart Stores and Horne Depot Inc.,
hungry for additional space, have been
building more "big -box," or huge, ware-
house -type, stores. often, such stores are
grouped together in so-called power cen-
ters. At the same time, the discount chains
have been bypassing the vacant shopping
centers that alreoy dot the nation simply
because the spaces aren't big enough...
The result, r#a.l-estate experts say, Is
likely to be riAng vacancy' rates and
worsening financial distress for more ag-
ing' shopping centers.: Meanwhile,, ,the
rapid growth of huge discount stores could
lead to an eventual shakeout in that sec-
tor.
Contracts Increase
In 1995, new contracts were .awarded
for the construction or renovation of 260
million square feet of stores and shopping
centers, up from 173 million square -feet in
1991, according to the F.W. Dodge division
of McGraw-Hill Cos. That matches the
highest levels of both the 1970s and 1980s.
The International Council of Shopping
Centers, a trade group, said contracts were
awarded for the construction of 413 new
shopping centers during the first three
quarters of 1995, up from 365 in the year-
earlier period and 328 in the 1993 period.
".:It's the only real-estate sector where
you can say, without a doubt, that we're
experiencing overbuilding," said Mike
Kirby, a real-estate securities analyst with
Newport Beach, Calif. -based Green Street
Advisors.
"What really stands out about retail
construction is that the total we're seeing
for 1995 is very close to the peak in the
mid-1980s," said Robert Murray,; vice pres-
ident of economic affairs for F.W. Dodge,
which tracks construction contracts. "Re=
tail is the maverick of the real-estate
sector."
High Per -Capita Space
Rampant new construction has helped
push the total supply of retail real estate
nationwide to nearly 19 square feet for
-every man, woman, and child, more than
double the level of 20 years ago.
"That number is too high. It needs to
come down," " 'gtained Christopher Nei-
haus, a real Qe investment banker at
Morgan, S' t & Co.
Between 1992 and 1994, 55% of the ne,
retail square footage was built by big-bo
retailers, according to Ronald Pastore c
Aldrich, Eastman & Waltch, a Bostor
based real-estate firm. In 1994, such n
tailers accounted. for 80% of all new store:
he said.
Some longtime mail developers hav
avoided getting involved in big -box cor
struction because of worries about over
building.
"One has to ask the question, 'Is ther
that much demand?' " said Don McCrory
head of the retail division of Houston
based Hines Interests, a major office an
mall developer that has avoided big-bo
development. "We don't understand thi
multiplicity, of stores. why you need, sa3
four big bookstoresin one" town.
Discount retailers now are often finan(
ing the construction of the stores then
selves rather than relying on developer:
which was common during the mall-builc
ing boom of the 1970s and 1980s.
"In an increasing number of cases, th
retailers are doing it on their own," e)
plained Mr. Pastore. Lenders are "banl
ing on the credit of the tenant. The role c
the developer, if any, is either finding o
owning the site, and quite frankly, bein
captive to the tenant."
Morgan Stanley's Mr. Neihaus, for one
predicts that the discount sector is headin.
for "the biggest shakeout" in retailin
because of overbuilding.
Vacancy Rate Seen Rising
A Merrill Lynch & Co. research repot
raised doubts about whether the retail
leasing market will be strong enough t
absorb all the newly constructed space. 1
is "almost inevitable," the report said
that retail vacancy rates will rise thi
year. _ . -
-, Already, the older strip shopping cen
ters are feeling the effects.
'The obsolete space is writhing on th
ground, yet not being taken out of th
inventory,`' said Mr. Pastore.
The real-estate ramifications of a possi
ble shakeout among discounters is les
clear.
Mr. McCrory said: "our question is, i
the big -box tenant goes out of 4:usines.,
what do you do with that enormrJus boxT
0
Montana Department
AV
of Transportation
Marc Racicot, Governor
January 16, 1996
Mr. Bob Babb
Director of Public
City of Kalispell
PO Box 1997
P.O. BOX 7039
MISSOULA, MT 59807
406-523-5800
VAT*32
Kalispell, MT 59903
Subject: North Meridian Extension
Dear Bob,
This is to confirm our general agreement on the extension of
Meridian Road easterly from US-93.
We are in agreement that the initial roadway, intersection,
and signal will be designed for full access and all
movements. We still need to review the detailed geometrics
and signal plans. These should be submitted through Steve
Herzog.
The above approval will be conditioned on the agreement that
once either the Meridian Road project south of US-93 or the
Northridge Drive connection east of the US-93 is constructed
that the east leg of Meridian Road will be reconfigured to
prohibit left turns and through movements into the
intersection. It is agreed we will allow right turns
northbound onto US-93, but only with the understanding that
we will not allow this movement to "demand" time from the
signal or to diminish the overall capacity of the
intersection or US-93.
I hope this is a satisfactory solution to all parties,
including the developers. We firmly believe this will go a
long way towards enhancing traffic flow on US-93. I
certainly appreciate your help and assistance in reaching
this compromise.
sincerely,
James T. Weaver, P.E.
District Engineer -Missoula
JTW:kld:21
cc: District File
Steve Herzog
Don Dusek
An Equal Opportunity Employer