Lake Oswego Retail Market Analysis &
Business Development Plan
9220 SW Barbur Boulevard
Portland, Oregon 97219
II. Business Outreach ................................3
III. Commercial Assessment ....................7
IV. Retail Market Analysis ..................... 13
V. Business Mix........................................ 22
VI. Business Development Strategy .... 34
Appendices ........................................... 50
The purpose of the Lake Oswego Retail Market Analysis is to identify business
opportunities and help develop marketing strategies that will ultimately attract
more small business and bring customers in the doors of local retailers. This
project supports 2009 Lake Oswego City Council Economic Development goals
to promote prosperity and vibrancy in Lake Oswego’s business community. This
effort is focused on business development in the near term (next 3 years)
recognizing that no one is able to forecast the timing and nature of a market
recovery and new commercial/mixed use development proposed for
A separate but related Marketek assignment is the Lake Grove Market Analysis,
funded by the Clackamas County Main Street Program. Key results particularly
related to retail market areas and the statistical analysis are incorporated into
this report where appropriate. The main findings of the Lake Grove study which
is nearing completion will appear as an Appendix to this document.
The goals of this multifaceted analysis are to:
• Create an accurate and realistic picture of Lake Oswego’s retail potential
within the marketplace, including characterization of existing retail supply,
consumer preferences, needs and buying patterns and opportunities and
challenges for growth and development;
• Develop a desired business mix based on existing market gaps and future
• Create a retail strategy and business development plan to enhance Lake
Oswego's business base and destination as a quality shopping and dining
• Contribute to the creation of a clear, unifying brand identity for Lake Oswego
overall and market position for the city's main shopping districts: Lake Grove
As Lake Oswego’s retail expansion efforts will be implemented over time, the
market analysis considers a ten-year time period from 2009 to 2019, which is a
realistic projection period for retail development. Research (both primary and
• Statistical estimates of potential supportable retail space
• In-store visits/assessments to retailers and restaurants
• Interviews/focus groups with local business and community leaders
• Multiple site visits to Lake Oswego’s four main shopping areas: Downtown,
Lake Grove, Mountain Park and Palisades
• Business inventory and mapping of key shopping centers
• Demographic analysis of Lake Oswego market area
Lake Oswego Market Analysis & Business Development Plan ♦ Introduction 2
As part of the market analysis process, Marketek sought to understand and
characterize the existing business base of Lake Oswego retailers and restaurants.
The steps in this effort were to conduct in-store visits throughout Lake Oswego
during the months of July and August and two business owner focus groups.
Marketek conducted a generalized assessment of approximately 60 businesses
based on a variety of factors including merchandise quality/pricing, exterior
building condition, quality of customer service, merchandising, and
food/beverage quality and cleanliness.
Although the existing retail base is relatively small, the dominant merchandise
type is women’s apparel.
Retailer price points are oriented to middle and upper income shoppers with an
estimated minimum average sale of $75-$100.
Retailers’ strengths include customer service, merchandise quality, selection and
store cleanliness. With very few exceptions, store staff provided
excellent/appropriate customer attention and an eagerness to please.
Top improvement needs for retailers are store signage, window displays and
lighting with several instances of inappropriate front window signs with hand
lettering and/or conveying a cluttered appearance.
Restaurant/dining offerings vary widely in cuisine and price in both Lake Grove
and Downtown Lake Oswego with Mountain Park and Palisades having more
Downtown Lake Oswego emphasizes unique casual and semi-formal dining
establishments oriented to middle and upper income target markets. Oswego
Village is an exception with more quick/fast food dining choices than other
Lake Grove has a wide selection of dining choices with generally lower price
points than Downtown Lake Oswego and therefore, greater appeal to a
younger, family market.
In general, restaurants provide solid service, quality food and are adequately
clean. A few older, long established businesses could benefit from sign and
landscape upgrades and freshening/changing-up interiors.
Marketek conducted two business focus groups, (July 24 and August 6) to gain
insight to the Lake Oswego business climate, the retail trade area, issues and
Lake Oswego Market Analysis & Business Development Plan ♦ Business Outreach 4
opportunities related to identity and image and community/business district
marketing efforts. The results are highlighted below.
A. Lake Oswego Business Climate
Business owners regard Lake Oswego as a highly unique community, perhaps the
most beautiful in the state, particularly the downtown business district.
“Lake Oswego is beautiful. The streetscape is outstanding. There is not any place
in Oregon that looks like this.”
While businesses appreciate the high quality public amenities provided by city
government, the prevailing sentiment of business owners is that the business
community is taken for granted by the City. The sense that businesses are not
fully supported by a coordinated public-private partnership is expressed in a
number of ways, including:
• Lake Oswego has complex systems (e.g., sign ordinance, tree restrictions)
that are difficult to navigate
• Relationship between business owners and the City is almost exclusively
about following regulations; business owners note that city officials don’t
check in on an informal basis to see how they are doing
• Some suggested the problem stemmed from city government staff not
residing in Lake Oswego
• It was also noted that leadership in the business community is stagnant,
with the same people just changing roles
• Parking, particularly one hour zones, is seen as a detriment to welcoming
• Participants expressed some frustration over the redundancy of
participating in the Rotary, Junior Women’s League, along with the
Chamber and City Council—lots of time invested with minimal return
“….so many well-intentioned organizations, yet none that I’ve ever seen
promote the businesses. The Chamber does great networking opportunities, the
Rotary, JWC, do great charity work. But, there is no one promoting LO as a
“The City needs a management philosophy driven by the expectation that they
should be supportive, be available and depict that service level that we’re trying
to attain in our private sector.”
B. Business Mix
• Need a larger retail base and stronger business mix
• Stores like Rite Aid and Ace Hardware contribute a “big box” role while
• City lacks kid-friendly choices
Lake Oswego Market Analysis & Business Development Plan ♦ Business Outreach 5
• Excellent restaurants are a strength
Among the opportunities identified to enhance the business base were:
• Updated office supply, bookstore
• Apple store/computer store
• Art galleries
• Art cooperative
• More destination retail—Finnegans Toys, FAO Schwartz-type store
“There should be a business center, a small conference center to serve our
C. Marketing Efforts
• Across the board, focus group participants agreed on the need for a
consistent marketing plan that serves all businesses, one that would
resonate in a unified voice or identity such as “The Pearl” conveys an
entire district in downtown Portland.
• Lake Oswego is a destination for locals and other suburbanites, but not for
• It was noted that Lake Oswego is a wonderful walking venue with first rate
parks, but these assets are not fully leveraged.
• The absence of a city calendar of events was noted as a liability.
“Many who live and work in our city are unaware of what LO has to offer.”
“We’re not getting promoted as a destination place for shopping. ”
“There is no one promoting LO as a business entity.”
“There are a lot of great businesses here that people don’t even realize exist.”
• Lake Oswego is perceived as elitist. This conveys a “stay-away” subliminal
message, i.e., it’s pricey. Lack of lake access contributes to this aura.
Public art is seen as a distinguishing feature for Lake Oswego. This unique asset,
coupled with the successful annual Arts Festival, was looked upon as a building
block that could add other events devoted to local goods and food.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Outreach 6
Successful business districts of any size have a healthy business climate and a
pro-active marketing program with key amenities and characteristics that
attract customers and/or business prospects. These features are particularly
critical for older commercial districts seeking to compete for retail dollars being
spent with new shopping malls, lifestyle centers and big box retailers.
Exhibit 3.1 Commercial Assessment identifies downtown’s strengths and
weaknesses based on critical success factors important to businesses seeking
new or expanded locations. A similar assessment was prepared for Lake Grove
as part of its retail market analysis report. The factors are:
1) Retail Marketplace
2) Real Estate
3) Attractive Shopping Environment
6) Business Environment
7) Business District Marketing
8) Business Attraction/Lead Generation Activities
The evaluation seeks to portray a composite picture of downtown Lake
Oswego’s commercial area from two key perspectives:
1) What customers want from a shopping experience; and
2) Business climate and marketing factors that affect business decision-
makers seeking a profitable location.
Note: Rating of N=Neutral means neither a strength nor weakness as compared
to other areas, but has opportunity for improvement.
Lake Oswego Market Analysis & Business Development Plan ♦ Commercial Assessment 8
Competitive Position Evaluation
Critical Success Factors Rating1 What Downtown Lake Oswego Offers
Growing population base N Over 136,000 people live in the Lake Oswego Retail
Market Area. In the next 5 years, the population will
expand to 142,000, growing at a moderate rate or 1.28%
on an average annual basis.
Average or above average S Median household income in 2009 for the market area is
incomes $73,717, $20,000 higher than the state overall. City of
Lake Oswego median income is well above average at
Other strong target markets S Within 2 miles of ‘A’ Avenue & 1st St are 1,196 businesses
and 10,377 employees; Clackamas County visitor market
generates over $449 million in spending/year.
Market opportunity S Existing and future potential retail demand will support an
estimated 2.8 million square feet of retail space by 2019.
Business growth/expansion N Small businesses continue to locate in commercial
centers but recent business closures may offset.
Available shopping – a selection N Convenience goods are readily available; shopper’s
of quality shopping for a range of goods are limited and tend to focus on higher end
incomes available shoppers.
Business anchors/civic attractors S In downtown area, over 20 eating establishments
bring repeat shoppers or visitors together with Lakeview Village and critical civic anchors
from the library, city hall, post office and Lakewood Art
Center collectively bring thousands of customers each
High occupancy rate S Ground floor vacancy rate at <5% at most Lake Oswego
centers is well below Portland retail market overall and an
indication of confidence in the Lake Oswego market.
Quality commercial space N Range of available space, conditions and prices with a
available with good signage, number of properties lacking visibility or being out of the
parking, accessibility and small retail main stream.
flexible space options.
Small spaces for retail incubation W None identified, though selected properties may be
or an incubator (reduces cost appropriate.
through shared expenses and
access to expertise)
Real estate investment is occurring N Strong investment over last decade now stalled by
economy. Several large mixed-use projects are
proposed or planned for the next decade w/ uncertain
1 Rating: S=Strength, N=Neutral, W=Weakness
Lake Oswego Market Analysis & Business Development Plan ♦ Commercial Assessment 9
Critical Success Factors Rating What Downtown Lake Oswego Offers
An up-to-date inventory of W There is no up-to-date, centralized inventory of available
available commercial buildings properties for lease or sale with price and basic property
and sites for sale and for lease specs.
Development game N City’s/LORA’s 2004 East End Development Plan provides a
plan/community vision solid development framework, yet no downtown-specific
vision and goals are identified.
Attractive Shopping Environment
Inviting, landscaped, well signed S Quality streetscape improvements have occurred on my
and appealing shopping downtown streets with visual appeal of Oswego Lake as
environment that entices auto an added draw. Lake Oswego’s beauty is synonymous
travelers to stop and shop w/ its image as noted in 2009 opinion poll of resident and
Quality built environment creating S City’s Community Development Code establishes high
interest and appeal standards. Lakeview Village is defining architectural
benchmark in downtown, urging quality for all
Attractive entrances with good N Wayfinding signage to and through downtown Lake
signage to downtown Oswego is limited. ‘A’ Avenue streetscape/built
environment signals ‘heart’ of downtown but shoppers
need clear, consistent directional signage to shopping
Storefronts reflect pride and N Business owners are working hard within the few vibrant
ownership retail blocks. Many more would benefit from help with
their storefront image and merchandising.
Concentrated nodes or linkages N At present, the retail energy is somewhat dispersed
of development creating a critical outside of Lakeview Village and Oswego Village
mass or dense shopping concentrations.
environment, attracting more
Parking to support stores and N Parking is free. Site-specific parking concerns. Perception
services of insufficient parking is potential barrier to some retailers.
An additional parking garage viewed as an additional
opportunity by some.
Walkable shopping district to N Selected blocks are compact, walkable, browsable.
encourage browsing and impulse Numerous destination businesses and very small clusters
shopping create lack of connectivity throughout downtown.
Financial assistance (revolving or W None identified
low-interest loans, SDC reductions,
Façade improvement/sign S $100,000 in façade improvement grants available
assistance through LORA, w/ maximum $15,000.
Lake Oswego Market Analysis & Business Development Plan ♦ Commercial Assessment 10
Critical Success Factors Rating What Downtown Lake Oswego Offers
Local entrepreneurship S Unique, locally-owned businesses are a trademark of
Lake Oswego shopping. Most of the new businesses
locating downtown are locally-owned.
A streamlined, one-stop regulatory W Several business owners interviewed expressed significant
process clearly articulated in frustration with the City’s development process saying it
planning documents and ‘took way too long’ and was not business-friendly. City
consistently administered. has taken recent steps to address concerns, but specifics
need to be shared and progress monitored.
Growing, diversified community W Highly limited industrial land; long term success is tied to
economic base increasing employment/office base; increasing Class A
office space is critical to attracting office users. Comp
Plan Goal 9 Economic Development element is being
updated. New Economic Development manager is
A coordinated network of W Multiple business-related organizations; partnerships seem
organizations or resource providers to be project-based; unclear roles and responsibilities
that provide an array of technical related to serving business community.
assistance and financing for
Ongoing Business Recognition W Not occurring for downtown area specifically.
Business District Marketing
Image/Identity N While recent survey shows community perceptions about
downtown are generally very favorable, no consistent
marketing message exists.
Special Events: frequency, mix S Multiple high quality events from Arts Festival and Lake
Run to Farmer’s Market and Lakewood Theatre
Business Promotions N Downtown Business Association has a few organized
promotions; no coordinated retail promotion calendar
Positive Community Outlook & N Community business boosterism, volunteerism and pride
Salesmanship are high but lack marketing and business development
Web site W No webpage exists focused on downtown district;
Chamber is presently creating one. Website needs to
convey available properties and retail market data.
Design, logo, slogans N Current market research initiatives will address the
absence of clear identity. City/LO Arts Council’s
commitment to the arts in general and public art in
particular is exceptional and under promoted.
Lake Oswego Market Analysis & Business Development Plan ♦ Commercial Assessment 11
Critical Success Factors Rating What Downtown Lake Oswego Offers
Business Attraction/Lead Generation Activities
Specific types of businesses and/or W Not established, but will be guided by retail market
merchandise identified to target analysis.
Business recruitment W A number of disconnected business/economic
campaign/lead-generating developments efforts w/ no organized downtown
activities Business Development Team. Success will be dictated by
Lake Oswego Market Analysis & Business Development Plan ♦ Commercial Assessment 12
The retail market analysis estimates the amount of potential new retail space
that can be supported in downtown Lake Oswego over the next ten years by
merchandise type. Key target markets for new retail and restaurant
development in downtown include local residents and employees working
nearby. This section provides an overview of these markets, Marketek’s demand
analysis and a summary of recent retail market trends.
Downtown Lake Oswego’s primary target consumer markets for retail, services,
restaurants and entertainment include local residents and area employees. This
section characterizes the size and features of each market, with an in-depth look
at the local resident market, which provides downtown with the greatest
opportunity for a dependable source of year-round sales.
A. Local Resident Shoppers
Based on patronage of existing businesses, downtown Lake Oswego’s location
within the region, downtown’s competitive assets and ongoing redevelopment
activity, geographic and man-made boundaries and drive-time estimates,
Marketek delineated a custom-drawn market area from which resident shoppers
are likely to emanate, as shown below.
Retail Market Area
Lake Oswego Market Analysis & Business Development Plan ♦ Retail Market Analysis 14
The Retail Market Area consists of 120,667 people in 49,000 households as of
2009. Since 2000, the area’s population has grown at an average annual rate of
1.0%, which is below the growth rates of the Portland MSA (1.8%) and State
(1.4%). By 2014, the Market Area is expected to add 2,236 households.
As Exhibit 4.2 shows, the Retail Market Area consists of high-income households
with educational levels surpassing those of the metro area and State. Median
income is $77,574 and 56.4% of persons age 25 or more have four year degrees
or higher. Appendix A, “Supplemental Target Market Data,” offers a more
detailed socioeconomic characterization of the Lake Oswego retail market.
Downtown Lake Oswego Retail Market Area
Demographic City of Lake Oswego Portland State of
Indicator Lake Oswego Market Area MSA Oregon
2009 (estimate) 37,792 136,252 2,233,323 3,841,859
2014 (forecast) 38,902 142,078 2,396,625 4,064,906
Avg. Ann. % Change ('00 to '09) 0.79% 1.28% 1.76% 1.37%
Avg. Ann. % Change ('09 to '14) 0.59% 0.86% 1.46% 1.16%
2009 (estimate) 15,589 55,827 857,304 1,495,911
2014 (forecast) 16,083 58,331 919,054 1,584,044
Avg. Ann. % Change ('00 to '09) 0.62% 1.16% 1.67% 1.35%
Avg. Ann. % Change ('09 to '14) 0.63% 0.90% 1.44% 1.18%
Average Household Size 2.41 2.41 2.56 2.51
Median Household Income $84,485 $73,717 $62,166 $53,483
Median Age (Years) 44.0 40.9 36.3 38.0
Percent White Alone 89.6% 88.8% 81.5% 83.7%
Percent Other Race/2+ Races 10.4% 11.2% 18.5% 16.3%
Percent Hispanic 3.5% 5.8% 10.3% 11.2%
Homeownership 69.9% 66.3% 62.7% 64.0%
Associate Degree 5.8% 6.6% 8.0% 7.7%
Four Year Degree or More 64.1% 53.5% 31.5% 27.7%
Source: ESRI BIS, Marketek, Inc.
Lake Oswego Market Analysis & Business Development Plan ♦ Retail Market Analysis 15
B. Area Employees
Employees working in or near Exhibit 4.3
downtown Lake Oswego are an 2-Mile Radius of Downtown
important captive market for retail,
service and entertainment businesses.
Research conducted by the Building
Owners and Managers Association of
America estimates that office workers
spend between 10% and 15% of their
expendable income in and near their
places of work. Top spending
categories include restaurants,
entertainment, cards and gifts,
personal care items and books and
There are an estimated 1,196
businesses and 10,377 employees
within a two mile radius of downtown
(Exhibits 4.3 and 4.4). The largest share of workers is in the service industry (5,570
persons or 53.7%). More specifically, 20% work in healthcare services and 14.8%
in educational services. Nearly a quarter (23.4%) of employees work in the retail
Businesses & Employment in a 2-Mile Radius of Downtown
Industry # % # %
Agriculture & Mining 19 1.6% 82 0.8%
Construction 77 6.4% 170 1.6%
Manufacturing 29 2.4% 344 3.3%
Transportation 14 1.2% 114 1.1%
Communication 1 0.1% 0 0.0%
Electric/Gas/Water/Sanitary Services 4 0.3% 41 0.4%
Wholesale Trade 49 4.1% 167 1.6%
Retail Trade 290 24.2% 2,427 23.4%
Finance/Insurance/Real Estate 141 11.8% 644 6.2%
Services 505 42.2% 5,570 53.7%
Government 31 2.6% 604 5.8%
Other 36 3.0% 214 2.1%
Total Employment 1,196 100.0% 10,377 100.0%
Note: Distance is from the intersection of Avenue A and First Street.
Source: ESRI BIS
Lake Oswego Market Analysis & Business Development Plan ♦ Retail Market Analysis 16
Marketek estimated potential demand for additional retail, restaurant and
entertainment space in downtown Lake Oswego based on resident spending in
the Retail Market Area. In each case, spending potential by merchandise type
was converted to square feet of store space based on sales per square foot
standards derived from the Urban Land Institute’s Dollars and Cents of Shopping
Demand is derived from two sources. The first, “existing demand” is demand for
retail goods by current market area households that is currently being met
outside of the market area. Existing demand is found by comparing retail supply
(i.e., actual retail sales) with retail demand (i.e., the expected amount spent by
market area residents based on consumer expenditure patterns). When
demand outweighs supply, a leakage occurs, indicating that consumers are
spending outside of the market area for retail goods or services. While
consumers will always do a certain amount of shopping away from home, this
comparison provides a reasonable indication of the availability of goods in the
local market. The second source of demand is “future demand” or demand
based on projected household growth and spending patterns in the market
area through 2019.
Exhibit 4.5 shows the existing retail supply and demand balance for the Market
Area by store type.
Existing Market Area Retail Balance
Spending Supply/ Leakage
Potential Retail Sales (or Surplus)
Apparel $59,011,766 $29,704,416 $29,307,350
Home Furnishings $57,947,241 $43,354,631 $14,592,610
Electronics & Appliances $54,097,893 $54,647,608 ($549,715)
Home Improvement & Gardening $75,985,916 $14,300,215 $61,685,701
Sporting Goods, Hobbies, Books & Music $25,542,377 $21,434,832 $4,107,545
General Merchandise $330,014,439 $86,291,703 $243,722,736
Miscellaneous Specialty Retail
$30,326,459 $22,555,699 $7,770,760
(florist, office supplies, gift stores, etc.)
Grocery $312,567,090 $260,091,327 $52,475,763
Health & Personal Care $47,008,045 $29,157,890 $17,850,155
Restaurants $281,800,006 $175,832,481 $105,967,525
Total Leakage $537,480,145
Source: ESRI BIS; Marketek, Inc.
Lake Oswego Market Analysis & Business Development Plan ♦ Retail Market Analysis 17
Sales leakage is occurring in nine of ten store categories, totaling $537 million,
with the largest leakage in general merchandise which includes department
stores (EX: Target, Fred Meyer). In sum, the leakage data for all categories
indicates a substantial imbalance in which only about 58% of retail demand is
met within the Market Area.
Potential new supportable retail space by merchandise category for the Market
Area over the next ten years is summarized in Exhibit 4.6.2 Existing demand has
the potential to support an additional 2.25 million square feet of retail space and
future demand (based on Market Area household growth) has the potential to
support an additional 535,000 through 2019. Taken together, potential existing
and future demand in the Market Area totals 2.8 million square feet of retail
space through 2019. For the detailed Market Area demand analysis, please refer
to Appendix B, “Retail Market Analysis.”
Potential Supportable New Retail Space
Downtown Lake Oswego Market Area
Merchandise/ 2009 2009-2014 2014-2019 Total Potential New
Service Category Existing Unmet New Market New Market Retail Space
Demand Area Demand Area Demand
(SF) (SF) (SF) (SF)
Apparel 367,225 26,298 27,498 421,021
Home Furnishings 197,944 27,298 28,544 253,787
Home Improvement 562,649 31,572 33,013 627,234
Specialty Retail 255,665 28,565 29,869 314,100
Subtotal 1,383,484 113,734 118,924 1,616,141
Grocery 367,633 49,813 52,086 469,533
Health/Personal Care 104,110 9,077 9,491 122,677
Subtotal 471,743 58,890 61,577 592,210
Restaurants 402,918 46,408 48,526 497,852
Entertainment NA 19,414 20,300 39,714
Personal Services NA 23,153 24,209 47,362
Total 2,258,145 261,598 273,536 2,793,280
Source: ESRI; Urban Land Institute; Marketek, Inc.
Potential demand for new retail space is divided among five merchandise
categories: shopper’s goods, restaurants, entertainment, convenience goods
and personal services. The types of goods and services within these categories
are provided in Appendix B. Sales leakage data and household expenditure
For purposes of determining retail potential by square footage, the general merchandise sales
leakage is redistributed by merchandise type and includes apparel, electronics, home furnishings,
home improvements, personal care and grocery.
Lake Oswego Market Analysis & Business Development Plan ♦ Retail Market Analysis 18
patterns show that Market Area residents may spend up to 34% of demand for
shoppers and convenience goods in department stores. This ratio translates to
potential support for 747,000 square feet of retail space in a department store
format within the Market Area through 2019.
The share of space that downtown or any other Lake Oswego shopping centers
can ultimately capture will depend on numerous factors including retail
outreach efforts, the availability of quality retail-ready space, the performance
of competitive shopping areas and the success of downtown’s comprehensive
redevelopment program that includes a variety of retail, service and
Marketek’s market analysis for Lake Grove indicated that this district has the
potential to capture 10% of existing demand and 15% of the future demand
within its market area, or a total of 66,566 new square feet of retail space over
the next ten years (see Appendix B). Eighty-four percent (84.3%) of households in
the Lake Grove Market Area are also in (or overlap with) the downtown Lake
Oswego Market Area. This means that downtown Market Area households
would potentially support 56,115 square feet of retail space in Lake Grove and in
fact will do a certain amount of shopping in both areas. Likewise, Lake Grove
area households will do some of their shopping in downtown Lake Oswego.
Based on its existing commercial base, proposed developments, strong market
demand and aggressive marketing, it is reasonable to assume that downtown
Lake Oswego could capture 10% of existing and future potential demand. This
equates to 279,328 square feet of new retail space by 2019. Downtown is likely
to capture a lower percentage of convenience goods as market area
consumers will shop for this merchandise as close to home as possible. However,
downtown may capture a slightly higher percentage of shopper’s goods in
selected categories such as apparel and specialty and dining demand, as it has
very good potential to continue to draw destination retailers and restaurants.
Downtown’s success at transforming demand potential to new retail space will
depend on providing quality retail space and on Lake Oswego’s marketing and
business development efforts. A passive or segmented approach would likely
result in downtown falling short of its estimated potential. To get a sense of
demand estimates in terms of typical stores sizes, Appendix B provides the
median sizes of several types of businesses that may be appropriate for
Retail Market Trends
Although the retail market has been hard hit by the economic downturn in
recent months, retail trends show that sales are indeed picking up and consumer
confidence is rising. Research by NAI Norris, Beggs & Simpson, International
Council of Shopping Centers, The Conference Board and Forbes, illustrate trends
Lake Oswego Market Analysis & Business Development Plan ♦ Retail Market Analysis 19
toward compact retail development, a proliferation of lifestyle centers and food
and entertainment tenants increasingly becoming retail anchors.
Short Term Trends
• Consumer Confidence Index (index of consumer confidence based on
1985 = 100) has been on the rise for summer, and was measured at 54.5 in
August 2009 (The Conference Board, 2009)
• Retailers will continue to close more stores than they opened (2008 v. 2009),
with the large proportion of closings due from independent retailers (for
example, 200 to 300 independent bookstores are expected to close this
• Credit crunch has hurt many mall owners, and many stores are
implementing cost cutting policies such as renegotiating rents
• Specialty retailers, luxury stores and apparel stores will be the most
vulnerable in the next 18 months to two years
Long Term Trends
• Lifestyle centers are replacing malls by attempting to create a sense of
community, and focus on food, entertainment, music, books and home
• National trend toward compact, urban living, with less dependence on the
auto will facilitate increased downtown retail spending
• Middle-market big-box stores (such as Target and Bed, Bath & Beyond) that
are currently underrepresented in the central city are exploring these
• The most successful and resilient retail establishments will be located in
more mature market areas (cities vs. new suburbs)
• Stores that specialize in repairing durable goods like cars and appliances
are poised for long-term success
Internet Retail Trends
• Internet retail sales account for less than 5% of the overall U.S. market but
continue to grow, seeing an increase of 16.6% in 2008
• 69% of middle-market retailers said they planned to expand online selling as
the holiday season approaches (Forbes, 2009)
• Department stores continue to be important anchors for downtowns by
generating foot traffic to support other downtown retailers
• Food and entertainment retail remain strong and expect continued growth,
often serving as anchors
• Downtowns can benefit by reinforcing unique attributes through promotion
• The proliferation of lifestyle centers has eroded some of downtown’s share
of regional retail spending because many metropolitan areas have
• New lifestyle centers will seek to become more like downtowns by creating
truly usable public spaces and a more unique shopping experience; this will
Lake Oswego Market Analysis & Business Development Plan ♦ Retail Market Analysis 20
further increase competition with downtowns
• Expect savings rate to increase and credit availability to decrease in the
• Some analysts suggest a newfound conservatism and attention to value
• Consumer spending is anticipated to increase in the next year as the
economy picks up
• Hot Retailers identified by International Council of Shopping Centers (ICSC)
∗ Food/Beverage: Five Guys Burgers, Sonic Drive In, Froots, Pinkberry, Pollo
∗ Apparel: Apricot Lane, Billabong, L.L. Bean
∗ Convenience Grocery: Fresh & Easy Neighborhood Market
∗ Other: Ridemakerz, 99 cents Only, Weight Watchers
Portland and Lake Oswego Retail Market
• All Portland submarkets (except for Eastside) experienced negative retail
• Portland’s Central City has the highest vacancy rate at 9.2%; Southeast/East
Clackamas has the lowest at 3.4% (Q2, 2009)
• Portland’s overall vacancy rate of 7.1%, up from 5.5% in 2008
• The average direct lease rate in Lake Oswego (Q3, 2009) ranges from
$20.32/NNN to $29.61/NNN (CoStar Group, 2009)
• The Mercantile Drive (3970 SW Mercantile Dr, Lake Oswego) center has over
4,000 SF available at $14.50-$28.50/SF/year
• Lease rates for older Lake Oswego properties range from $12-$18.00/SF NNN
Lake Oswego Market Analysis & Business Development Plan ♦ Retail Market Analysis 21
Existing Business Base/Inventory
Marketek inventoried and mapped the ground floor businesses of the Lake
Grove, Mountain Park, Downtown Lake Oswego and Palisades/McVey shopping
areas. The complete inventory appears in Appendix C with summaries and
maps of the ground floor uses appearing in the pages that follow. Total
commercial space and the vacancy rate by square feet are estimated below
for each shopping area together with some of the retail anchors.
Major Shopping Centers/Areas
Est. Gross Est.
Shopping Vacancy Anchor Tenants
Center Rate (%) (selected)
Area (SF) (SF)
Lake Grove 780,286 62,847 8.1% Wizer’s Grocers
New Seasons Market
Mountain Park 188,380 6,820 3.6% Columbia Sportswear
Department Motor Vehicles
Sur la Table
Downtown 747,103 35,596 4.8% Petco
Lake Oswego Library
Palisades 114,300 5,010 4.4% Grimm’s Service Station
Source: Marketek, Inc. and City of Lake Oswego
A. Lake Grove Village Center
The Lake Grove shopping and business district is nearly one mile in length with
Boones Ferry Road as the spine. This four-lane vehicle-oriented commercial
corridor stretches from Madrona Street on the southern end to Kruse Way to the
north. Estimated ground floor built space totals over 780,000 square feet with an
8% vacancy rate. The business inventory revealed: 22 retailers, 28 dining/food-
related businesses and 56 personal/professional/other service businesses.
The Lake Grove district includes notable civic anchors including the Lake Grove
Post Office and Lake Grove Elementary School. The Mercantile Medical Plaza
at the corner of Kruse Way and Boones Ferry is a significant mixed use anchor
with medical offices/services and some dining establishments.
The retail heart or 100% corner is Bryant Road /Boones Ferry Road. Key business
anchors are located at this intersection including Albertson’s and Wizer’s grocers,
Rite Aid, Shell Gas and two banks. The greatest concentration of retail is
clustered at or adjacent to this intersection with several retailers at the Lake
Grove/Wizer’s strip center and just north at Bryant Business Center with Healthy
Pet, Aaron Brothers Art & Framing and Blockbuster Video.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 23
Beyond these small business clusters, the overwhelming majority of retailers and
restaurants are freestanding, destination businesses, often with their own
individual parking areas on the street’s edge. Although Lake Grove is home to
many high quality businesses, its suburban style urban form makes it challenging
to establish a pedestrian oriented shopping district.
Lake Grove Village Center
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 24
B. Mountain Park
This shopping area at the base of the Mountain Park community on Boones Ferry
Road, incorporates an estimated 188,380 square feet of built space and is
principally organized as the Oswego Towne Square Shopping Center. It includes
9 retailers, 4 food/dining businesses and 12 service establishments. Anchors
include New Seasons Market, several outlet stores (Columbia Sportswear, Norm
Thompson and Hanna Andersson), and the State of Oregon Department of
Motor Vehicles. At the intersection of Monroe Pkwy and Boones Ferry Road is
also a gas station/convenience mart. The vacancy rate is estimated at 3.6%.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 25
C. Downtown Lake Oswego
The Lake Oswego Downtown Business Association describes the downtown area
as two main arteries: 1. State Street corridor extending from McVey Avenue south
to D Avenue north and 2. East-west, A Avenue from 6th Street to State, and
includes adjacent commercial blocks on B Avenue. There are approximately
747,000 square feet of ground floor building space within this district, of which
4.8% are estimated vacant.
Downtown is comprised of one significant pedestrian-oriented retail cluster, 1st
Street from B Avenue to Millennium Park, several other strip commercial centers
of varying sizes and multiple freestanding destination businesses. Lakeview
Village mixed-use center is the flagship development with Sur La Table and
several restaurant anchors. Among the other centers are Oswego Village
anchored by Albertson’s and True Value and Lake Place with Petco and US Bank
as key tenants.
Key civic anchors in the downtown core are City Hall, the post office, the fire
station and the Lake Oswego Library. There are 63 retail, 25 food-related, and 53
service tenants on the ground floor.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 26
Downtown Lake Oswego
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 27
At the intersection of McVey Avenue and South Shore Boulevard are two
gas/service stations and three small strip shopping centers: McVey Crossing,
Palisades Place and Palisades Market. Lamb’s Palisades Market, Grimm’s
Service Station and Starbucks Coffee (none in contiguous spaces) are the prime
anchor tenants for this commercial area. A small U.S. Post Office center exists
within the Palisades Market. Retail establishments total 7; food-related, 4; and
services, 7. The area contains an estimated 114,300 square feet of commercial
space with an approximate 4.4% vacancy rate.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 28
Downtown Retail Themes
Nationwide, historic downtowns and neighborhoods are recognized and
celebrated as the center of unique, specialty, one-of-a-kind merchandise and
entrepreneurs. While often anchored with large national retailers, the most
successful downtown streets are lined with a preponderance of independent,
creative retailers. The key retail themes noted by many downtown professionals
are highlighted below. Examples of Lake Oswego businesses that fit these niches
are noted as well.
Downtown Retail Themes
Theme Examples in Downtown
Lifestyle and wellness retail Rumi Simone, Lululemon, Urbane Zen,
Respond to busy lives and desire for wellness & Elyce Estitique, La Belle Nails, Foot
quality of life Traffic
Community gathering places
Millennium Plaza, Peet’s Coffee & Tea,
Central place suited for social or community
St. Honore Bakery, Chuck’s Place
Retailers that celebrate local heritage
Connect to community’s past
Stores that entertain Farmer’s Market, Play Boutique,
“Shoppertainment” concepts DipintoAMano (pottery)
Stores that celebrate local arts Graham’s Book/
Locally made arts, gifts and other products Stationery, Artisan Frame Shop,
Stores that educate Bike Gallery
Offer an education or lessons with products Sur La Table, Wizer’s (wine)
Stores with a global perspective Onda Gallery
Businesses that contribute to a better world
Gifts and indulgences Bernard Callebeau, Moonstruck,
Chocolates, flowers, artwork, etc. Fusion Art of Flowers, Buddies, R. Bloom
Destination retail Accessories from Heart
One-of-a-kind and innovative businesses Wiz Bang
Neighborhood-serving retailers Safeway, Albertsons, Rite-Aid
Conveniences that enhance quality of life
Adapted from ‘Ten Realistic Retail Themes for a Vibrant Downtown’ by Bill Ryan
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 29
Lake Oswego’s overriding challenge for business attraction and expansion is the
limited amount of built retail space available for occupancy in the core retail
area, particularly of a suitable size.
Several projects in the offing will add quality infill and anchor retail space to the
downtown inventory but most will not be ready for several years. Exhibit 5.7
Downtown Lake Oswego Key Opportunity Sites highlights the most prominent
proposed new developments. The timeline for project initiation ranges from 3-5
years, with some (such as Foothills) to be phased over the next decade and
These anticipated developments as proposed would accommodate 135,000 SF
of retail and 115,000 SF of mixed-use space, some of which would be retail.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 30
Downtown Lake Oswego Key Opportunity Sites
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 31
Target Business & Merchandise Opportunities
A successful business district in virtually any size community requires a balance
and mix of uses that includes retail shopping, professional, financial and
government services, entertainment, restaurants and personal services. The
results of the statistical market analysis indicate that downtown has ample
opportunity to grow its retail base and fill niches and voids in the local
The following list provides potential target businesses for Downtown Lake
Oswego, developed based on business outreach, market analysis results and
Marketek’s experience with facilitating retail development in downtowns and
business districts nationwide.
Target Business/Merchandise Opportunities
Downtown Lake Oswego
Merchandise • Grocery – green grocer • Made in Lake Oswego
• Drugstore – expanded • Art galleries
• Music • Cigar/Magazine Shop
• Garden supplies • Bed/bath/linen
• Unique children’s • Home accessories
clothes, books and gifts • Shoes
• Lamps/shades/lighting • Art supplies
• Furniture—contemporary • Fabric, knitting supplies
accessories • Apparel and
• Sporting goods and accessories (unique
outdoor gear women’s and men’s,
• Arts Co-operative dressy women’s)
• Boutique Bookstore • Gifts
• Quality consignment • Computer store
(children, high fashion
Restaurants/Food • Healthy foods • Wine and cheese shop
• Specialty bakery • Family –diner, quick
• Ethnic-Indian service, deli
• Breakfast • Brewpub
Entertainment • Live music – jazz club
Personal care/ • Health care/naturopath • Day spa
Professional Services • Eye care/frames • Photography studio
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 32
Based on the retail market analysis and the business targets listed in Exhibit 5.8,
the table below shows potential downtown Lake Oswego business prospects,
including local companies and national chains and franchises. Details regarding
retailers expanding in the State of Oregon are provided in Appendix D.
Downtown Lake Oswego Business Prospects
National Chains and Franchises
Merchandise • Donald J. Pliner • Tea Shop
• Cigar Lounge • Anthropologie
• Apple • Aveda
• Cole Haan • Free People
• Lush Homemade Cosmetics • Powell’s Books
• Puma • Roots
• Sephora • The Body Shop
• The Orvis Company • The Walking Company
• Title Nine Sports • Tommy Bahama
• Total Wine & More • Williams-Sonoma
• Winestyles • Wireless Toyz
Restaurants/ • Amber India • Consuelo Mexican Bistro
Food • Gourmet Burgers & Sandwiches • Baja Fresh Mexican Grill
• Ben & Jerry’s Ice Cream • Five Guys Burger & Fries
• Gordon Biersch Brewery • Great Harvest
• Red Brick Pizza • The Original SoupMan
• Uno Restaurants • Which Wich
Selected Local and Regional Businesses
Merchandise • Lawrence Gallery • Laura Russo Gallery
• Elizabeth Leach Gallery • Daedalus Bookstore
• Three Monkeys • Cloud and Leaf Bookstore
• Rich’s Cigar/Magazine (Manzanita)
• Grassroots Books and Music • Abundant Yarn and Dyeworks
(Corvallis) • Margaret and Oliver’s Vintage
• Annie Bloom’s Clothing
• Fringe Vintage • Broadway Books
• Sweet Peas Children’s Resale • Tres Savvy
and Maternity • Souchi
• Manor • Cocoon Silk
• Fine Wares • Dazzle
• Girlfriends • Piccolina Upscale Children’s and
• Jane Currin Maternity Resale
• Twist • Gilded Closet
• Book Bin (Salem/Corvallis) • Fancy Pants Children’s Boutique
• Small Sculpture (Vancouver, WA)
Restaurants/ • Piece of Cake • Rose’s Deli
Food • Vindalho Indian • Lil Cooperstown (West Linn)
• Bridgeport Ale House • Deschutes Brewery
• Noodles Restaurant • Lucky Labrador Brew Pub
Lake Oswego Market Analysis & Business Development Plan ♦ Business Mix 33
Downtown Retail Themes
The City of Lake Oswego is poised for significant change over the next decade
with numerous major projects planned and underway in the commercial core.
The economy, changing market conditions, capital availability and other factors
may affect the timing of some of these projects.
To encourage a successful business mix, the Retail Development Guiding
Principles below should be considered and promoted as a framework for retail
business development in Lake Oswego. These principles are further developed
in the marketing action plan.
Retail Development Guiding Principles
1. Expand The Size And Scope Of The Consumer Market. Although this seems obvious, the
critical link between market size and retail development cannot be overstated. Developing
a strong mix of retail and service establishments requires continued growth in Lake Oswego
households, employment and traffic to the area.
Strengthening the residential base in and immediately surrounding Lake Oswego will serve
as an important catalyst for retail expansion. Residents of new housing will look to Lake
Oswego for day-to-day goods and services as well as for entertainment and specialty items.
Boosting the number of employees in the area by promoting employment opportunities will
also contribute to a built–in consumer market. Visitors from the Portland region or beyond
will seek unique dining and shopping and are another important target market.
2. Recognize and Promote the Unique Character of Lake Oswego’s Shopping Areas. The
marketing process begins with a clear statement of Lake Oswego’s identity and
competitive position in the marketplace. In general, downtown Lake Oswego should
promote itself as the civic heart of the community – a special and vibrant entertainment
and specialty shopping destination for residents, employees and businesses. The Lake Grove
corridor is a convenience and business service shopping center with a large mix of family
3. Take Care of Existing Business and Civic Anchors. Lake Oswego’s commercial base has
been strengthened over the last several years with new quality businesses, property
reinvestment, more events and promotion and increased shopper traffic. Sustaining that
success—particularly in a down economy—begins with taking care of the key business
anchors that are contributing to the success achieved to date. This should be a priority
strategy for retail development in economically good times or bad.
4. Define the Retail Core and Key Nodes. Hand-in-hand with creating a safe, pleasant and
quality pedestrian environment and transportation connections is the need to clarify the
core retail areas, cluster businesses and limit sprawl. This is particularly important for the Lake
Grove corridor with many stands alone, destination businesses. A flourishing retail street –
even one or two blocks long – is often characterized by active uses on the ground floor,
uninterrupted retail on both sides of street and one or more significant anchor/customer
traffic generators. In downtown, 1st Street including Lakeview Village comes closest to
accomplishing this but it is still a very small area. Keep in mind that the greater the
concentration of retail, the greater the shopper draw and, hence, the best chance for
building a sustainable district.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 35
5. Manage the Merchandise Mix. Building on a clear definition of key retail nodes is working to
influence the business mix through business clustering and retail tenanting. Developers
naturally lead this activity for large mixed-use or retail projects, but a strategic approach is
needed throughout a business district. From one shopping center to the next, the mix will
depend on urban design, the size, location, character and availability of properties, existing
anchors and other factors. Planning the mix is also dependent on location requirements of
target tenants and the need to serve Lake Oswego’s dominant demographic profiles.
6. Know What You Have to Offer. A necessary strategy for recruiting business prospects and
developers is to be able to provide key marketplace data, an inventory of available real
estate and general sales and marketing material to make the case for commercial business
success. The City’s new Economic Development Manager should be responsible for
maintaining and updating property/business inventories. A City of Lake Oswego prospectus
providing a snapshot of the market opportunity is needed together with a clear community
7. Aggressively Market Yourself. Just like any shopping mall, downtown Lake Oswego and
Lake Grove need to aggressively market their assets to quality retailers, service businesses
and office tenants promoting Lake Oswego as a prime choice for business location.
Working with brokers and developers, local and regional media and community and
business organizations, Lake Oswego’s commercial market opportunities need to be at the
forefront of communications with those who can convince potential investors that Lake
Oswego area is a positive and unique place to do business.
Business District Market Position
For a business development program to be successful, a clear market position
statement must be articulated for the main shopping districts. A market position
encompasses the type of retail mix, the target customer market, key messages
and what sets the shopping center apart. These elements are summarized in the
exhibits that follow.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 36
Lake Grove Market Position
Boones Ferry from Kruse Way (north) to Madrona Street (south)
Estimated ground floor built space totals over 780,000 square feet with 8% vacant
22 retailers, 28 dining/food-related businesses and 56 personal/professional/other service
Primary: Lake Oswego residents and Kruse Way businesses/employees
Secondary: Pass through travelers using Boones Ferry/Kruse Way corridors and overnight
visitors on I-5.
Key demographics: middle-to-upper income women and families
Market Position Statement
Lake Grove is a small town shopping district serving a significant daytime marketplace
with a wide range of convenience shopping choices and commercial services.
• Locally owned and operated businesses emphasizing excellent customer service
• Catering to a variety of income levels
• Independent businesses with hometown hospitality
• Businesses supporting businesses to grow the local economy
Lake Grove is a dual-purpose shopping district. It is both a neighborhood shopping
district offering day-to-day retail and service needs and the Kruse Way community’s
dining and business service center.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 37
Downtown Lake Oswego Market Position
Core area of A and B Avenues and State Street commercial area from D Avenue to
747,000 square feet of ground floor building space with 4.7% vacant
63 retail, 25 food/dining, 53 service/office businesses
Primary: Lake Oswego and West Linn residents and surrounding areas
Secondary: Portland region
Demographic: middle and upper income women and families
Market Position Statement
Downtown Lake Oswego is a unique lakefront business district with one-of-a-kind
specialty shopping, entertainment and restaurants serving local and metro residents.
• Portland’s only waterfront dining experience
• A waterfront art, entertainment and boutique shopping district
• Sleepy suburb continuing its metamorphis to high quality urban lifestyle center
• A place to bring the whole family with three waterfront parks
A vibrant retail and entertainment district with something for everyone. A variety of
practical goods and services provide a complete shopping experience for local
residents, while trendy, up-scale stores attract out-of-town shoppers and visitors to the
area. Exceptional customer service, convenient hours and appealing storefronts keep
customers coming back. Downtown Lake Oswego is poised to be a new urban hub with
plans for the Streetcar on State Street and increased density along the Willamette River in
the Foothills area.
Business Clustering Guidelines
Clustering, a management tool used extensively by shopping centers, involves
strategically locating businesses within a shopping center to take advantage of
relationships between nearby businesses. Although more challenging, business
districts such as Lake Grove and Downtown that function with multiple property
owners can also employ clustering principles and need to for optimum success.
To implement a clustering strategy, it is important to understand existing assets or
clusters, to know where building vacancies exist and to identify and actively
target businesses to suitable locations. Clustering strategies include locating
businesses near compatible businesses, complementary businesses, competitive
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 38
businesses, or traffic generators. Examples of clusters in Lake Oswego include
restaurants at Lakeview Village on 1st and apparel stores on A Avenue and State.
General business clustering guidelines are below. The map on the following
page is intended as a guide to portray the proposed future orientation of
shopping areas within downtown Lake Oswego based upon their current tenants
and overall design.
• Build upon existing retail anchors and other traffic-generators such as civic
uses and restaurants.
• Professional service/office uses should be located in upper stories and on
secondary streets out of the retail core.
• Beauty and personal care services can be scattered throughout the
• Restaurants can be located as entertainment anchors throughout the
district with sensitivity to avoiding conflicts with neighboring businesses that
may be seeking to serve a different market segment.
• Convenience businesses like grocery and drugstores are ideally located
close to residential concentrations.
The cluster map that follows provides a short term framework for organizing
downtown business development efforts recognizing that over time key
development projects will influence the business vision and mix through
new/changing anchors, urban form and pedestrian/auto orientations.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 39
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 40
This section provides an overview of key business development strategies and
action steps for successfully promoting and capitalizing on the market
opportunities identified in the market analysis. Exhibit 6.5 identifies the
recommended lead entities for implementing specific actions.
BUSINESS DEVELOPMENT & MARKETING STRATEGIES
Primary Program Goals • Increase local spending by trade area shopper and visitor target
• Retain, strengthen and expand the existing business base in Lake
• Recruit and encourage businesses that will complement and improve
the existing commercial mix and will enhance the attractiveness of
Lake Oswego shopping centers
Program Elements • Product Readiness
• Business Retention and Expansion
• Business Attraction
• Customer Attraction
Core Strategies • Package and promote Lake Oswego’s assets and opportunities for
businesses and shoppers
• Encourage, support, and assist existing businesses
• Target new businesses to add to the business mix and strengthen the
overall economic base
• Encourage residents, businesses, visitors, and area employees to shop
in Lake Oswego
• Develop positive Lake Oswego image through continuous and
A. Product Readiness
Quality business tenants need attractive, appropriately sized commercial
properties in the right location for attracting customers. Specialty shops generally
seek small square footages − usually 500 SF to 2,500 SF – whereas national
retailers may need several thousand square feet. It is important to become
thoroughly knowledgeable about and actively promote the commercial real
estate Lake Oswego has to offer.
The process begins with formation of a Property Improvement Team. This small
group will include City economic development staff and Lake Oswego
Redevelopment Agency (LORA) with one or more business leaders. They will
manage the tasks outlined below
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 41
1. Develop a property database of vacant commercial properties.
Marketing business opportunities and properties go hand in hand. Focus
first on taking inventory of vacant properties to determine which ones are
ready for occupants. Determine what work needs to be done to make
key properties ‘retail-ready.’
2. Inventory and assess all other key properties. Other pivotal, influential
properties in the downtown retail core—especially ones where a change
in occupancy may be desirable—should be inventoried. Make a
determination regarding the ability to influence the property and/or the
tenant. See Appendix E for sample evaluation form.
3. Create ‘Available Properties’ link. Prepare and keep up-to-date a one-
stop website for Lake Oswego Available Property (commercial). Various
software packages exist that could support this effort. Work with property
owners and brokers to collect specific property data and photos to input
in the system. Based on the steps above, a number of properties will be
identified that are ready for quality tenants. Prepare property marketing
sheets and make available in hard copy and on the web.
4. Contact key property owners. Property owners are the lynchpins to the
right tenancy as well as property improvements. The team will identify the
best outreach mechanism and person for each key property owner and
determine what information is needed.
5. Create a game plan for priority properties. Within the downtown core
and Lake Grove, several properties are in need of updating. Based on
property owner willingness and interest, the team will identify a select
number of properties and strategize improvement.
6. Cross match properties to business targets. Using the cluster map as a
guide, work to fill vacant spaces with specific store types and tenants.
7. Identify, package and actively promote property improvement incentives
(e.g. façade improvement program). Clarify what incentives or assistance
is available in the downtown redevelopment area and in other Lake
Oswego commercial districts.
8. Organize a commercial property improvement recognition program. Any
property owner caught in the act of reinvesting and making positive
property improvements should be recognized for his efforts and
contribution to improving the shopping/commercial environment. There
should be an organized effort to ensure that ‘thanks’ are extended.
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 42
B. Business Retention and Expansion
Helping Lake Oswego’s existing business base succeed will be the underpinning
of successful economic development. Most often, businesses want and need
help with marketing and merchandising, finance, systems improvements, tenant
and façade improvements, business location/expansion and staying on top of
marketplace trends and opportunities.
A key weakness of small independent businesses, including many observed in
Lake Oswego, is their inattention to overall image and visual appeal. Store
image and identity includes signage, storefront appearance, window displays,
store merchandising, lighting and other elements that collectively send
customers a strong impression about business quality and offerings.
Preliminary implementation steps include:
1. Promote the opportunities identified from the Retail Market Analysis
through the media and in networking meetings. Encourage existing
businesses to expand and diversify their merchandise mix based upon the
2. Organize a business outreach/assistance/program where a local ‘Business
Assistance Team’ is in regular contact with local small businesses and
helps identify and respond to critical issues in a timely manner. Initially,
this may be the Economic Development Manager. Develop a regular
schedule of business visits and follow-up. Track and report the results.
3. Assist existing businesses in expansion and diversification of merchandise
based on the market opportunities identified. This is the key to capturing
opportunities identified in the market analysis. Offer one-on-one technical
assistance as appropriate through a grant or other similar program.
4. Create an action plan to respond to concerns identified related to the
City’s business-friendliness and regulatory environment. Example steps
include: train city staff in business-friendly practices, institute electronic
customer satisfaction surveys for all developer/business projects.
Demonstrate and publicize measurable progress regarding the
development process, timeliness, relocation assistance and related issues.
5. Designate a business ombudsman staff position at the City. This would be
a single person serving as the coordinator/clearing house for established
or relocating small business prospects or start-ups looking for a location
and needing to understand all the ‘steps’ required from the City.
6. Initiate a community-wide Business Recognition Program to celebrate
and appreciate Lake Oswego small businesses for their exceptional
service, business improvement, community service/leadership, new
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 43
initiatives and other positive endeavors. This effort should include the
entire business community not just Chamber of Commerce members.
7. Expand the business-to-business marketing program. Encourage Lake
Oswego business owners to get to know what each business offers. This will
not only help cross-market to customers, but will also maximize local
purchases. Organize a formal Buy Here program that may include
incentives (discounts) for spending ‘in town’ with other businesses, as well
as a measurable target of 5% for shifting product and service purchases
from out-of-town to local companies.
C. Business Attraction
Lake Oswego will need to work strategically to encourage quality businesses to
locate in the most appropriate and desirable retail locations. Business
development efforts should emphasize both unique, locally-owned businesses,
but also carefully selected national retailers and regional ‘chain-lets’ that offer
credibility and/or the ability to draw a broad middle and upper income market.
Business Recruitment involves two strategic efforts, Marketing and Sales.
Important to both efforts is a clear understanding of:
• Vision – where are we headed?
• Product – what do we have to offer?
• Audience – whom are we targeting?
• Benefit –why should a business be located here?
Preliminary steps are identified below:
1. Succinctly package Lake Oswego’s vision. Create a summary vision (a
visual aid and/or a one-page synopsis) of the future of Lake Oswego as
conveyed through the City’s long-range goals. Initiate same for
downtown Lake Oswego. Call out the catalytic projects underway now
and those planned for the next 3 to 5 years. Using a one-piece visual map
will quickly introduce a prospective business or developer to the
opportunities available. For Lake Grove, produce vision statement from
Village Center Plan.
2. Prepare a sales package to promote the business opportunities complete
with data and property sheets, appropriate maps, resource and
3. Create an economic development webpage on the City’s website with all
of the above information in downloadable format. Add a blog and RSS
feed to the website; this will help drive businesses to the website and track
information. In addition, create a place to “sign-up” for Lake Oswego
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 44
4. Develop downloadable data. It is important that developers and
prospective businesses have access to downloadable marketplace data
for Lake Oswego, including maps, leading downtown businesses, current
and future planning projects, business opportunities, and other pertinent
5. Focus on filling key storefront vacancies within key shopping areas as
identified in the Product Readiness strategies. Use targeted business list
and clustering strategies provided in the market analysis to guide the
6. Create a referral network of leading realtors/brokers, developers and
community and business leaders. Educate them regarding the types of
businesses most appropriate for Lake Oswego’s key commercial areas.
Develop a schedule of communications and events to keep the group
informed about business development initiatives and opportunities.
7. Develop a business recruitment campaign for up to three key business
opportunities outlined in the Market Analysis. The campaign may include
mailings, phone calls, one-on-one contact, third party outreach, hosted
site visits, targeted marketing materials and related activities. A sample
campaign is provided in Appendix F.
8. Actively manage the business development process. Like all good sales
efforts, the devil is in the details of managing the prospect pipeline and
following through on the needs and interests of serious business people in
a timely fashion. Create or purchase a software system for anticipated
business recruitment campaigns in order to track who’s doing what and
should be, when.
9. Create a comprehensive, regularly updated database of key economic
indicators to track and promote Lake Oswego’s vitality and overall
progress. Data should include: vacancy rate, jobs, employment,
private/public investment, businesses recruited/retained, special events/
promotions, traffic counts, retail impacts, etc.
D. Customer Attraction
The most inviting, well-maintained and smartly tenanted shopping districts must
continuously work hard to develop and promote the image and promise that
they offer to the shoppers they seek to serve. Lake Oswego shopping districts—
and the community as a whole—need to market their unique characteristics to
local and regional shoppers and visitors, and create an effective unified
promotion strategy to forge a positive image and engaging atmosphere of fun
and activity. Initial steps include:
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 45
1. Organize and activate a Lake Oswego brand identity that will be
incorporated into all marketing and development initiatives (key
messages, logos, brochures, website, etc.) Business districts and
communities that win in the long run are those that create brand
personalities that connect with people, that share values and that build
long term relationships. The bottom line is that Lake Oswego business
districts need aggressive marketing to residents, visitors and quality
retailers promoting Lake Oswego as a first choice for shopping and
business location. The 2009 shopper and business research lays the
foundation for this with major themes and messages already identified.
The next step is to succinctly package the ideas.
2. Gain consensus from key collaborators (City, Chamber, LGBA, DBA,
Strategic Business Alliance) on overall marketing plan, resources,
roles/responsibilities and execution of integrated marketing tactics
(including advertising, public relations, online/web marketing, results
measurement-ROI) building on the brand message and proposed district
market positions as a foundation. Be clear on marketing
efforts/campaigns that serve the entire city vs. specific shopping districts.
Determine 30-90-120 action-plan through facilitated marketing work
session. Participants should have marketing/promotion know-how. This ad
hoc Marketing Team should continue to meet quarterly to update the
work program, share information and coordinate efforts.
3. Map out specific promotion/marketing plans for the Lake Grove and
downtown shopping districts including: an annual calendar of events and
retail/community promotions, rack cards, other print material, media
releases, electronic/social media and cross marketing efforts (e.g. special
events such as the Art Festival or in collaboration with local assets such as
I-5 hotels and Kruse Way businesses).
4. Develop a cohesive consumer-oriented Lake Oswego website that drives
customers to the City of Lake Oswego. A website is needed that
communicates the shopping/dining/entertainment experience and
incorporates the brand identity in the process. The target audience
includes residents and visitors as well as potential investors. The website
should call out all the shopping districts and link to Lake Grove and
downtown-specific web pages that include a list of businesses, special
events and related info.
5. Develop a community/City public relations program to promote Lake
Oswego successes, unique offerings, creative initiatives and other positive
newsworthy activities /events. This will elevate the city’s profile in the
Portland region, Willamette Valley and state.
6. Produce a new community event in the winter season focused on the Arts.
This may be an art symposium or combination lecture/demonstration
series, feature notable local/regional artists in different media and include
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 46
a local culinary arts/wine component. The purpose is to raise awareness
and reinforce Lake Oswego’s stature as a center for the arts and to
attract more regional visitors.
Implementation Roles and Responsibilities
Successful business development programs for small and large cities alike have
the following key organizational elements in common:
• Public-private partnership where goals, responsibilities, commitment and
funding are shared through a unified game plan and common vision.
• A clear delivery system for ongoing market education, target marketing
and sales. Among the stakeholders involved are the City, developers,
established businesses, residents, lenders, entrepreneurs, regulators and
• The capacity to follow-through on work plans is well established. The most
creative marketing and sales efforts will not succeed without continuous
follow-through and systematic adjustment to the market and business
targets, which are in constant motion.
The City of Lake Oswego recognizes the importance of economically thriving
and livable commercial districts and recently hired an Economic Development
Manager who will devote substantial time and energy to this vision. The City also
understands the value and importance of partnerships and during the course of
this project has worked closely with the Strategic Business Alliance, Lake Oswego
Chamber of Commerce, Lake Grove Business Association and the Downtown
Business Association. A successful business development and marketing effort will
depend upon continued partnership among these stakeholders.
Implementing a successful economic development and marketing program is a
complex task. This is especially true for Lake Oswego’s commercial areas where
there are a variety of developments, public and private players and community
entities influencing the type and speed of change. To help clarify how roles and
responsibilities are typically divided and shared between government and
business, the following flowchart provides an overview of who should do what,
with some overlapping activities. The Marketing Team identified refers to the ad
hoc group referenced in Customer Attraction, Action 2. Its role could include
business development coordination activities as well. (Please see the diagram in
Exhibit 6.6 on the following page.)
Lake Oswego Market Analysis & Business Development Plan ♦ Business Development Plan 47
Business Development Roles & Responsibilities
Lake Oswego is fortunate to have several public and private/nonprofit
organizations with engaged leaders eager to move the business and marketing
plan forward. Preliminary recommendations on who should champion what
actions are outlined below. It is assumed that action team leaders will
collaborate with multiple stakeholders to accomplish the task. The timeline
provides recommendations on overall priorities for action in six-month increments
and when work should begin on key steps.
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