Many have asked if a gas station (and retail shops) can survive at 8562 Lafayette Road. In this post, we hope to provide you with some of our research to help you draw your own conclusions. As an outline for our research, we came across a list of gas station & convenience store “site essentials” published by the Appraisers Journal (Publication date 1/1/2012). As part of the “site essentials”, it included the site selection criteria from ExxonMobil. While we believe the proposed gas station at 86th & Lafayette Road will be a Shell gas station, it provides insight into the types of things that should be evaluated prior to building a gas station. Here is the overview of the ExxonMobil site criteria:
ExxonMobil Site Criteria
Not every site is suitable for retail fuel sales, and major oil companies such as Chevron, Shell, and ExxonMobil have established minimum criteria that must be met before sites can carry their brands. These site selection criteria are established to help retail operators select economically viable sites. Brand identity and protecting their brand’s public image are important to oil companies. When a retail store affiliated with a nationally recognized brand fails, the oil company’s image is tainted and the public associates the brand with failure.
The specific site selection criteria used by ExxonMobil are listed here to provide an example of how oil companies evaluate potential sites:
- Exclusivity of trade area–A trade area’s supply and demand profile is a key factor in site selection.
- High traffic counts–There should be 20,000 vehicles passing by the convenience store each day.
- +56,000 net usable square feet–The company will consider less square footage for stores in metropolitan markets.
- Residential density–There should be 15,000 existing or planned residences within a 1.5-mile radius.
- Excellent visibility–The site must be visible from one-third of a mile away.
- Excellent accessibility–There should be convenient ingress and egress from both primary and secondary streets.
- Signalized corner intersections–Ideally, stores should be located at four-corner sites.
- Absence of operating restrictions–A store should be open 24 hours a day, seven days a week, sell beer and wine, and have a car wash.
Let’s go through each of the criteria mentioned to see how the proposed gas station at 8562 Lafayette Road would compare:
Exclusivity of trade area–A trade area’s supply and demand profile is a key factor in site selection.
There are many aspects to discussing the supply and demand profile for this location.
Proximity of other gas stations. The first point to consider is the proximity of other gas stations in the area. While the nearest gas station is around 2 miles away, there are over 30 gas stations within approximately 5 miles of the proposed location. (Source) However, with most in the neighborhood either commuting to Indianapolis, Carmel or Zionsville there are gas stations just seconds off the interstate in all directions. For example, those commuting to & from downtown they will often stop at the Lafayette Road exit where there are 3 gas stations right off the exit. The additional competition those locations provide helps to keep the prices low & more attractive to consumers. Because the proposed gas station is several miles away from the interstate exits (in 3 directions), they should expect very little traffic from the interstate. Additionally with only two underground storage tanks, the fuel options would be more limited than at other nearby gas stations.
Retail Shops. 3 Retail shops are being planned for the first phase of this construction with 7 in the final design. A quick drive along 86th Street & Lafayette Road show numerous retail spaces for lease/rent and they are in significantly higher traffic areas. For retail shops at 86th & Lafayette Road to be successful, they would need to give local residents a reason to not just drive a couple extra minutes for significantly more options.
Location. This property was zoned commercial before the Traders Point shopping center existed & when Lafayette Road used to be a major highway (before I-65). Since those developments, and the interstate bypassing this location, the commercial needs of the area have decreased significantly. The proposed gas station will be next to a $500,000+ home with over 6 acres. This is not a dense residential area. It has a very rural feel with low traffic. Gas stations have been tried in the area in the past and have not succeeded (even before the interstate).
High traffic counts–There should be 20,000 vehicles passing by the convenience store each day.
The proposed gas station is at the corner of 86th Street and Lafayette Road. The city was able to provide us with traffic data from 2014 at this location:
This shows that the average daily traffic (including both directions) is only around 5,800 cars on 86th Street. Any local resident would tell you that the traffic volume on Lafayette Road (even during the highest volume times) is significantly lower than 86th Street. Additionally most of the traffic comes primarily during the morning & afternoon rush hour. During the day, nights & weekends, traffic is extremely light. The 86th Street Traffic is only 30% of the minimum site criteria. If we are very generous with the estimated traffic on Lafayette Road (and say that it is roughly 80% of the volume of 86th Street), we would only be able to say that this location only has at most 50% of the minimum recommended traffic.
56,000 net usable square feet–The company will consider less square footage for stores in metropolitan markets.
There would be enough space on the property for a gas station. The property is 5.06 acres, however they are only planning to use 2.6 acres (which converts to 113,260 square feet) well exceeding the minimum usable square feet. However, it’s worth noting that around half of the property slops downhill towards Fishback Creek and a portion of the property is also in a flood zone which would be unusable.
Residential density–There should be 15,000 existing or planned residences within a 1.5-mile radius.
This is a little hard to gather data on since the radius doesn’t fit nicely into one zip code and is a rural area. Below is a graphic showing the 1.5 mile radius and zip code 46278. There are only 3,399 Housing Units/Residences (total population of 8,603) in the 46278 zip code. It is only projected to grow 0.87% the next 5 years. (source) A majority of homes are located in southern portion of the zip code (and very unlikely to use a gas station located at 86th & Lafayette Road). Additionally, most of the neighbors who live in the western portion of the zip code would be closer to the gas stations at 86th & 465 (near the Traders Point Shopping Center). The 46278 zip code appears to be the 2nd least least populated zip codes in Marion County (source). This corner of the city is rural & one doesn’t have to go far to find farm land.
Let’s say that 40% of the residences in 46278 (Traders Point) are within the 1.5 mile radius. That comes out to 1,360 (just 9% of the minimum residential density requirements).
Now, while the radius is one way to look at the data, one should have a better micro understanding of the local area in order to make a decision to locate a gas station at 86th & Lafayette Road. The radius largely ignores a portion of the traffic volume coming in from the west (Brownsburg, etc) to get access to the Interstate (via 65 or 465). We know from the traffic numbers provided by the city that there are around 5,800 cars that travel the road each day. Because it is measuring the average daily traffic, one could assume that each car is being counted 2x (one time on the way to work & another on the way home). We realize that is not 100% true for every car, but think that it is mostly true for the commuters. If we assume 1.5 commuters per residence we end up with 1,933 (5,800 / 2 / 1.5=1,933.33) additional residences to add to the total. It’s worth noting that Brownsburg’s population & households are only forecasted to grow at 1.8% the next 5 years (source).
That brings the total to 1,360 + 1,933 = 3,293 residences. While better, it is still only 22% of the minimum residential density requirements.
Here is a zip code map showing 46278 & Brownsburg. There are only a handful of neighborhoods along E County Road 1000 N with most of the land being agricultural.
Excellent visibility–The site must be visible from one-third of a mile away.
The site location does not provide excellent visibility. We would encourage anyone to take a drive and examine the planned location to draw your own conclusions.
Going North: Due to the trees & angle of the road, it is unlikely it will be visible from at least 1/3 of a mile away.
Going South: The gas station will have decent visibility from this direction and probably will be able to be seen from 1/3 of a mile away.
Going East: Due to the steep vertical curve & trees. The gas station will have very poor visibility from this direction.
Going West: This direction provides the gas station with their best visibility & will be able to see it from over 1/3 mile away.
Here are pictures of the Four Directions.
Looking South (From 1/3 Mile Away)
Looking North (From 1/3 Mile Away)
Looking East (From 1/3 Mile Away)
Excellent accessibility–There should be convenient ingress and egress from both primary and secondary streets.
Lafayette Road provides the best accessibility into the proposed site. In the site plans, it calls for another entrance to be built on 86th Street, over the natural gas pipeline and near the top of the steep vertical curve.
Signalized corner intersections–Ideally, stores should be located at four-corner sites.
The intersection does not have a signal & is a four way stop. There are no other commercial businesses at the corner (even though some of the other properties have been up for sale/lease for years).
Absence of operating restrictions–A store should be open 24 hours a day, seven days a week, sell beer and wine, and have a car wash.
Gurpreet Singh, the gas station developer, has stated that he does not plan to have the store open 24/7. There are no indications of a car wash from the site plans we have seen (a car wash would raise even more environmental concerns). However, he does plan to sell alcohol and tobacco if he can get the necessary permits.
One factor that is not included in the ExxonMobil minimum site criteria is community support. With the very limited customer base, community support should be very important. The community (who this proposed gas station seeks to serve) has come out strongly against it being located in their neighborhood with over 800 of the local residents signing a petition & hundreds turning out in opposition at a local townhall. Turning back today will be significantly cheaper than going out of business in a couple of years.
These are just some of the items to consider based on our research, local observation & and through conversations with local residents. We would welcome any additional pieces of information to improve the data we have collected. Please use the “Contact Us” form & don’t hesitate to point out any errors in our research or provide us with new information. Please use this information to draw your own conclusions about the viability of a gas station at this location.