HomeMy WebLinkAboutEconomic Impact AnalysisHURRICANE
COVE MARINA
Economic Impact Analysis
Submitted to:
City of Miami
Prepared For:
BALBINO INVESTMENTS, INC.
Prepared by:
SHARPTON, BRUNSON & COMPANY, P.A.
One Southeast Third Avenue
Suite 2100
Miami, Florida 33131
(305) 374-1574
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HURRICANE COVE MARINA
TABLE OF CONTENTS
PAGE(S)
THE PROJECT OVERVIEW 1
EXECUTIVE SUMMARY
Introduction 3
Summary of Benefits 4
OBJECTIVES AND DEFINITIONS
Objectives 6
Definition of Economic and Tax Impact 6
Direct and Indirect Effects 6
Measures of Economic Impact 7
Description of Results 8
DISCUSSION OF THE RESULTS BY ECONOMIC INDICATORS
Impact Indicators 9
Results of Indicators 9
Impact of Construction 9
Impact of Ongoing Operations 10
Impact on Local Tax Revenues 10
Analysis by Economic Indicators 10
Employment 10
Wages 11
Output 11
Local Taxes 12
Public Sector Cost 13
Impact Fees 13
EXHIBITS
Exhibit I: Summary of Economic Impact
Exhibit 11: Impact and Other Fees
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Project Overview
Hurricane Cove Marina is located at
1884 NW North River Drive in the City
of Miami, Florida (the Project). The
Project consists of three (3) residential
buildings, a 130 slip marina, a
clubhouse and an existing building that
will be remodeled as a restaurant,
convenience store and ship's store.
The residential buildings contain 1,073
apartment units and there will be 1,721
parking spaces, The development
parcel is 204,069 square feet (4.68
acres) land area and 140,631 square
feet (3.23 acres) submerged land area
for a total of 334,700 square feet net lot
area. The gross lot area is 453,727
square feet (10.41 acres).
The proposed residential buildings
consist of three (3) structures. The first
building, type I, will be twenty-two (22)
residential floors over a six (6) story
garage. It will contain three hundred
twenty-five (325) units. In addition there
will be a one (1) story basement garage
level. The building will step back at the
third (3t) and eighteenth (18th) floor
from N.W. N. River Drive. On the Miami
River side the building will also step
back above the five (5) story garage.
The design incorporates a three(3) story
townhouse liner program at the garage
perimeter providing residential use at
the building base that will conceal the
parking garage, The first building, type
[ is located on the west end of tie
property.
The second building, type 11, will be
twenty (20) residential floors over a six
(6) story parking garage, It will contain
three hundred seventy four (374) units.
In addition there will be a one (1) story
basement garage level. The building
will step back at the third (3rd) and
eighteenth (18th) floors from N.W. N.
River Drive. The building will also step
back above the six (6) story parking
garage on the Miami River side. The
design incorporates a three (3) story
townhouse liner program at the garage
perimeter providing residential use at
the building that will conceal the parkingg
garage. This second building, type I[,
will conform to the shape of and will
occupy the center of the site.
The third building, type III, will be twenty
two (22) residential floors over a six (6)
story parking garage. It will contain three
hundred seventy four (374) units. In
addition there will be a one (1) story
basement garage level. The building will
step back at the third (3rd) and twentieth
(20t")floors from N.W. N. River Drive. The
building will also step back above the five
(5) story parking garage on the Miami
River side. The design incorporates a
three (3) story townhouse liner program at
the garage perimeter providing residential
use at the building base that will conceal
the parking garage. The third building,
type III, will occupy the east end of the
site.
The ground floor of each of the buildings
will contain the building lobby, building
service, trash room and loading areas.
The first three levels of the building base
will contain three (3) story townhouses to
line the garage perimeter. On N.W. N.
River Drive the remaining garage levels
will be lined with building amenities such
as clubrooms, exercise spaces, game
rooms and other social function spaces to
bring life and animation to the street
elevation. The remaining garage
perimeter will be lined, except where the
facade must be penetrated for building
service and garage entrances, with three
(3) story townhouses that will front on the
Riverwalk and the view corridors.
From the building base line on N.W. N.
River Drive above one hundred twenty
feet (120'-0), each building will step back
to follow the light plain required by the
zoning code. A series of loft units and
landscaped roof terraces will animate the
building as it steps back from the street.
These terraces will be amenities within the
building that will enrich resident's lifestyles
and provide architectural interest for the
adjoining neighborhood.
Located between the front residential
facade and the three (3) story townhouses
units on the building perimeter will be the
parking garages, The garages will have
architectural elements harmonious with
the residential architecture to provide a
residential screen that will conceal parking
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Project Overview
located above and behind three (3) story
perimeter townhouses.
There will be a total of one thousand six
hundred ninety-six (1,696) garage
parking spaces and twenty-five (25) on
grade parking spaces at project building
out. Parking will be distributed
throughout the project to satisfy parking
requirements as each building is
completed. The roof of the parking
garages will provide landscaped pool
plazas facing the Miami River that will
form the base of each residential tower.
The pool plaza with its gazebos,
landscaping and pool will be the main
amenity of each building. The plaza will
provide a beautifully landscaped
environment from which to view and
enjoy the Miami River, Sewell Park and
the downtown Miami skyline. The three
(3) residential buildings will rise from
each of their parking podiums above the
pool plaza and step back from the River
front. This step back provides additional
separation from the River's edge and
creates an elevated green base for the
Residential structures. Atop each of the
three (3) buildings will be a beacon like
illuminated element that will screen
mechanical equipment and serve to
identify the area from 1-95 and SR 836.
The three (3) buildings will be
distinguished from each other by different
architectural treatment, the use of
different color glass, varying heights, and
different color shades. The main finish
elements will be stucco wall finish, glass
railing, colored metal roof and stainless
steel accessories.
At the east end of the property an
existing building will be remodeled to
house a ship's/convenience store and
marina front restaurant.
The building will be redesigned to
maximize view and interaction with the
new River walk, existing basin and new
park. A new private park will be
developed to provide daylight public
access to Miami River. The park will be
designed as a passive environment for
quiet enjoyment of the River.
Located in the park will be an obelisk to
provide visual interest and organize the
space. The park will serve as a front yard
for the park side townhouses located at
the base of building 111, and will be the
entry feature to the existing renovated 130
slip marina. The marina provides a
dynamic setback space averaging more
than two hundred (200) feet from the river
channel line to the project bulkhead. The
marina will preserve marine use on the
River.
Landscaped view corridors of 83' and 88'
in width have been integrated into the site
at the ground level between the three (3)
buildings. These view corridors increase
in width to 95' 0" and 122'-0" above the
podium between the residential towers.
The western view corridor has been
aligned with N.W. 19th Avenue. This
alignment will visually tie the view corridor
and 19th Avenue and will provide a direct
view through the project to the River. The
eastern corridor will provide view to the
River and access to the park and new
Riverwalk.
The private park will be bounded on the
south by a new Riverwalk. The Riverwalk,
though not required by the Miami River
Greenway Action Plan for the Middle
River, will be developed to provide access
to the marina and will provide boat ties
and docks as recommended by the Miami
River Action plan for development of the
Miami River Trail Blueway. In addition to
the Riverwalk and Blueway ties and dock,
a Riverside Trail will be developed on
N.W. N. River Drive for bicyclists and
pedestrians. These privately developed
amenities will be available for
neighborhood use during daylight hours
as a place for social gathering, recreation
and enjoyment of the Miami River. Such a
place is currently non-existent on the north
side of the river in the immediate
neighborhood.
The Project enjoys close proximity to all
major transportation arteries. Ramps to
the Dolphin Expressway (836) are just
minutes away making for quick access to
Miami Beach, Miami International Airport
and the Port of Miami.
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introduc
This document represents an in-depth
economic and tax benefits analysis of
the developmental and operation of a
first class condominium building and
retail facilities.
The Project currently contemplated is
comprised of the following
components:
❑ 1,073 units of high -quality
residential.
❑ 5,000 square feet of
retail/restaurant
❑ 1,721 parking spaces.
This analysis encompasses the
entire Project and estimates the
economic and tax benefits for
both its developmental and
operational phases.
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Summary of Benefits
The Project will bring significant
economic benefits to the city of
Miami (the City). This section
summarizes the impact of the
project on employment, public sector
revenues and other economic
benefits as a result of the
development.
Employment
Employment considerations include
the direct employment resulting from
the Project. Average developmental
construction phase employment will
be for approximately 262 employees
and the Project management is
expected to employ 35 people for
on -going maintenance and
operations of the facilities.
Wages
To compute the wages associated
with the new employment we started
with budgeted data directly related to
the developmental and operational
phases of the Project, and we
incorporated data from our research
on retail sales. Total direct and
indirect impacts expected from
wages associated with the new
development approximate the
following:
One Time $77,047,200
Annual $ 3,758,400
Tax Revenue
The estimate of the public sector
revenues associated with the
development includes taxes and
other revenues generated directly
by the Project. Although public
sector costs are important
elements in measuring fiscal
impact, these benefits have not
been quantified in this document.
This analysis only measures the
benefits derived from the
development. Annual tax revenue
expected to be created totals
$3,891,680.
Output
The estimate of total economic
impact is measured by total
output. This analysis measures
the economic impact of
developmental costs and ongoing,
operational excenditures. To
determine the elect of respending
within the City, we utilized a
multiplier to compute total direct
and indirect benefits. Total output
expected to be generated, as a
result of the developmental and
operational phases of the Project
will approximate the following:
One Time $ 219,461,211
Annual $ 8,080,560
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summary of Benefits
Significant Community Benefits:
• Jobs
• Wages
9 Taxes
➢ Economic Activity
Residents' Spending impacting Local
Businesses:
➢ Food
➢ Recreation/Entertainment
➢ Transportation
➢ Retail
The following table and charts summarize the economic impact of the Hurricane
Cove Marina development.
CONSTRUCTION
PERIOD ANNUAL
IMPACT RECURRING
Economic Activity Stimulated
Output $ 219,461,211 $ 8,080,560
Wages 77,047,200 3,758,400
Taxes 3,891,680
$ 296,508,411 $ 15,730,640
Jobs Created 262 35
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Objectives And Definitions
Objectives
The objective of this analysis is to provide
information on the various benefits
created by the Project and to prepare an
estimate of such benefits to the City.
Our analysis is based on an economic
model, which estimates economic and tax
impacts of various projects on a
designated area. The model is
specifically tailored to the City of Miami
(the City).
Definition of Economic and Tax Impact
The construction and subsequent
operation of the Project will create
important benefits within the City. These
benefits include new income, new jobs,
new tax revenue and new economic
activity impacting upon every sector of
the local economy. Moreover, through
the multiplier effect of respending and
reinvesting, indirect economic benefits
are added to the direct benefits brought
about by initial construction expenditures,
the expenditures from ongoing operations
and new spending at the retail
enterprises.
Direct and Indirect Effects
The total economic impact of public and
private projects and policies on a region
does not end with the impact from the
initial construction expenditures; the
continued benefits to the local economy
must also be considered. Income to firms
furnishing construction materials and
services is subsequently converted into
employee salaries, material purchases,
investment in plant and equipment,
savings, profits, purchases of services,
and a variety of other economic activities.
Income to laborers is subsequently
respent for purchasing of food,
housing, transportation, education,
entertainment, medical and dental
services, clothing, personal services,
and a wide variety of other goods
and services.
Furthermore, income to the
governmental unit is respent as
salaries, purchases, and support of
a variety of programs, including
education, transportation, and social
services. In turn, individuals, firms,
and governments furnishing these
goods and services again spend
their income for more purchases,
salaries, investments, and savings.
In this manner, indirect benefits
result each time the initial sum is
respent, and the additional sum
available in the local economy
induces further job creation,
business development and savings.
Quantification of these indirect
benefits has been the object of
considerable economic study.
Because economic relationships are
so complex in our modern society,
no single area or political unit is a
completely self-contained economic
unit. Therefore, purchases from
other areas and political units are
necessary, and goods services are
exported in return.
As purchases are made from other
units, some of the benefits of
economic respending are lost to the
local economy. Ultimately, a smaller
and smaller portion of the initial sum
would remain, until, after several
rounds of respending, an
insignificant sum is left.
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Objectives And Definitions
The indirect effects can be viewed as
a set of "ripples" in the economy.
Indirect, like direct, resources require
labor, materials, equipment and
services for their production to induce
further job creation and spending of
wages.
The "ripple" of the indirect effect
multiplies the original impact of the
purchase. The common measure of
the magnitude of the "ripple" effect is
called a multiplier. A multiplier
measures the total magnitude of the
impact on each particular economic
indicator as a multiple of the initial,
direct effect. For instance, a
multiplier of "1" would signify no
"ripple" effects as the total impact is 1
times the initial impact, while a
multiplier of "2" would imply that the
total impact is 2 times the direct
effect.
The actual magnitude of a multiplier
depends on the likelihood the goods
and services purchased in a region
would be produced in, or provided
from the region.
The model we used to estimate the
total economic impact incorporates a
multiplier developed by utilizing past
consumption and production patterns
in the City.
There will be significant economic
benefit derived from the expenditures
of the residents of the Project on
eating, drinking, grocery, recreation,
retail etc. This report does not include
the economic impact of such
expenditures.
Measures of Economic Impact
Various measures can be used to
indicate the impact of a policy or
project on a region. Specifically,
for this study, they are the
increases in local employment,
wages, tax revenue and output that
result. Definitions of these
measures are as follows:
Employment is measured full-time
equivalent jobs.
Wages include wages, salaries,
and proprietor's income only. They
may include non -wage
compensation, such as pensions,
insurance, and other fringe
benefits. Wages are assumed to
be expended by households in the
area at which the wage-earner
works.
Local taxes include additional
revenues from both ad valorem and
non ad valorem assessments.
Direct expenditures include those
sums expended for land
acquisition, site preparation and all
hard and soft costs associated with
a project.
Indirect expenditures are those
sums expended within the local
economy as a result of the "ripple"
effect described earlier.
Output describes total economic
activity, and is essentially
equivalent to the sum of direct and
indirect expenditures (exclusive of
wages and taxes).
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Objectives And Defi.nitions
Description of Results
For the purpose of describing the
total economic benefits of the
Project, the related expenditures
and economic activity stimulated
have been broken into two
categories:
Developmental
Annual Recurring
Developmental expenditures
include those expenditures related
to the design and construction
phase of the Project and related
amenities.
Annual recurring activities
stimulated are those expenditures
incurred in connection with the
ongoing operation of the Project,
and the sales and expenditures of
the retail enterprises leasing
space at the Project.
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Discussion Of The Results By Economic
Indicators
Impact Indicators
We measured the Project's impact on
four commonly used indicators of
economic activity.
Those indicators are:
Jobs
Wages
Total output
Local taxes
Results of Indicators
Exhibit 1 details the Project's direct and
indirect impact on the above economic
indicators for Miami. A summary of
such impact follows:
DEVELOPMENT
(One Time) OUTPUT
Direct
Indirect
ANNUAL
Operational:
Direct
Indirect
$ 116,784,382
102,676,829
$ 219.461.211
$ 4,300,000
3,780,560
8.080,560
The economic indicator most commonly
measured, and publicly reported on to
gauge the economic impact of a public
project is output. The impact of a
project on the indicator output is often
referred to as the project's economic
impact.
Impact of Construction
The site preparation and construction
expenditures, including soft costs and
impact fees are estimated at $145
million. Such activity will create
approximately 262 new full time
equivalent jobs and employ a maximum
of 300 workers during peak periods.
The workers will earn approximately
$41 million in direct wages.
WAGES TAXES EMPLOYMENT
$ 41,000,000
36,047,200
$ 77.047.20Q
262
262
$ 2,000,000 $3,891,680 35
1,758,400
$ 3,758,400 $3,891,680 35
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Discussion Of The Results By Economic
Indicators
Impact of Ongoing Operations
As a result of the on -going operation and
maintenance of the Project, Miami will
gain approximately 35 new, permanent,
full-time equivalent jobs. The wages of the
workers who obtain these positions will
provide an impact of approximately $3.8
million annually.
The total expenditures for the Project's
operations, will provide a new, permanent
impact of $8.1 million annually to the
City's economy. This impact consists of
the effects of the direct expenditures from
the maintenance, security and day-to-day
operation of the Project, and the multiplied
effects of such spending thus creating
indirect benefits.
Impact on Local Tax Revenues
As a result of the construction and
operation of the Project, various state, city
and city governments and agencies would
gain an estimated annual tax benefit of
$3.9 million.
Analysis by Economic Indicators
Our analysis of the economic and tax
benefits of the Project was done by each
major phase of the Project. We identified
the major phases to be developmental
and operational.
This analysis determines the economic
benefits to the City by identifying such
benefits for each of the phases.
The effects on economic indicators
used to measure benefits
(employment, wages, output and
taxes) were computed for each
phase.
Employment
Employment is one of the most
important economic benefits of the
Project. It is one of the most
accessible and direct benefits for the
City's residents and it's residents and
is a primary means by which
developmental, operational and
maintenance expenditures generate
indirect economic benefits. A portion
of this employment occurs on -site as
a result of new spending at the retail
enterprises, and a portion is derived
from on -going operations of the
Project. Further employment is
generated off -site by the expenditures
of employees of the Project and
businesses located in the Project, at
area businesses.
As can be seen in Exhibit I, total
short-term (developmental)
employment will average 262
employees over an seventy-two
month period and a total on -going
employment will average 35.
The total on -going positions can be
summarized as follows:
• Management
• Security
• Parking
• Maintenance/Facilities
Retail
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Discussion Of The Resu
Indicators
�s By Economic
Wages
The analysis deemed wages are a direct
by-product of employment. As discussed
in the above section, both on -site and off -
site jobs are created. There were both
temporary and permanent in nature.
To compute the wages associated with
the new employment we started with
budgeted data directly related to the
developmental and operational phases of
the Project.
Employment, such as construction related
employment, was obtained directly from
construction estimates. These numbers
were tested for reasonableness,
Output
The output generated, as a result of the
development and operations of the
Project, is caused by the following type of
expenditures
• Development costs expended in the
City (100%)
• Annual operational expenditures of
management company
• New spending in the locality by
employees of businesses
located in the Project
To incorporate the impact of dollars
being respent and/or reinvested in the
City, a multiplier was applied to total
direct output. A multiplier of 1.8792
was used to determine total direct
and indirect output created by the
Project. This multiplier indicates that
for every $100 spent in Miami,
another $187.92 will be respent or
reinvested in Miami. This multiplier
was obtained from the Dade City
Planning Department.
Direct output from the developmental
phase of the Project is primarily a
result of developer costs. These
costs include land acquisition, site
preparation and soft and hard costs
relating to the Project's construction.
To determine the total output we
determined what development costs
were expected to be or had been
spent in Miami.
Total direct output during the
development phase is $117 million.
Total indirect output created by the
direct responding in Miami is $103
million. Thus total Miami Output from
the development of the Project is
$220 million.
The final component of output results
from the direct operating expenditures
of the Project, and the indirect
benefits created as a result of the
multiplier effect on direct output.
The Developer provided us with an
annual operating budget for the
Project. An overall assumption was
made that all expenditures would be
spent initially in the City.
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Discussion Of The Res. ults By Economic
Indicators
Output (Contd.)
The total operating expenditures
incorporate all estimated expenses of
the ongoing operation of the Project.
The impact of the retail enterprises
was measured separately as an
economic indicator.
To incorporate the potential
respending and reinvesting in Miami,
the multiplier effect was measured.
By applying a multiplier of 1.8792 to
the total direct output from operating
expenditures and the retail
enterprises, we determined total
output (direct and indirect) from on-
going operating expenditures and
retail sales.
Local Taxes
A key and significant benefit
generated from the development and
operation of the Project is taxes.
Several types of tax revenue will be
generated from this project including
ad valorem taxes. Specific ad
valorem taxes include real and
personal property taxes. Other taxes
include occupational taxes and
community development taxes.
New real property taxes will be
assessed on the Project. The
assessment is based on a
predetermined mileage rate being
applied to the taxable value of the
real property. We computed real
property taxes for the developmental
phase based on the cost of the
development of the Project.
This assessment base is very
conservative since tax on real
property typically is assessed on
appraised values and not actual
cost.
The basis for ongoing taxes is also
overall cost. The mileage rate was
obtained from the City Tax
Collectors office relative to the
Project's location. The projected
annual real property taxes are
approximately $3.9 million.
Total ad valorem taxes assessed
by Miami -Dade County are
allocated based on mileage rates to
certain governmental entities.
Listed below is the allocation of
projected tax revenue.
City Operating
School Operating
County Operating
Debt Service - City
Debt Service -County
South Florida Water
Library Operating
School Debt Service
Florida Inland Navigation
Environmental Projects
Children's Trust
TOTAL
$ 1,266,841
1,217,036
862,970
156,141
41,204
86,312
70,264
98,600
5,566
14,458
72,288
$ 3,891,680
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Discussion Of The Results By Economic
Indicators
Local Taxes (Contd.)
Although not quantified, the City, through its
receipt of allocated state sales taxes will
receive an additional benefit as a result of the
development and operation of the Project,
and from the retail enterprises.
Public Sector Costs
Impact fees
Very significant factors in measuring the
economic impact on a specific region of a
project are impact and other required
development fees. A summary of these fees
are listed below:
• City of Miami Developmental Impact Fee
• City of Miami Developmental Admin Fee
• Miami -Dade County Roadway Impact Fee
Miami -Dade County School Impact Fee
Building Permit Fee
> Installation Energy Fee
> Other Fees
For the purpose of this economic impact
analysis, fees are included as a part of the
direct development cost (output). Impact fees
total approximately $3.4 million and other
fees total approximately $2.1 million. These
fees are shown in detail in Exhibit II.
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Exhibit List
Exhibit I
Exhibit II
Summary of Economic Impact
Impact and Other Fees
Exhibit -
OUTPUT
WAGES
EMPLOYMENT
TAXES
DIRECT
DEVELOPMENTAL
OPERATIONAL
TOTAL DIRECT
$
116,784,382 $ 41,000,000
4,300,000 2,000,000
262
35 $ 3,891,680
121,084,382 43,000,000 297 3,891,680
INDIRECT
DEVELOPMENTAL 102,676,829 36,047,200
OPERATIONAL 3,780,580 1,758,400
TOTAL INDIRECT
TOTAL BENEFITS
TOTAL DEVELOPMENTAL
TOTAL OPERATIONAL
106,457,389 37,805,600
$ 227,541,771 $ 80,805,600 297 $ 3,891,680
219,461,211 $ 77,047,200 262
8,080,560 3,758,400 35 $ 3,891,680
TOTAL BENEFITS $ 227,541,771 $ 80,805,600 297 $ 3,891,680
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Exhibit II
IMPACT AND OTHER FEES:
A. Development Square Footages:
1) Total gross building area (with parking)
2) Maximum development area (FAR)
3) Gross parking area
B. Impact Fees:
Square Footage
1,498,060
1,110,091
481,970
Amount
1) City of Miami Developmental Impact Fee $ 818,767
2) Developmental Impact Administration Fee 24,563
3) Miami -Dade County Roadway Impact Fee 1,004,328
4) Miami -Dade County School Impact Fee 1,533,751
Total of all Impact Fees $ 3,381,409
C. Non -Impact Fees:
1) Miami Dade W.A.S.A. "connection fees" $ 1,500,054
2) Building Permit Fee 287,478
3) Installation Energy Fee 149,806
4) Major Use Special Permit Application Fee 30,000
5) Miami -Dade County Code Compliance 60,000
6) Radon Gas Fee 7,490
7) Fire Plan Review Fee 14,232
8) Ground Cover Fee 1,123
9) Land Use/Zoning 3,445
10) Zoning Review for Building Permit Fee 60
11) Certificate of Occupancy Fee 250
12) Application Fee 35
Total of all Non -Impact Fees $ 2,053,973
Total of all Fees for Project $ 5,435,382
Source: City of Miami Planning, Building and Zoning Department.
Miami Dade County Impact Fees
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