rv 2014: riders, revenue and rubbish- managing concessions and making money by lorna moritz
DESCRIPTION
Riders + Revenue = Rubbish: Managing Concessions and Making Money Riders are coming to our stations, anyway. Can we make some money off them? Capturing the value of a transit investment can take many forms. Is providing concessions and services a good way to generate a meaningful income? Or just another way to provide amenities for transit riders? Vending machines or specialty retail? Hear from our panel about what it takes to develop a successful program -- from impediments, to thresholds needed to support certain uses, to who picks up the fast food garbage on the train. Advice, lessons and time for discussion. Moderator: Theresa O'Donnell, AICP, Acting Assistant City Manager, City of Dallas, Texas Jason Ward, Manager, Joint Development, Metropolitan Atlanta Rapid Transportation Authority, Atlanta, Georgia Zahoor Kareem, President, Blinq, a Transmart Company, San Francisco, California Lorna Moritz, President, TR Advisors LLC, Boston, MassachusettsTRANSCRIPT
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Retail Concessions on Transit Properties
Speaker: Lorna Moritz, TRA President | 617.502.1418 | [email protected]
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Transit Retail Myths • Transit retail will solve your budget problems • ATMs are security problems • Cost of trash collection outweighs revenues • Tenant mix is impossible to control given the
public bid process • It’s not worth it --- it depends….
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Pros • Provides goods and services wanted by transit riders • Provides convenience for transit riders • Creates non-fare revenue for transit agency • Provide opportunities for economic development • Provides opportunities for minority owned or other
small businesses • Provides additional eyes within the station for security
(“See something – Say Something”)
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Cons • Creates additional trash in the station areas and on
trains • Certain types of businesses are management intensive • Poorly planned retail spaces can result in vacant and
unused space • Creates new management issues that require the
attention of the agency – you’re the landlord now! • If not properly executed revenues may not provide
expected returns
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Access, Access, Access! Program approach and success differs based upon station design
– Subway • Soot, fumes, vibration • Requires high traffic counts
– Elevated • Consider load factors • Under-El presents potential leakage problems
– Concourse • Helps traffic flows to platforms • Easier retrofits
– Regional Multi-Modal Centers • Higher traffic • Longer dwell times • Neighboring community access
– Commuter Rail Depot • Business limited to peak times
– Beyond the turn style • Operating challenges for deliveries • Requires high traffic counts • Vending and ATMs
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Subway In the subway or at the street level entrance:
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Elevated • Track Bed Leakage Issues • Noise and Vibration • Street Access • Connected to Neighborhood
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Concourse • Cleaner & brighter • More dwell time • More potential space
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Regional Multimodal Centers
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Commuter Rail Depots • Self contained • Peak hours • Village center
connections
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Beyond the Turnstyle • Operating Issues
– Deliveries and trash removal – Queueing space – Noise, vibration, fumes, soot – Security – Vending
& ATMS
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Developing a New Program • Master developer • Direct lease • DBE requirements • Fixed spaces vs kiosk or
pushcart • Popup stores & food
trucks – Trial program – Seasonal Opportunities
• Management – Staffing – Technology
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Designing Retail into Station Plans • New stations • Modernization programs • Retrofitting existing stations for retail • Don’t forget need for power, water, & sewer!
Shiny new but no power or water! Tucked out of sight, out of mind!
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The Kiosk Option • Lower capex, high quality, movable.
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Pushcart Programs • Lower entry cost: ~$10,000 • Higher management involvement • DBE opportunity • Community Involvement • Storage
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Financing a New Program • $500-800 per foot in stations for fixed space • $10-$100,000 for kiosks • $10,000 for pushcart • Modular construction • Developer paid program – give up 35-50% of
revenues towards capital costs – 20 + years – Incentives for options – Aligning of interests at the end of the term
• Tenant paid single locations build out – evaluate required build out to determine term
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Hierarchy of Revenues per SF • ATMs • Branded Coffee (e.g. Dunkin
Donuts) • Branded Food & Beverage • Non-branded coffee/food
and beverage/news stands/sundries
• Specialty Vending e.g. Red Box • Beverage Vending • Snack Vending • The Exceptions
– Allowing Lotto, Cigarettes and Alcohol