Commercial Development: Market Characteristics
For the purposes of study, Downtown Baton Rouge has been defined as approximately one square mile, bordered by the Mississippi River, two Interstates and the State Capitol complex.
Trade
There are three trade areas that should be served by a vibrant retail/restaurant/entertainment district located in Downtown Baton Rouge. The primary, secondary and tertiary trade areas of Downtown Baton Rouge are defined as 1 mile, 5 mile and 14 mile sectors respectively.
• Primary Trade Area The primary trade area is defined as Downtown Baton Rouge. The residential population for the primary trade area is estimated at only 2,000 persons. However, the worker population drives the market potential for the primary trade area. There are an estimated 17,000 permanent workers located in Downtown Baton Rouge. According to the City of Baton Rouge, an additional 100,000 visitors conduct business on a daily basis in Downtown. Plans for new residential developments in Downtown will increase the population level by approximately 2,000 persons. Our forecasts and recommendations anticipate this population increase. The median household income of the primary trade area resident is estimated at a low income level of only $17,300. We expect this income level to increase with the development of the anticipated new housing. [There are three multi-family residential projects being considered currently.]
• Secondary Trade Area The secondary trade area is roughly defined as the remainder of the City of Baton Rouge and the area just west of the Mississippi River. The boundaries are approximately defined as Airline Highway to the east, Ryan Field to the north, Louisiana State University to the south and Route 415 to the west. As with the primary trade area, the secondary trade area residents tend to be lower income, with a median household income estimated at $22,000. There are approximately 111,700 persons who live within this trade area. This population level is expected to decline through the year 2002.
• Tertiary Trade Area The tertiary trade area is defined as the remainder of metropolitan Baton Rouge. The consumer base that Downtown must attract resides within the tertiary trade area. The tertiary trade area has a population of approximately 312,000 persons and is expected to increase to nearly 341,000 persons by the year 2002. Unlike the primary and secondary trade areas, the tertiary
trade area has considerable wealth. The median household income is estimated at $43,000, or nearly fifty percent higher then the state average of $21,949 (1991 US Census Data).
Customer Segments
Downtown Baton Rouge has the opportunity to serve distinct and significant customer segments. These customer segments are 1) Worker Population, 2) Residential Population and 3) Tourist / Visitor Population.
• Worker Population The worker population base located in Downtown Baton Rouge is significant. There is a very large concentration of white-collar employees who work permanently in Downtown Baton Rouge. Most of these are employed by the State Capitol and ancillary businesses, such as legal services. As mentioned, there are an estimated 17,000 employees working in Downtown Baton Rouge, and an additional 100,000 persons who conduct business in the Downtown area on a daily basis.
[There are 20,000 downtown employees om 2001.]
• Residential Population With an appropriate critical mass of retail and restaurant establishments in Downtown, we would anticipate an expansive trade area. As such, we have defined a total trade area that encompasses most of Metropolitan Baton Rouge. The total trade area (primary, secondary and tertiary trade areas combined) population is estimated at 390,650 persons. It is the tertiary trade area that offers the greatest potential in terms of retail sales for Downtown Baton Rouge.
• Tourist/Visitor Population The Belle of Baton Rouge Casino and Casino Rouge attract approximately 1.3 million persons per year to Downtown Baton Rouge. However, many of these people are visiting only the casinos and nothing else. With a better mix of retail tenants, the Downtown will convert some of these visitors into shoppers, but the conversion rate will not be high. The casino is a self-contained operation designed to keep people gambling, not shopping elsewhere.
[Belle of Baton Rouge is now Argosy Casino. Admission fees collected by the city indicate that approximately 1.2 million patrons visit each casino annually.]
• Competition Although Downtown Baton Rouge has three distinct consumer segments, it faces relatively strong and strengthening competition. In particular, the new Mall of Louisiana attracts the entire Baton Rouge market. Additional retail along the Interstate 10 and Airline Highway corridors also competes with Downtown. Currently, these locations are outpacing the Downtown largely by default. Given the limited amount and quality of retail located in Downtown Baton Rouge, consumers do not have much of an alternative to shopping in these suburban centers.