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

Market Analysis

The subject property is in Bedford, Texas. According to the city, 97% of its land area is developed. This creates a “build-out scenario” where maximum development has been reached and new development will focus on improvements and redevelopment of existing land use.

Demographics:

The total population in Bedford is just shy of 50,000. The following graphics, from city-data.com, show a few relevant statistics and are representative of the market around the subject property.

The city is considered a bedroom community in that approximately 50% of the population works outside the city. The Comprehensive Land Use Plan Survey states “the nonresidential land uses located in the City of Bedford provide a significant work force base located within the city limits.” It also notes that the North Central Texas Council of Governments “estimates the work force available to support commerce and industry to be approximately 25,594 persons.” This all means that while half of the people leave the city for work, other people are coming into the city to work. The subject property lies at the intersection of two major arterial roads, Harwood Road and Central Drive. The capture rate at this location is expected to be significant. The following thoroughfare map shows traffic flows in the city and around the subject property.

Competition:

The Goggle Map below is centered on the subject property, indicated by a purple marker, and displays the results yielded from a search for "ice cream" in the area – note that some of these establishments, like Bedford Snoball (indicated by marker “D”), are not pure competitors in the market because the products differ (shaved ice v. ice cream and grill). Bedford Snoball is also only open in warmer months, whereas, a Braum’s store is open year-round. There are two other Braum’s stores serving the area (markers “G” and “C”); both are about five miles (to the Southeast or to the Northwest) from the subject property and each takes approximately ten minutes to reach by car. The close proximity to existing locations is the only barrier to entering this market. Braum's does not franchise - all locations are owned and operated by the Braum family. This corporate policy bodes in favor of the subject site because all locations are corporate-run stores therefore there are no franchise protection restrictions to contend with. 

Possible competition as shown on the map:

“A” – Rita’s Frozen Ice and Custard

“B” – Baskin-Robbins

“E” – Yogurt Story

Finance Analysis

Assume a purchase the subject property for a negotiated price less than market price, according to Tarrant Appraisal District tax records, based on demolition of existing building and the fact that the property has been unused for a number of years since being vacated by the 7-Eleven. The new development under consideration, a Braum's Ice Cream and Dairy Store, will be new construction of a 2,600 square foot structure on the existing site. The following spreadsheet estimates development and financing costs based on web-based research from various sources including, Braum’s, Dairy Queen, Bank of America and Capital Funding of America. Unable to locate reliable data for income and expenses of a typical ice cream/quick serve restaurant, the analysis stops short of considering the profitability of a Braum’s store at this location. However, it is a safe assumption that an established business, such as Braum’s, would have no problem turning a profit under these favorable circumstances.     

                                                         

Estimates:

Reference - Tarrant Appraisal District: