Johnson Consulting - Real Estate Consulting

Project Highlights

  • Retail space analysis
  • Economic and employment impact analysis
  • Tax increment finance projections
  • Subsequent expansion analysis

 
The Cordish Company, a developer, was planning to renovate the Galleria mall in downtown Louisville, which included approximately 266,000 gross square feet, into an entertainment and retail attraction called “4th Street Live!”. The Cordish Company applied for the KTDA tax refund to the Kentucky Tourism Development Cabinet (Tourism Cabinet). The KTDA statute requires that an independent consultant evaluate a project’s eligibility under the KTDA. Our report was commissioned to determine whether the development met the requirements, such as generating net fiscal impact, net economic impact, and net employment impact.

Due to its location, the project was within walking distance of most of downtown Louisville’s business, leisure and natural assets. The Galleria had the characteristics of a failed urban mall project, including large empty public spaces, dark and small corridors, outdated and worn interior finishes, empty tenant spaces, and a predominance of smaller, non-unique stores catering to the downtown office population. In response to the poor performance of the Galleria, its prime location, and the lack of retail and entertainment in downtown, the City began negotiations with the Cordish Company to redevelop the retail portion of the property into an urban entertainment and retail attraction.

We performed the following analyses for the project:

    • developed projections of the proposed project’s future performance under two scenarios: the existing Galleria’s performance if not renovated, and the performance of the 4th Street Live;
    • analyzed the retail market,
    • estimated the direct spending impacts of the project in Kentucky, including the spending on the redevelopment of the project,
    • estimated the indirect and induced economic and employment impacts of the project, using the IMPLAN input-output model for the Commonwealth of Kentucky, and
    • estimated the fiscal impacts of the project, including sales, income, and property taxes.

 

The project has opened and is exceeding expectations.