HomeMy WebLinkAboutP. Economic Impact Study and Environmental Impact AnalysisMay 28, 2008
Mr. David Podolsky
Brickell Square, LLC
Brooklyn, N.Y.
Re: MUSP Impact Analysis — La Quinta y Ocho
Dear Mr. Podolsky:
Miami Economic Associates, Inc. (MEAT) has performed analysis to estimate the fiscal
and economic benefits that the La Quinta y Ocho mixed-use project, which is proposed
for development at 504 S.W. 8th Street, will provide to the City of Miami. This letter,
which is organized as shown below, provides the findings of our analysis and their
bases:
Section
Page
Project Description
1
Summary of Findings
2
Impact on the Housing Market
2
Fiscal Benefits
2
Economic Benefits
3
Bases of Estimates
4
Closing
8
The analysis presented below is based on preliminary estimates of pricing and
construction costs. These estimates are subject to change based on market conditions
and cost parameters at the time development actually occurs and the changes may be
significant.
Project Description
The La Quinta y Ocho mixed-use project will be comprised of 232 condominium units
together with 20,173 square feet of office space and 20,946 square feet of retail space.
6869 S.W. 89th Terrace Miami, Florida 33156
Tel: (3051669-0229 Fax: (305] 669-8534 Email: meal nk0bellsouth.net
Mr. David Podolsky
Brickell Square, LLC
May 28, 2008
Page 2
Based on the anticipated sales prices per square foot for the residential units, gross
sales proceeds totaling approximating $100.0 million will be generated. The proposed
office and retail space are expected to lease for an average rate of $40 per square foot.
Construction of La Quinta y Ocho is expected to cost $67.9 million in hard costs. An
additional $12.2 million will be expended for soft costs inclusive architectural and
engineering fees, marketing, sales commissions, project overhead, etc. Accordingly, the
project will cost $80.1 million to develop exclusive of land cost and developer fees.
Summary of Findings
Development of the La Quinta y Ocho mixed-use project will be highly beneficial to the
City of Miami in important ways, as summarized below:
Impact on the Housing Market
City officials have long sought to attract new residential development to the various
neighborhoods of Miami to provide better market support for the retailers and food
and beverage establishments operating within them as well as to enhance the City's
tax base. Toward this end, the City Commission has recently approved a number of
new residential projects in the DuPont Plaza, River, Brickell, Brickell West and Omni -
Edgewater areas of the City. Approval of the proposed project, which will be located
at the junction of the Brickell West and Little Havana areas, is consistent with the
above -stated objectives.
Fiscal Benefits
• Fiscal Benefits refers to the positive impact that the proposed mixed-use project will
have on the finances of the City of Miami. The benefits that it will provide to the City
will be both non-recurring and recurring in nature as enumerated below. The
estimates shown, which are based on the current millage and fee rates, are 2008
Constant Dollars.
o Non-recurring Benefits
+ $ 120,557 in City building permit fees
• $ 10,000 in City solid waste surcharge fees
+ $ 42,652 in City police impact fees
• $108,375in City fire -rescue impact fees
• $ 61,073 in City general services impact fees
• $ 918,488 in City park impact fees
o Recurring Benefits
$ 627,791 annually in City General Fund ad valorem taxes
$ 49,674 annually in City Debt Service ad valorem taxes
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669-0229 Fax: (305) 669.8534 Email: meaink@6ellsouth.net
Mr. David Podolsky
Brickell Square, LLC
May 28, 2008
Page 3
o Non -Quantifiable
• Trade -related fees for roofing, electrical, plumbing, mechanical, pool and
elevator work performed during construction (non-recurring)
• Increased City utility taxes and franchise fees (recurring)
• Increased occupational license fees (recurring)
• Increased parking surtax revenues (recurring)
• Increased revenue sharing funds (recurring)
o Other
While the focus of MEAI's fiscal analysis was on the City of Miami, La
Quinta y Ocho will, as shown below, provide significant fiscal benefits to
other non -municipal governmental jurisdictions that impact the lives of
City residents:
o $
279,861 in County road impact fees (non-recurring)
o $
338,220 in School impact fees (non-recurring)
o $
393,846 in County General Fund ad valorem taxes (recurring)
o $
24,510 in County Debt Service ad valorem taxes (recurring)
o $
36,318 in Children's Trust ad valorem taxes (recurring)
o $
33,041 in County Library ad valorem taxes (recurring)
o $
65,020 in School Operating ad valorem taxes (recurring)
o $
32,508 in School Debt Service ad valorem taxes (recurring)
o Increased
County occupational license fees (recurring)
o Increased
revenue sharing funds
Economic Benefits
• Economic Benefits relates to the positive impact that the proposed mixed-use project
will have on the economy of the City rather than its finances. The economic benefits
it will provide will also be non-recurring and recurring in nature.
o Non-recurring
• Approximately 90 percent of the $80.1 million that will be spent on hard
and soft costs to develop the proposed mixed-use project will be spent
within the City of Miami, producing an overall economic impact
approximating $112.0 million when the multiplier effect is considered.
Project expenditures within the City of Miami will include an estimated
$30.6 million for construction labor, an amount sufficient to pay
approximately 588 construction workers, some of whom may be City
residents, their average annual wage of $52,000.
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669.0229 Fax: (305) 669.8534 Email: meal nk@bellsouth.net
Mr. David Podolsky
Brickell Square, LLC
May 28, 2008
Page 4
o Recurring
A total of $4.9 million will be spent annually in within the City of Miami by
residents of and workers at La Quinta y Ocho in retail and food and
beverage establishments, Additionally, $1.85 in ad valorem taxes will be
paid to the City of Miami, Miami -Dade County and the School Board, all of
which maintain their principal offices within the City. These expenditures
will have an overall economic impact on the City of $10.3 million annually
when the multiplier effect is considered.
A total of 150 people will be employed at the proposed project. These
workers, who may include City residents, will earn approximately $5.7
million annually.
Bases of Estimates
The materials that follow provide the assumptions used to estimate the fiscal and
economic benefits that development of the La Quinta y Ocho mixed-use project will
provide to the City of Miami. All monetary values are stated in 2008 Constant Dollars.
Project Characteristics
• La Quinta y Ocho will be located within the City of Miami as well as the jurisdictions
of Miami -Dade County and the Miami -Dade County Public School District.
The project will entail the construction of 534,236 gross square feet of building area.
Of this amount, 260,184 square feet will pertain to the residential portion of the
project, which will be comprised of the 232 condominium units as well amenity and
circulation areas. Of this quantity, approximately 211,000 square feet will be
saleable. The remaining 274,079 square feet will be comprised of the office and retail
space and parking.
+ La Quinta y Ocho will cost approximately $67.9 million to construct in terms of hard
construction. Soft costs including those relating to professional fees, marketing, sales
commissions, permit fees, developer overhead, administration, etc. will total an
additional $12.2 million. Therefore, $80.1 million will be spent to develop the project
exclusive of land acquisition costs and developer's fees.
• Sales of the project's 232 condominium units are expected to generate
approximately $100.0 million in sales proceeds.
+ According to the Constitution of the State of Florida, real property is supposed to be
assessed at 100 percent of its market value. As a practical matter, condominium
units and commercial space are initially placed on the tax rolls at approximately 80
percent of their market value, or in this case $80.0 million. Assuming that
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net
Mr. David Podolsky
Brickell Square, LLC
May 28, 2008
Page 5
approximately 75 percent of the residential units qualify for the Homestead
Exemption, the taxable value of the residential portion of project will be $75.7 million.
Based a review of assessment values for comparable retail and office projects, it is
estimated that the 41,119 square feet of combined office and retail space will have
an assessed and taxable value approximating $10.3 million.
• The total estimated value of the La Quinta y Ocho project will be $86.0 million.
Residents of the proposed condominium units will on average require an annual
income approximating $140,000 to qualify for ownership. Based on this estimate of
average household income, it is projected that the people living at the proposed
project will spend $6.4 million annually in retail and restaurant establishments. This
projection assumes that they spend approximately 20 percent of their income for that
purpose.
Based on industry averages relating to employment per 1,000 square feet, it is
estimated that 52 people will be employed retail space proposed for development at
La Quinta y Ocho and 81 in the proposed office space. When project's operations
maintenance and service personnel are accounted for, total employment at the
project will approximate 150 people. These workers are expected to spend a total of
$455,000 annually in restaurants and shops while working.
Non-recurring Fiscal Impacts
The City of Miami charges building permit fees at a rate of $0.20 per gross square
foot of multi -family residential construction and $0.25 per gross square foot of
commercial construction. In calculating fees, the square footage associated with
parking garage space is charged for at the commercial rate. Based on the
distribution of space by use previously discussed, building permit fees totaling
$120,557 will be paid for the La Quinta y Ocho project. A solid waste surcharge fee
in the amount of $10,000, the maximum amount, will be applied.
The various trades involved in completing the La Quinta y Ocho project including the
roofing, electrical, plumbing, mechanical, elevator and swimming pool contractors will
be required to pay fees on their work. Calculation of the fees that they will pay
requires that the project's final engineering drawings be completed, which has not
yet occurred. Accordingly, the fees that will be paid can not be quantified at this time.
A solid waste surcharge is applied to these fees.
The City of Miami charges impact fees on new construction projects. On high-rise
units, fees will be paid on a per unit basis in the amounts of $95 for police, $409 for
fire -rescue, $239 for general services and $3,959 for parks. The rates for retail space
in the quality proposed are paid on a per square foot basis in the amounts of $0.751
for police, $0.302 for fire -rescue and $0.126 for general services. The rates for office
space in the quality proposed are paid on a per square foot basis in the amounts of
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel. (305) 669-0229 Fax: (305) 669-8534 Email: meal nkQbellsouth-not
Mr. David Podolsky
Brickell Square, LLC
May 28, 2008
�. Page 6
$0.242 for police, $0.355 for fire -rescue and $0.148 for general services Impact fees
totaling $1,116,482 will be paid on the La Quinta y Ocho mixed-use project, of which
$42,652 will be for police, $108,375 for fire -rescue, $61,073 for general services and
$918,488 for parks.
New construction projects located in the City of Miami also need to pay impact fees
to Miami -Dade County for roads and schools. In the eastern portion of the county,
the rate for roads for condominiums is $877 per unit. The road impact fee rates for
retail and office in the eastern portion of Miami -Dade County are $1.255 and $2.484,
respectively, per square foot for projects with the quantities of space proposed at La
Quinta y Ocho. The base fee per unit for school impact fees is $612. An additional
amount of $0.918 per square foot is then applied. Accordingly, impact fees totaling
$611,076 will need to be paid at the time the building permit for the proposed project
is issued. Of this amount, $279,861 will be applied to roads and $338,220 to schools.
Recurring Fiscal Impacts
The millage rates currently being levied for ad valorem tax purposes by the
governmental entities referenced in the Summary of Findings are shown in the table
immediately following. The ad valorem tax revenues projected in the Summary of
Findings were calculated by applying the millage rates shown to proposed project's
estimated taxable value of $86.0 million.
Entity
Rate/$I 000
Taxable Value
Taxes
City of Miami
General Fund
7.2999
$ 627,791
Debt Service Fund
0.5776
$ 49,674
Miami -Dade Count
General Fund
4.5796
$ 393,846
Debt Service Fund
0.2850
$ 24,510
Children's Trust
0.4223
$ 36,318
Library
0.3842
$ 33,041
Miami -Dade County Public Schools
Operating
7.5700
$ 651,020
Debt Service
0.3780
$ 32,508
Source: Miami -Dade County Property Appraiser; Miami Economic Associates, Inc.
The City of Miami collects utility taxes and franchise fees from the providers of
telephone, electric and other such services based on their revenues. The amount
collected as a result of the development of La Quinta y Ocho will be dependent on
the amount of these services used by the project's residents and commercial
tenants; hence, it can not be quantified at this time.
Both the City of Miami and Miami -Dade County will collect occupational license fees
from the occupants of the proposed office and retail space. The amount collected
can not be estimated at this time since it will be dependent on the nature of the
businesses housed in the office and retail space.
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669.0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net
Mr. David Podolsky
Brickell Square, LLC
May 28, 2008
Page 7
The City of Miami applies a surtax of 20 percent surtax to all parking charges. The
tenants and patrons of the proposed project's retail space and the tenants of its
office tenants and their visitors will pay this surtax. The amount of surtax revenues
that will be generated can not be estimated at this time.
The City of Miami and Miami -Dade County participate in a number of revenue
sharing programs that are based on population -based formulas. The amounts of
revenue sharing revenues that will accrue to the City as a result of the proposed
project can not be estimated at this time.
Non-recurring Economic Benefits
It is estimated that approximately 90 percent of the $80.1 million that will be spent on
the hard and soft costs to develop La Quinta y Ocho will initially be spent in the City
of Miami. This estimate is based on an anticipation of the specific firms that will be
involved in implementation of the project. According to the input-output model of
Minnesota IMPLAN Group (MIG), which is one of the nation's foremost econometric
firms, the overall economic impact of these expenditures will approximate $112.0
million based on application of a 1.554 multiplier.
MIG's input-output model further estimates that approximately $30.6 million of the
moneys spent on hard costs within the City of Miami will be spent for labor. The
average• construction worker in Miami -Dade County currently earns approximately
$52,000 per year according to the Florida Agency for Workforce Innovation.
Therefore, the project's expenditure on construction labor would support
approximately 588 workers, some of whom may be City residents, on an annual
basis at their average wage rate.
Recurring Economic Benefits
The residents of La Quinta y Ocho will spend $6.4 million annually in retail
establishments and restaurants, approximately 70 percent of which, $4.5, will be
spent within the City of Miami. The workers at the project will spend an additional
$455,000. Further, the project will generate approximately $1.85 annually in ad
valorem taxes for the City of Miami, Miami -Dade County and the School Board, all of
which maintain their principal offices within the City. According to the MIG input-
output model, the total economic impact of these expenditures will be $10.3 million
annually based on the application of a 1.5 multiplier.
Based on wage and salary data collected by the State of Florida Agency for
Workforce Innovation, it is estimated that the permanent 150 workers at the La
Quinta y Ocho project, come of whom will be City of Miami residents, will earn an
average of $38,300 annually, or $5.7 million in total.
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@hellsouth.net
Mr. David Podolsky
Brickell Square, LLC
May 28, 2008
Page 8
Closing
The analysis performed by MEAT demonstrates that the development of the La Quinta y
Ocho mixed-use project will be beneficial to the City of Miami both fiscally and
economically. It will also re -enforce the City's efforts to re-establish its core areas as
residential communities.
Sincerely,
Miami Economic Associates, Inc.
Andrew Dolkart
President
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669-0229 Fax: (305) 669.8534 Email: meaink@bellsouth.net
THE SPINNAKER. GROUP
501 SPINNAKER
WESTON, FL 33326
SrANNAER www.thespinnakergroupinc.com
(954) 347-0967
Fax (954)-217-3614
RE: La Quinta y La Ocho MUSP Application Date: April 8,2008
Environmental Impact Analysis Statement (EIAS)
To Whom It May Concern:
Alter review and consideration of the La Quinta Y La Ocho project MUSP application provided to me by
Bercow Radell & Fernandez P.A.,and prepared by Bercow Radell & Fernandez P.A., Chael Cooper and Associates,
Architects, Whitkin Design Group, Miami Economic Associates, Cathy Sweetapple and Associates, Consul -Tech
Engineering and Brickell Square LLC., dated June 2007, it is determined that the La Quinta Y La Ocho, 504 S.W. Wh
St. will have the following environmental impact on the immediate neighborhood. Based on the design elements and
potential impact of the development in the context of the environmental and social conditions of the study area, this
ELAS takes into consideration the following environmental issues: the economy, public services, environment and
housing supply within the immediate neighborhood.
A complete economic impact analysis provided by Miami Economic Associates is included in the MUSP
application, Tab P. In summary the report states that the fiscal benefits to The City if Miami and the increase in
employment opportunity as a measure of full time jobs, wages, local taxes, direct expenditures, indirect expenditures
and output generated by the project are determined to be a positive economic result of the proposed project. Please see
Tab P of the MUSP application for further analysis,
The Projects' relationship to traffic flow, pedestrian movement and transportation access is thoroughly
examined by Cathy Sweetapple & Associates and can be found under Tab N in the MUSP application. While all study
area corridors were found to operate at "acceptable levels of service" I believe it is import to consider the following
social and environmental concerns. By channeling redevelopment to urban infill areas, with existing infrastructure, the
impact on natural resources can be protected. Communities with at least ten basic services within a half mile radius
and in close proximity to bus lines and light rail, reduce the impact of vehicular traffic, improve productivity, alleviate
parking problems, and promote healthy levels of outdoor physical activity. The La Quinta Y La Ocho project could
promote public transit and alternative transportation use due to its close proximity to basic services, bus routes, the
metro mover and light rail system. The traffic study suggests road improvements will be required for the increased
density being requested for this project., Consider including bike lanes and bike routes as part of those improvements.
Bike lanes should be well marked, protected and provide direct access to transit corridors. A large number of people
are willing to use mass transit and alternative transportation if it is convenient and facilities are provided. This strategy
can potentially reduce the energy demand for transportation which would cut CO2 emissions and lessen the negative
effects of building high rise sites by reducing the need for single occupant vehicle use. Additionally providing
appropriate bicycle lanes, and accommodations can alleviate the traffic burden on existing roadways and infrastructure
well beyond the 2010 forecast provided for in the Traffic Study. Excess parking is being proposed by this project.
Providing the minimum amount of parking required by code will promote a more walkable community and encourage
ridership for alternative means of transportation. This project is requesting major zoning reclassification and density
increases. If this project were to provide alternative transportation access and appropriate community connectivity
through thoughtful roadway improvements, its design team, owners and the municipality would demonstrate great
social, environmental and community transformation.
In addition the projects 20,946 square feet of retail space and 20,173 square feet of office space are designed to
complement the 232 residential units by encouraging pedestrian activities and cultural usages which provide a sense of
community. This project should embrace a Live, Work, Play, philosophy in line with a "new urbanism" growth model.
The site is located at 504 S.W 8"' St.. Many basic services already exist in this community and focusing residential and
retail density here will promote community connectivity which allows for living, shopping. and working in close
proximity. In order to integrate this project into the community and encourage pedestrian activities, the design team has
considered exterior plazas and walkways that include native plant varieties and vegetative space, shade and breezeways.
Designing more native vegetation into the plaza and walkway areas will promote a connection between hardscape and
native habitat in order to maximize open space and restore native habitat. Some ground floor plaza areas are currently
in the design where sitting, socializing, meeting and walking will be possible.
The proposed site for La Quinta Y La Ocho is a previously developed site which is not considered prime
farmland, a greenfield, habitat for any species on the threatened or endangered species lists and is not within 100 feet of
Building Commissioning • LEEDTM Consulting elk,
SURGING C6M141IWON NG
THE SPINNAKER GROUP
D'iNNAkF
wetlands, or public park land. Since this site has been previously disturbed, damage to the environment is limited and
more sensitive land can be preserved. During the demolition phase of this project attention should be given to recycle a
significant percentage of the demolition debris. The developers' proposed plan exceeds the requirements for open
space. Using native plant varieties to increase the amount of vegetative open space will help restore habitat in the dense
urban surroundings of this project. One large mature oak will surely be impacted by construction. Removal and
relocation or reuse and mitigation should be required. Additionally one large, mature fruit tree and one large, mature
Royal Poincianna will likely be destroyed during construction removal and relocation or reuse and mitigation should be
required. The proposed landscaping plan appears to provide slightly more vegetation then required by code. As much
as possible native plant varieties should be encouraged to help protect and restore local habitat. A landscaped pool deck
which acts as the roof of the parking garage where 100% of the parking spaces are covered allows for a smaller building
footprint and also will reduce the urban heat island effect for a project of this size. It appears that some of the plants
being provided for landscaping are non natives and may require more water and maintenance then native or adaptive
varieties. The differences in temperature gradients between urban settings can be detrimental to habitat, wildlife and
migration corridors. This heat island effect can be further mitigated by using roofing materials and hardscapes with a
high solar reflective index. Site lighting can also have an impact on nocturnal environments for people as well as
wildlife and habitat. Reducing light pollution by limiting light trespass and up lighting can improve nocturnal
environments and provide greater access to the night sky. This can be done by thoughtful placement of permanent
lighting, such that it does not escape through windows, minimizing up lighting, using lower power densities then
recommended by ASERAE/ IESNA standards for exterior lighting, and by carefully designing site lighting that does
not escape the site boundary horizontally or into the night sky. The projects lighting plan has not been. review or
developed at this time.
The orientation of this project in relationship to the suns path across the sky lends itself to efficient energy use.
Energy modeling software can be used to compare proposed roofing materials, building orientation, glazing
characteristics, insulation values and energy systems, in order to determine the most efficient and cost effective means
for cooling the interior of the building while providing a product with high levels of comfort. Doing this will potential
lower energy costs as well. Allowing natural light to enter through the north facing facades and shading the south
facades can provide energy performance efficiencies which equate to operational savings for the owners and/or tenants
while reducing the projects carbon footprint. While no mechanical pians have been reviewed at this time the design
team is encouraged to use energy modeling software to predict the projects energy performance. Additionally
consideration should be given to using all energy star rated appliances for the residential portions of this project.
Stormwater will be managed with drainage wel is and catch basins designed to recharge the Biscayne Aquifer.
Sewage will be gravity feed to existing Miami Dade Water and Sewer Facilities for treatment. Contractors will be
required to adhere to an Erosion and Sediment Control Plan before groundbreaking in order to reduce pollution from
construction activities by controlling soil erosion, waterway sedimentation and airborne dust generation. Rain water
harvesting, and low flow flush and flow fixtures can be used to alleviate the increase demand on municipal water
service infrastructure for a project of this size.
The ability for tenants and residents to recycle workplace and/or household trash has not been provided for in
this project.
Issues pertaining to the supply of housing are addressed in the Project Description portion of the MUSP
application as well as within the Economic Analysis under the Tab P.
Regarding all environmental impacts associated with this project, it is my professional opinion that the
proposed development site is appropriate and has a favorable impact on economy, public services, environment and
housing supply within the immediate neighborhood. While developing the design for La Quinta Y La Ocho and
building on this site, consideration should be given towards using water efficiently, maximizing energy efficiency,
using environmentally appropriate materials, and monitoring indoor environmental quality. In this way the impact of
development upon our natural environment can be minimized and the performance of our built environment can be
maximized.
Sin rely,r
J ondt
DAP
The Spinnaker Group
Environmental Consultants
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