2017 R ena i s s anc e P l an U pdat e | T own of W ak e F or e s t
5.3 Locational/Development Strategy
One of the challenges facing new retail and mixed-use development in downtown Wake Forest today is that the kinds of tenants which would be most realistic at this point in its evolution (and which have been recommended in the positioning strategy) tend not to be so well-capitalized or creditworthy. This could have implications on the pro formas and financing of new projects. The obstacles are even greater in the case of the restaurateur, who would also need a new kitchen and most likely have to rely on the developer to pay most, if not all, of the upfront cost of building one, thus increasing the perceived risk and complicating the development economics. The same holds for the rehabilitation and reuse of existing buildings. While their seeming inaction has engendered quite a bit of frustration among local stakeholders, the owners of such properties should not necessarily be expected to spend the money on (often expensive) historic renovations unless and until such reinvestment can generate returns that “make the numbers pencil”. Based on a review of listings on www. cityfeet.com, rent plus pass-throughs for roughly comparable space across Wake Forest is currently in the range of $13–17 per square foot. The kinds of tenants recommended as part of the positioning strategy are in most cases not going to be capable of grossing above $150 per square foot (for shops) and $250 per square foot (for restaurants). This means that their occupancy costs should be no higher than the mid-teens.
In order for projects in downtown Wake Forest to move forward, the retail rents on the ground floor, combined with the returns on the non-retail uses upstairs, will need to cover all of the costs involved in new construction or rehabilitation (such as land acquisition/assemblage, historic renovation, build-out assistance). Once in operation, they must also provide a profit margin that meets the property owner’s goals and expectations. So, it is possible that existing businesses may not be able to afford to rent commercial space in new construction projects that will eventually be developed. But, it is imperative that every effort be made to place local, authentic businesses into new development as it emerges. There will be plenty of out- of-town chains that can pay more rent and will want to locate in Wake Forest. But, local businesses have establishes and will continue to reinforce a strong, unique sense of place for downtown Wake Forest that is highly desirable and will differentiate it from competitors. The following discusses the three different “areas” of downtown Wake Forest — southern (from East Holding Avenue to Elm Avenue), central (from Elm Avenue to Wait Avenue/Roosevelt Avenue) and northern (from East Roosevelt Avenue to East Spring Street) and establishes priorities for the Town’s limited energies and resources on the basis of where the greatest near-term retail potential seems to lie.
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