EDC Minutes and Attachment 1

ECONOMIC DEVELOPMENT COMMITTEE The Economic Development Committee met on February 11, 2020 at 4:38 p.m. with Mayor Christiansen presiding. Members present were Mrs. Mitchell, Mr. Hugg, Ms. Laird, Mrs. Adams. Mr. Lindell, Mr. Cole and Mr. Hammond were absent. Adoption of the Agenda Ms. Laird moved for adoption of the agenda, seconded by Mr. Hugg and unanimously carried. Updated on Data Collection Economic Assessments Ms. Linda Parkowski, Executive Director of Kent Economic Partnership (KEP), gave an overview of the Rockport study that was done at the end of 2018. She advised that they realized there were a couple of things that they needed Rockport to drill down further. She stated while Rockport gave them target industries, Rockport did not give them whether they had the workforce so that the KEP could actually pitch to those targeted industries. Ms. Parkowski stated they have asked Rockport to go back and do a deeper dive into the data and to look at the top 15 targeted industries that they identified last time and now align workforces with them. Ms. Parkowski stated that Rockport is going to do a deeper dive for the County and that other municipalities asked for an economic analysis. She advised that they went to Rockport and asked if there could be cost savings if the municipalities did this together as one large report and Rockport came back with a really good proposal. She noted that Smyrna, Milford, and Dover will get a deeper dive into economic analysis with their top three targeted industries. She stated they may be similar to Kent County's, but they may be different depending upon the workforce numbers and the leakage. Ms. Parkowski advised that this study is going to give a comparison into what the difference between doing business in Dover and doing business in Federalsburg, Maryland, Southeast Pennsylvania, South Jersey is. She noted they will be able to use that in their marketing materials in the future and also in pitches and that it is going to be extremely helpful. Ms. Parkowski stated she just signed the Rockport proposal that day so they will get working on that soon. Ms. Parkowski stated they also contracted Mr. Rick Ferrell, Consultant, Retail Market Answers, LLC, through his work with the Downtown Development Districts, each municipality in Kent County is going to get a retail gap analysis. She noted that the KEP is picking up a portion of that fee, so that Mr. Ferrell could do that for every municipality. International Council of Shopping Centers (ICSC) Conference Discussion Ms. Linda Parkowski, Executive Director of Kent Economic Partnership (KEP), stated the KEP has an opportunity to go to one of the largest retail commercial trade shows in the beginning of March in Washington, D.C. She advised that they are going to go as a group and that right now Dover and Smyrna have signed up and thinks Milford is going to go with them. She stated at the show they will get to meet with the Wawas, the Royal Farms, the Burger Kings, and the retail stores. Ms. Parkowski noted that she went to one in Philadelphia in August just to get the lay of the land and came back and said we need data, our traffic data, transportation data, population data, and other information. Mr. Hugg stated the conference is an opportunity to sit down and get face-to-face with site selectors for a lot of retail folks, some of which they may not have even realized are out there and might be

ECONOMIC DEVELOPMENT COMMITTEE MEETING OF FEBRUARY 11, 2020 PAGE 2 good targets for them. Mr. Hugg referenced and reviewed a map titled “Commercial Retail Hot Spots in the City of Dover, DE,” (Attachment #1). He stated the actual format will be one page, the front and back with the map and each zone described in some detail in terms of what the characteristics of it are. He gave examples of zones one through five: • In zone one the dominating feature is the Dover Mall and in the vicinity of Dover Downs and there is great access to SR1's and very strong retailers in area and three universities. The traffic volume on average is almost 65,000 vehicles a day. • Zone two is the strip in the middle of Dover that runs from roughly the Pizza Hut down to Capitol Station. It is a well-established corridor. There is particularly significant redevelopment and it has been the location of a number of food establishment and some new shopping, in the form of Lidl and Aldi and others in all of these cases. Through zone two, 43,000 vehicles a day. • Zone three is the Bay Road area, which is what they are promoting as fast as they can. They are converting old mall and commercial spaces to new office buildings, but that is creating a shortage of personal services and food locations. They will be promoting these areas to these site selectors in Dover because it is probably underserved in terms of food. It is clearly an area that might be well targeted for that need and for hotel spaces to serve the Delaware Turf zone. • Zone four is the Route 8, kind of Western corridor or the gateway into the City, which has their image of a neighborhood character and might appeal to uses that are not necessarily focused so much on through travelers but focused on people who live in the area. • Zone five is the Downtown Historic Center and about 10,000 vehicles a day that go through downtown at the Governor's Avenue intersection. Mr. Hugg noted that these zones are different, but have somewhat similar characteristics and offer opportunities for a variety of uses. Mr. Hugg stated that based on work that Mr. Ferrell has done for them and that has already been done for the Downtown Dover Partnership (DDP), they list probably 15 or so classes of uses or businesses that might be attractive. He stated they range from food and beverage of all types to travel, tourism, bookstores, hotels, motels, b&b's, live and work loft kinds of residences, specialty shops that deal mainly in things like beer, wine, cheese, nuts, confections and oils. Mr. Hugg noted that the purpose of this document and the purpose of going to the ISCS Conference, is to see what is out there and to sit down in front of retailers and give a brief history, and say here is what we are looking for, sign on the bottom line and come to Dover. He noted it is an important thing that Dover has not done in the past and guessed that the County really has not done it.

ECONOMIC DEVELOPMENT COMMITTEE MEETING OF FEBRUARY 11, 2020 PAGE 3 Mr. Hugg stated that the first day of the conference is some theory and practice and the second day is the deal-making opportunity. He noted that this will give them a chance to tell people a little bit about Dover and may be get them to at least pick the phone up and check out central Dover and see if there is something there for them. Gap Analyses Discussion (Rick Ferrell) Mr. Rick Ferrell, Consultant, Retail Market Answers, LLC, gave an overview of Gap Analyses and possible uses. Mr. Ferrell noted that the fastest growing component of membership to the International Council of Shopping Centers (ICSC) is no longer developers and retailers, but municipalities. Mr. Ferrell stated that the work that he does with the Downtown Development Districts as part of a contract with the Department of Housing and Small Business at the State level dovetails with some of the work that he does with Restoring Central Dover. Mr. Ferrell noted that one of the things about working in and with Dover has been that there are a lot of different people at the table discussing economic development. He stated as a result it has allowed them to connect and leverage opportunities so that Ms. Parkowski, with her work with the partnership is able to leverage and manage his work with the partnership and the State so they are maximizing the limited resources that the parties have. Mr. Ferrell advised that the information that he gathered with opportunity gap is really supply and demand data. He stated that he looked at Dover, not in the geography measured by miles, but in the geography measured by drive time because the infrastructure that delivers potential customers to this part of the region is very accessible. Anybody that lives or passes through Delaware really refers to the context for what they are willing to do, more by how long it takes to do it rather than how far they have to go. He advised that they can actually move about pretty freely and in very short periods of time, with prevailing traffic patterns and speed limits, they can cover a lot of ground. Mr. Ferrell advised in relation to Dover's access to potential customers in terms of 10, 20, and 30-minute drive times, it is a much more powerful way to talk about the opportunities that are presented from an economic standpoint. He looked at what was the geographic center of downtown and the drive times in 10, 20, and 30-minute periods and found that it gave access to a great number of population that they do not have if they simply looked at Dover proper or some radia extending out beyond Dover proper. He advised that they found that the quality of those potential customers is significantly elevated, so they are higher mean and average incomes, more spending power. Mr. Ferrell stated that the next step would be to identify what do they want to do with that data. He stated he wants to capture the data so that they could start to talk about what the possibilities are. Mr. Ferrell advised that the data looked at lots of categories of goods and services and in the same geographies of 10, 20, and 30 minutes. They looked at the demand for those goods and services in the region then compared that in the same geographies for the supply of those goods and services. He noted that sometimes they would see that the demand for a service is greater than the actual supply, which means that people that live here have to leave the area to get those goods and services. Mr. Ferrell stated when there is a category that is underserved, it does not mean that when they knock on their door, they will get it the same way they do, but it gives the opportunity now to express to them why we think that their goods and services are a good fit for us. He stated the reason is because they have some evidence that people are currently leaving the area to get those things because they

ECONOMIC DEVELOPMENT COMMITTEE MEETING OF FEBRUARY 11, 2020 PAGE 4 cannot obtain them here. He noted that it is a really good starting place when they are looking at strategies for the recruitment of new businesses, the attraction of new businesses, and to have that data in their pockets so that if they do not know it already, they can share it with them. Mr. Ferrell stated that the other side of it is that it is not simply data that they can use for startup or attraction purposes, some of this data is going to be very relevant with people who have already invested in a business in the area in the community. Mr. Ferrell advised that this is really useful on a lot of different levels, sometimes businesses are not going to know this information, other times, like at the ICSC, they are going to find that those site selectors are coming with a great deal of information about what they require. They may not know Dover yet, but they will tell you what they need, and then Dover will see if they can meet those needs. He stated in other instances they are going to be informing people about this because they have not taken the dive into the region to really understand the access and quality of customers that they might have when they come here. Mr. Ferrell noted that this is really current and relevant for Dover and relates to a lot of what the Rockport study showed earlier. He stated while it shows the components or sectors that are underserved and ripe for recruitment from new jobs and employment standpoint and growth standpoint, one of the things that Rockport also showed is when you are developing that workforce population, you need to have the goods and services that people expect when you are recruiting a workforce to come to your area and that includes things to do when they get home from work at night. Mr. Ferrell noted that retail mom and pop shops are the backbone of our downtown areas and are incredibly important because they give relevance to somebody that is trying to recruit a workforce here. He advised that it has relevance that extends to our downtowns and our Carter type of opportunities alike and they are going to find more out about that as time goes on. Mr. Ferrell advised in terms of the Dover information, he came up with a quick way of looking at the market and it highlights in bold red when all three geographies, 10 minutes from here, 20 minutes from here, and 30 minutes from here. He noted that they all appear to be underserved. He stated he made it bold to look at it as something for future discussion. He noted when it ticked in two of those geographies, he made it red but not bold and when it did not tick, it is just in black and white. Mr. Ferrell stated that it is not to say that things that are in black and white and did not appear to be underserved there would not be welcomed if they were well-run. Mr. Ferrell stated capitalized businesses that had a desire to be here would still look at those, but when they are looking for those starting places and expansion opportunities, it would be a guide with that. Mr. Ferrell stated that this data can be made actionable and go into the market by capturing the geography and the inventory that is available in the downtown as an example, either by vacancy or by underutilized property, property that may be a little bigger than it needs to be for that retailer or it is occupied currently by the type of user that does not need access to foot traffic to be successful. Those businesses or endeavors may be very valid for the community, but they do not necessarily have to be in those front and center retail spaces on Loockerman and in other places. He noted they could take some of that inventory and distill it to those spaces that they would really like to see some action on and take these categories of goods and services, meet with those property owners, and start sharing this information so that they feel like they have options when they look out into the market

ECONOMIC DEVELOPMENT COMMITTEE MEETING OF FEBRUARY 11, 2020 PAGE 5 to tenant their properties. He noted that is how he envisions this helping from a implementation standpoint. Mr. Hugg noted they are accustom of thinking Dover is a little bit less than 40,000 people and they are expected to grow by a percent or two a year, but looking at the drive time distances in 30 minutes of the City of Dover, there is 190,000 people and that changes their perspective. He stated that is what they need to be focusing on, that their market is not just their boundaries. He stated it may be where they want the activity to locate, but there is a bunch of people within 30 minutes of the City of Dover. Mr. Hugg noted that looking at growth numbers, even from 2020 to 2025, they are going to grow somewhere between 3% and 5.5% in that period in that 10, 20, and 30-minute growth zone. Mr. Hugg noted that they are starting to get some information that is going to help them target a little bit and encourage this regional look. He complimented Ms. Parkowski, even though it is out of City limits, she brought 150 jobs to the City's doorstep that are as much of a benefit to the City of Dover as if they had been on Loockerman Street. Responding to Mr. Hugg, Mr. Ferrell spoke about income related information. Mr. Ferrell noted there are two flavors of retailers, one is more sophisticated that have multiple units and really understand the metrics of success for their business. Mr. Ferrell stated Wawa knows how many traffic counts they want, there are certain metrics they hone in on very quickly and clearly. He noted most retailers look at two things as preliminary threshold issues: what the access to population in a market is and what the buying power of that population is and what their spending power is. Mr. Ferrell advise they typically look at median or average household incomes and when looking at the 10, 20, and 30-minute drive times from the downtown what they see is very strong. He clarified when he says strong he means exceeding State averages for income. He stated it is a lot of customers with some affluence and spending power, which is what a lot of those goods and retail service providers are looking for. They typically have a more sophisticated site selection criteria and know that stuff about themselves and the markets that they want to go to. Mr. Ferrell stated Dover would stack up very well in a lot of conversations with people that need access to affluence and population, because of those drive times, which will mean more to some types of goods and service providers than others. Mr. Ferrell noted that when they use this data and look at the access to customers, there are some businesses that have a greater capacity to inconvenience a potential customer when they locate in certain markets that are easy to get to. He stated at the ICSC Conference there are a lot of things right now changing in the market and it is very fluid right now. Mr. Ferrell stated in 2019 there were 9,200 plus store closings in the retail world, some of the household names that they all know are leaving the market forever. Mr. Ferrell noted that there is an enormous amount of merger and consolidation activities that occur after every calendar year in the first quarter of the next year, like they are experiencing now, but it is even more heightened than it has been historically. He noted that historically, what they have seen is some of those big box players are out there with those site selection criteria, choosing places like corridors with big setbacks and parking fields that accommodate lots of customers. Those folks who used to take the market share from our downtown and, in fact, some decimated our market share in the downtown

ECONOMIC DEVELOPMENT COMMITTEE MEETING OF FEBRUARY 11, 2020 PAGE 6 because we started going to those more spread out places where parking was abundant and buying those goods and services. Mr. Ferrell stated that when experience and something that makes you more committed to it is happening, which can only happen in authentic downtown settings like downtown Dover, those are going to be opportunities that this kind of data will help flesh out. Mr. Ferrell stated categorically, they can talk about the hole in the market, as an example, there is a big hole since Atlantic Books left, that has never really been refilled. The only refill for Atlantic leaving the Dover market was on the e-commerce side. People either drove to another place to get it, or they simply ordered it online, but if a place like Acorn Books were to come back in a more local setting with things that are experiential, consumers are excited about that. He noted that they can almost take every category and find out how to make it an experience. Mr. Ferrell noted that the challenge for people using this data is to find where those opportunities are and monetize them. Ms. Laird stated they would be remiss if they did not recognize that a lot of the downtown vacant spaces are not ready to be leased and so they need to prospect simultaneously with readying buildings, getting building owners somehow in shape to get the buildings ready to get them leased. She advised if they are leased upstairs and not leased downstairs, they have to change some ordinances, or do something to get them off the dime because they will continue to see these vacancies. She stated they have property people and business owners lining up. She advised that is a serious conversation they have been having with Unlock the Block, and it is going to need to continue to happen until they can get them off the dime. Mr. Ferrell agreed with Ms. Laird and stated that is a reality here and in other markets. He noted that a close cousin to that is the activities they may want to pursue legislatively and from a lobbying standpoint some of the economic obstacles that are happening. He stated whether it is downtown or in the corridor it has to be conveyed to our legislators so that they know. Mr. Ferrell advised that some of the things they are experiencing are barriers to entry, and that information has to get back to the legislators that can help them and have the tools to go out there and use incentives like the DDD, or the incentives the City has made available to attract businesses. Mr. Hugg noted that all of this work is focusing on three or four items. He stated the first is who do they talk to and who do they reach out to. He complimented Mayor Christiansen on being very good at picking the phone up when Mr. Hugg tells him that someone has expressed an interest. He noted that Mayor Christiansen will call them and tell them why they need to be in Dover, but that is after the fact and reactive, it is not really proactive. Mr. Hugg stated understanding better who they talked to is one of the key things they are trying to do, but every day he is bumped up against some regulatory issue, where because of zoning or parking restrictions or alcoholic beverage control, they are not keeping, not adapting, and not recognizing those properties like Ms. Adams'. He noted that those are going to create real challenges for them because they are not going to be the old traditional fill in the gap and plug somebody into a storefront. Mr. Hugg advised that they are going to be mixes of uses, different classes of activity, different times of day and other kinds of stuff that they need to be thinking about. He stated they need both what opportunity it offers, but also what kind of obstacles it offers and then they need to think through all of the things, aesthetics and accessibility. Mr. Hugg stated all of this research is beginning to help them get a handle on it.

ECONOMIC DEVELOPMENT COMMITTEE MEETING OF FEBRUARY 11, 2020 PAGE 7 Economic Review 2019 Mr. Hugg stated two things will be coming out within the next month or so. He noted the agenda should say Economic Review 2019 and 2020. Mr. Hugg stated the first will be the Department of Planning and Inspections Annual Report which will give them a lot of information of what happened in Dover last year, who came, what did they build, where did they locate, those kinds of things. He is hoping that as they get better at looking at some of that information, they can start to draw some trends and conclusions. Mr. Hugg noted another important thing is it is time again for the Kent County Annual Report/Economic Report or now the Choose Central Delaware resource guide. He was not sure of the official title, but the challenge for the City of Dover this year is that they have up to four pages to really tell their story to the people who are interested in choosing Central Delaware. He noted that with Mrs. Kay Sass, Public Affairs and Emergency Management Coordinator, they have been working on trying to come up with what is the story they want to tell and how do they get people's attention in a four page fold out. He noted that it is scheduled to come out this spring, so there are things happening in their promotion and marketing world as well that will be important. Responding to Mr. Hugg's comments regarding the jobs brought to Dover's doorstep, Ms. Parkowski noted they have a small to medium manufacturer that is going to go into the Dover Post building, and they are going to be bringing over probably 50 jobs with them and they just met with Department of Labor today. She stated they have signed their agreement of sale and that there were Post employees that will be staying. Ms. Parkowski stated Rockport said they have to have quality of life and in Kent County, Dover is the gem and they need a vibrant downtown in order for them to really project that they have great quality of life. Referring to Mr. Ferrell's example of a tavern license, Ms. Parkowski noted they have dealt with this with the brewpubs. Ms. Parkowski stated if you are an owner of a brewpub, you can only own three in Delaware right now. She stated they need to adapt and change. It is 2020, let us make it a vibrant downtown. Mrs. Mitchell moved for adjournment, seconded by Ms. Laird and unanimously carried. Meeting adjourned at 5:24 p.m. Robin R. Christiansen Chairman RRC/jt S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\Committee-Minutes\2020\02-11-2020 EDC Minutes.wpd Attachments Attachment #1 - A Map titled “Commercial Retail Hot Spots in the City of Dover, DE”

ATTACHMENT #1 Commercial Retail Hot Spots in the City of Dover, DE Economic Development Committee Meeting of 02/11/2020 0 2,500 5,000 Feet LEGEND Dover Boundary ¯ Water Bodies Zone 1 Hydrology Roads Commercial Hot Spots Zone 1 - N. Route 13 Zone 2 - Central Corridor Zone 3 - Bay Road Zone 4 - Route 8 Zone 5 - Downtown Zone 2 Text * Zones outlined in red are generalizaions and not intended to depict specific parcels. Zone 4 Zone 5 February 2020 0 10,000 20,000 Feet Zone 3 Inset Map PAPER MAP DISCLAIMER: By acceptance of this map material you agree to the following: This map material is made available by the City of Dover, Delaware as a public service. The material is for reference purposes only, and the City makes no warranty, re presentation, or guaranty as to the accuracy of the material, including its accuracy, availability, use, and misuse. In no event shall the City be liable for any direct or indirect damages suffered by the Recipient or others arising from any inadequacies of the digital data or the Recipient's use of this data. The material is in the public domain and may be copied without permission. Citation to the source would be appreciated. Any errors or omissions in the material should be reported to the City of Dover, Delaware's Public Works GIS Division.