City of Morgan Hill Economic Blueprint.docx

RETAIL

Grow retail offerings and strengthen commercial nodes

The retail market provides many assets to community. Retail development supports community as well as quality of life within a neighborhood or city. When done well, retail can create great places, serve resident and business needs and be a catalyst for new investment. Retail is also an important source of General Fund revenue for the City through sales tax collection.

While retail plays a critical role in supporting a healthy local economy, demand for retail space is shrinking nationally and regionally due to competition with e-commerce and the consolidation of national retail brands. According to the real estate brokerage community that participated in the update to Morgan Hill 2035, Morgan Hill is considered 'over-retailed' relative to the size of its population. Moreover, the City

is located within the same trade area as Oakridge Mall in South San Jose and the Outlets in Gilroy, making it difficult for Morgan Hill to compete for new retail not represented in the market.

Given these dynamics, fostering successful retail and increasing the City’s sales tax revenues will require careful planning to concentrate retail in the most appropriate locations that are most likely to be successful (a strategy that is sometimes known as “retail pruning”). For example, the Downtown Specific Plan calls for the Morgan Hill Shopping Center on Dunne and Monterey in Morgan Hill to be redeveloped into a mix of housing and retail uses. Other shopping centers may need to be upgraded and updated in order to meet modern retailers’ space needs

Did you know?

As a category, Morgan Hill has a 31% general retail sales tax leakage

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