Notice from the author

Please read the page Project Two (selected from the tabs above) before returning to this page to read the rest of the project. I apologize for the inconvenience - I need to take a class on blogging it seems. Thank you.

Site Analysis – Part Two

The following site information comes from the Dairy Queen website in the information provided for potential franchisees.

General Criteria for a DQ Grill & Chill Restaurant Site:

DQ Grill & Chill Core 46 Model Building

Minimum Lot Size:	20,952 Square Feet with 105' Frontage
Building Size:	1,886 Square Feet
Parking:	Minimum of 30 Parking Spaces
Traffic Count Minimum:	20,000 Daily Average
Employees:	5,000 (3 minute drive-time)
Median Household Income:	Minimum of $35,000
DQ Grill & Chill® Image:	Logos, building design and materials allowed
Drive-Thru:	Site can acquire drive-thru zoning approval

The selected site has a 2,898 square foot building sitting on the Southeast corner of the 26,136 square foot lot. The project site substantially fits the standard site criteria listed above. The site also meets the following “other factors considered” for site selection listed on the DQ website.

• Traffic for all critical day parts (lunch, afternoon treat, dinner, evening treat)

• Corner locations or locations with great visibility and easy ingress/egress

• Close proximity to traffic generators and retail 

Financial Analysis – Part Two

After contacting American Dairy Queen’s Development Teams the developer (me) has decided not to be an owner/operator of the location, however, the Development Team shared the site analysis conducted for project one with existing and prospective franchisees interested in opening a store in the Bedford area. Working with Development Team proved fruitful and has secured a green ground lease with an existing franchisee – a lease overview is below. The lease provides for a twenty-year initial term and two five-year renewal options; a duration that coincides with the terms of a DQ Grill & Chill franchise. Since the improvements will revert to the landlord at the end of the lease the developer has included “green” provisions in the rental agreement to act as a hedge against future demands including increasing energy costs and the market’s mounting preference towards sustainable properties. The tenant has agreed these terms because they positively affect his bottom-line with better private financing options and projected reductions in annual operating expenses. These terms also appeal to his social conscience. 

Revised financing estimates for the developer are displayed below. The newly calculated required minimum net operating income is $40,250. The lease overview above shows that the property will be profitable for the developer with return of equity occurring early into the second year. 

Cost-Benefit Analysis

This analysis should serve as supplemental marketing material used to attract tenants by highlighting the tenant-specific benefits.

Sustainable Features:

The green ground lease in place has landlord requirements for design approval and mandates the following sustainable features be included in proposal:

1. Recycle materials from demolition of the existing structure and new construction. 

          Source: http://constructionwaste.sustainablesources.com/
2.  Cool roof design 

          Source: http://www.pge.com/includes/docs/pdfs/shared/saveenergymoney/rebates/remodeling/coolroof/coolroofdesignbrief.pdf

3. Ground source (also known as geothermal) heat pump Heating, Ventilation and Air-Conditioning (HVAC) system.

          Source: http://www.energysavers.gov/your_home/space_heating_cooling/index.cfm/mytopic=12640 

          Source: http://www.energystar.gov/index.cfm?fuseaction=find_a_product.showProductGroup&pgw_code=HP 

          Source: http://www1.eere.energy.gov/geothermal/heatpumps.html

Cost-Benefit Analysis by Feature:

The lease provision states that best efforts must be made to recycle materials from both the demolition of the existing structure and any waste produced during construction of the new building. Recycling construction materials:

Definition: “Construction waste recycling is the separation and recycling of recoverable waste materials generated during construction and remodeling. Packaging, new material scraps and old materials and debris all constitute potentially recoverable materials. In renovation, appliances, masonry materials, doors and windows are recyclable.”

According to research, “The most important step for recycling of construction waste is on-site separation. Initially, this will take some extra effort and training of construction personnel. Once separation habits are established, on-site separation can be done at little or no additional cost.” Therefore the landlord requires contracting with a service provider with established procedures and ample experience in recycling construction waste and on-site separation of materials in order to preserve the maximum amount of reusable resources. Joining with a tested professional will reduce the risks of increased development costs and help ensure quality workmanship.

Potential benefits realized by the tenant include:

• ·        Tax deductions if donations are made to non-profit organizations specializing in recycling construction materials.
• ·        Cost savings through the planning process – promoting efficient design, minimizing waste during new construction and a reducing new supply purchases.
• ·        Good-neighbor credits with the business’s future customers as recycling efforts are widely perceived as environmentally responsible.

Cool roof design:

The cool roof design lease provision is aimed at reducing the energy load from the Heating, Ventilation and Air-Conditioning (HVAC) system.

Definition: “Cool roofing is defined by the radiative properties known as solar reflectance and thermal emittance.”

The cost of the cool roof design will be dependent on the selected roofing materials. These materials also impact the effectiveness of the roof so it’s important, again, to work with experts to ensure top quality construction and therefore receive the maximum benefits from incorporating it in the structure (and lease). In California, where  high energy performance standards are regulated, property owners are finding “cool roofing is often the least expensive option” to achieve those goals. “The cost of cool single-ply roofing is between $1.50 and $3.00 per square foot. The cost of cool coatings is between $0.75 and $1.50 per square foot. These costs include materials, installation, and basic preparation. The incremental cost of adding a cool roof coating to a traditional roof is less than $0.20 per square foot.”

According to research, “Unlike conventional roofs, cool roofs stay at or near ambient temperatures even on the hottest summer day.” Cool roofing reducing the amount of heat flowing through a building’s roof and into the space below, which in-turn reduces the HVAC load and energy costs. “Studies show cool roofs can typically reduce summer air-conditioning energy use by 10% - 20%.” If the cool roof meets or exceeds expectations, the reduced load also can permit downsized equipment needs (initial capital expenditures).

Potential benefits realized by the tenant include:

• ·        Energy and demand savings – as stated above, the expected reduction in energy usage is between 10% and 20%. The research sites a field test with a reduction of 38% and notes that electrical savings are the greatest in hot and sunny locations, like Texas.
• ·        Maintenance expense savings through reduced thermal cycling (roof temperature fluctuations) which extends the life of the roof past that of typical roofing. The maintenance to the HVAC system is also expected to less due to the smaller energy load and downsizing of equipment.
• ·        More good-neighbor credits through positive environmental impacts. Cool roofs transfer less heat to the ambient environment, “the resulting lower outdoor air temperatures can slow urban smog formation. Simulations predict a reduction in ozone of 10%-20% resulting from a three to four degree Fahrenheit cooling in ambient temperature.” Additionally, the drop in energy demand translates into reduced carbon-dioxide and other undesirable emissions.

Ground source heat pump HVAC system:

As with the cool roof design, the geothermal heat pump lease stipulation aims at reducing the energy load on the HVAC system and thereby realize monetary gains from the costs savings. The lease states that the installed heat pump must be an ENERGY STAR qualified model to ensure annual energy savings.

Definition: “Geothermal heat pumps (GHP) use the constant temperature of the earth as the exchange medium instead of the outside air temperature….depending on latitude, ground temperatures range from 45 to 75 degrees Fahrenheit. Like a cave, this ground temperature is warmer than the air above it during the winder and cooler than the air in the summer. The GHP takes advantage of this by exchanging heat with the earth through a ground heat exchanger.”

The Geothermal heat pumps do costs quite a bit more than their traditional counterparts, however the savings do provide a return on investment. According to research, “even though the installation price of a geothermal system can be several times that of an air-source system of the same heating and cooling capacity, the additional costs are returned to you in energy saving is five to ten years.”

Potential benefits realized by the tenant include:

• ·        ENERGY STAR qualified models are over 45% more energy efficient than federal minimum standards for energy efficiency.
• ·        Possible tax credits
• ·        “The benefit of ground source heat pumps is they concentrate naturally existing heat, rather than by producing heat through the combustion of fossil fuels.”
• ·        ”Lower operating and maintenance costs, durability, and energy conservation make Ground Source Heat Pumps the smart choice for commercial applications”
• ·        “Simultaneously heat & cool different parts of the same building
• ·        Very quiet--users do not know when the system is operating
• ·        Can be set up in multiple zones, with each zone having an individual room control
• ·        Greater freedoms in building design due to 50-80% less mechanical room space
• ·        No outside equipment to hide, eliminating vandalism and roof top units
• ·        Pipes have 50-year life expectancy
• ·        All electric, which eliminates multiple utility services
• ·        Expel boiler and chiller maintenance
• ·        Ground heat exchanger is maintenance free and will last 40+ years”

Plus these other “great savings:

• ·        Very competitive on initial costs and lower lifecycle costs than most HVAC systems.
• ·        Savings of 25-50% on energy consumption
• ·        Lower peak demand, lowering your operating costs
• ·        Water heated with waste heat from air conditioning at no cost in the summer and at substantial savings in the winter
• ·        Some utilities offer rebates or incentives to their customers who purchase GSHPs
• ·        Conserve natural resources by providing efficient climate control and thus lowering emissions
• ·        Minimize ozone layer destruction by using sealed refrigeration systems, which seldom or never have to be recharged
• ·        Use underground loops to transfer heat, with no external venting and no air pollution
• ·        Very energy efficient, with the earth providing over 70% of the energy required to heat and cool“

Project One – Feasibility Study

Conduct a feasibility study on a development project – new construction or renovation – big or small. One stipulation, the project must be “different” in that it’s not apartments, office or industrial. Examples of possible subjects are hotels, mixed-use, entertainment, or special use.

Project Selection:

As discussed in class, development can take place by finding a site to fit a purpose or, vice versa, finding a purpose to fit the site. In this case I did the latter and selected a vacant property located near my home. I asked myself, “if this were my property what would I want to do with it?” After agonizing over the answer (too many options) I realized I’m in a unique position to pick a purpose in that I live in the area. So I changed my point of view from developer to citizen – “what do I WANT to be there?” Then the answers came fairly easy and I narrowed it to, "I want an ice cream shop." At the present time, when we want ice cream we have to drive a distance that prohibits us from bringing the ice cream back home to enjoy. That being decided, I consider the site too large to support a simple ice cream shop so my mind turned to Braum’s Ice Cream and Dairy Stores. In addition to a large selection of ice products, Braum’s stores also serve a basic grill menu including hamburgers and chicken sandwiches. Braum’s can also answer to a niche here of people that prefer a small market environment over the big box grocer across the street.  The existing building should be demolished and new construction take place to make room for a drive-thru service lane around the back of the building.


So, is it feasible to put a Braum's Ice Cream and Dairy Store at this location? Let's find out...

Company Description:

"Ice cream means cold cash for Braum's. W. H. Braum operates a chain of about 280 Braum's Ice Cream and Dairy Stores in Oklahoma, Texas, and a handful of other states. Popular for its ice cream and other frozen treats, the chain also serves breakfast items, sandwiches, and salads. In addition, the stores sell grocery items such as milk, cheese, and other dairy products, along with baked goods. The family-owned company has more than 10,000 dairy cows and grows its own cattle feed. Family patriarch Henry Braum started the business in 1933, opening a chain of Peter Pan ice cream stores in Kansas during the 1950s. His son Bill later took over the business, sold the stores, and started his own retail chain in 1968." 

Source: wwwhoovers.com

Vision Photos:

Selected Location

Existing Braum's Location in Euless, Texas

Site Analysis

The subject property is at 2820 Central Drive in Bedford, Texas. The property sits on the Southeast corner of two main streets, Harwood Road and Central Drive.

Size and Configuration:

The building itself is 2,898 square feet and sits on the Southeast corner of the 26,136 square foot lot. The opposing Northwest corner of the site holds the largest green space on the site. There are also small strips of grass and landscaping running partially behind the building and along the streets. There is storefront parking marked along the North and West sides of the building, however, the site is predominately paved and could also be striped and configured as a parking lot. The building formally was home to a 7-Eleven gas station and convenience store leading to the assumption that the interior is largely an open slate.


Franchise information available on the website for Dairy Queen, a competitor, states, "The typical DQ Grill & Chill® restaurant is a freestanding facility between 1,886 and 2,612 square feet, depending on the building option that you select. Land can be purchased or leased, and the average site requires between 20,952 and 29,670 square feet , depending upon site conditions and building size. " Braum's stores can be expected to have similar requirements and the subject property does meet these standards.

Accessibility and Visibility:

The site has two driveway entrances, one on each cross street; both are easily accessible by right-turn. Central also has a left turn lane that provides access to that entrance from the North. Access from the East requires a U-turn.  The Southern and Eastern (or the two non-street facing) sides of the building face the Bedford Meadows shopping center and a Chase bank – there is no shared parking lot access between the site and these businesses.  Visibility is high from all approaching directions. The Northwest corner is practically the only green space on the site and is ideal for driver-eyelevel signage, which is common in the area, or a much taller pylon sign. According to data provided by the seller the traffic counts in 2010 on Harwood Road and Central Drive was 17,740 and 15,890 vehicles per day respectively.

Usage – Site and Surrounding:

The site is now vacant; it last housed a 7-Eleven gas station and convenience store. Sales material suggests restaurant, retail or medical uses. Neighboring businesses include Chase bank, Kwik-Kar automotive service center, CVS Pharmacy, Conoco gas station, Kroger grocery store, Big Lots retail store, and many other small retail and dining establishments. No other ice cream shops are in the immediate area. The site is also surrounded by various residential developments from affordable apartments to luxury single family dwellings.

Photos and Promotional Material:

Regulatory Analysis

Statutory Restriction:

The property is currently zoned commercial and classified as retail by the Tarrant Appraisal District. The zoning map for the City of Bedford is below.

In conjunction with zoning, the City of Bedford also has a Comprehensive Land Use Plan that affects the project site. While this plan is not the same as zoning it does give insight into the city’s goals and what they will use their zoning powers to achieve. Fortunately, the site is already compatible with the established objectives in the area. The site is in a Commercial Focus area, as shown in purple on the map below (from the City of Bedford Comprehensive Land Use Plan).



The city wants commercial development to have the primary elements of commercial corridors or commercial nodes as described in the plan and shown below:

Commercial Corridor

·        Depth should be restricted to not more than 300 feet and not less than 150 feet.

·        Parking lot interiors and perimeters should be landscaped to screen automobiles and break-up large areas of pavement.

·        Access to commercial property should not encroach into residential neighborhoods. Primary access is directly from arterial streets.

·        Buffering between single family and commercial uses may consist of landscaping, and/or solid walls. In addition, dumpsters and mechanical equipment areas should be screened.

·        Corridor development should orient traffic toward arterial streets and discourage entry to residential neighborhoods.

Commercial Node

·        Depth should be restricted to not more than 300 feet and not less than 150 feet.

·        Parking lot interiors and perimeters should be landscaped to screen automobiles and break-up large areas of pavement.

·        Access to commercial property should not encroach into residential neighborhoods. Primary access is directly from arterial streets.

·        Buffering between single family and commercial uses may consist of landscaping, and/or solid walls. In addition, dumpsters and mechanical equipment areas should be screened.

·        Corridor development should orient traffic toward arterial streets and discourage entry to residential neighborhoods.

The City of Bedford also has a Sign Ordinance. Below is a relevant section from this ordinance showing the restrictions in place for permanent signage on this site. A Braum’s store at this location has the potential to use all the sign types listed excluding Freestanding Freeway Pole. Here is a link to the ordinance in its entirety.   

http://www.bedfordtx.gov/development/files/2011/zoning/Sign%20Ordinance%20Cover%20sheet.pdf