Loading...
HomeMy WebLinkAboutIII.4 - Economic Impact Study• • Economic Impact Analysis Submitted to: City of Miami Prepared for: McCAFFERY INTERESTS, INC. Prepared by: CONNOLLY ECONOMIC CONSULTING, INC. 3810 Durango St. Coral Gables, Florida 33134 (305) 446-3536 March 21, 2005 1 • • MIAMI RIVERTOWN TABLE OF CONTENTS PAGE(S) THE PROJECT OVERVIEW 3-4 INTRODUCTION 5 SUMMARY OF BENEFITS 6 ECONOMIC BENEFITS: DEVELOPMENTAL PHASE 7-8 Private sector benefits 7 Public sector revenues 8 ECONOMIC BENEFITS: OPERATIONS PHASE 9-10 Private sector benefits 9 Public sector revenues 10 REPORT SUMMARY 11-12 EXHIBITS Exhibit I: Impact and Other Fees — Developmental phase 13 2 • • Project Overview MIAMI RIVERTOWN ("The Project") is located at 1500 NW North River Drive in the. City of Miami, Florida. The Project is a mixed -use development consisting of retail, office, restaurant, residential, and parking uses. The project will consist of three towers to be built in three phases. The net lot area is 6.57 acres of a total 9.67 acres. The Project has approximately 860 feet of Miami River frontage. The Project comprises: > 1,060,073 GSF of residential units > 51,045 GSF of retail units > 98,129 GSF of office units > 1,866 parking stalls Phase I is a 35 story mixed -use tower with offices, retail space, parking and townhome units on the first seven floors, and residential units from the eighth to the thirty- fifth story. There will be 26 townhomes and 323 tower units, the latter ranging from studios to 3 bedroom units. Phase I will have 728 parking stalls. Phase II is situated due east of Phase I. This is a 34 story mixed -use tower with 241 studio and one bedroom units, and 62 one bedroom plus den or larger units. There will be 16,144 sq. ft. of retail and restaurant space. Phase II has 598 parking stalls. Phase III is a 34 story mixed -use tower due west of Phase I. It has 322 residential units, including 240 studios and one -bedrooms. There will be 8,825 sq. ft. of retail space and restaurant space. Phase III has 540 parking stalls. 3 • Project Overview Miami Rivertown is adjacent to the Civic Center and its hospital complex. The range and composition of residential units will provide access to the Project for the entire spectrum of the Civic Center employees - nurses and doctors, judges and lawyers, office workers and staff who currently commute up to an hour to reach their jobs. Miami Rivertown will have 1,866 projected spaces serving 985 residential units and 149,174 sq. ft. of combined office and retail space. Antunovich Associates of Chicago and Wolfberg Alvarez and Partners of Miami are the architects. The site has green areas of approximately 15% of the building area. The open area along the Miami River will contain a 10 foot public walkway. The river will be easily accessible to denizens of the Civic Center area via the two roads connecting to North River Drive. The Project is conveniently located in the downtown area just off Interstate 95 which provides access to Miami Beach and the surrounding area, including the Miami Civic Center, the Miami International Airport, and the Port of Miami. The University of Miami Jackson Memorial Hospital complex, including the Sylvester Comprehensive Cancer Treatment Center, and the Veterans and Cedars Hospitals are a short walk from Miami Rivertown — less than half a mile. • 4 • • Introduction This report assesses the economic impact during the development phase and the operations phase of the Miami Rivertown Project on the income and economic activity of the City of Miami. The study was performed using an economic impact software model: IMPLAN PRO 2. The IMPLAN model uses a dedicated input-output matrix from the City of Miami that provides multipliers for different categories of expenditure to estimate the "ripple effect" on income and employment on the region from a development such as Miami Rivertown. The report focuses on both direct and indirect increases in income and jobs resulting from Miami Rivertown. It also estimates ongoing expenditures and jobs resulting from the Project. Property taxes and impact fees are estimated directly from millage rates and impact fee coefficients provided by the City of Miami and by impact and other fee schedules by Miami -Dade County. 5 Summary of Benefits Miami Rivertown will yield material economic benefits, both to the private and public sectors of the City of Miami, in addition to playing a key role in revitalizing the Civic Center area. Developmental Phase: > Miami Rivertown will add $343 million in income to residents and businesses and create 2,675 jobs in the City of Miami during its development phase. > The Project will increase revenues to the City of Miami and Miami -Dade County by $6.4 million in permits and impact fees. Operational Phase: > Miami Rivertown will add, on an ongoing basis, $8.5 million in additional annual income to residents and businesses of the City of Miami and 173 jobs to residents. • The Project will yield an annual flow of public sector revenue to the City of Miami and Miami -Dade County of approximately $9 million. It is important to note that the present value of the ongoing income to residents and businesses in Miami is $134 million assuming a 6% discount rate over 50 years. Similarly, the present value of tax receipts to the public sector is $142 million. • 6 Economic Benefits: Developmental Phase Estimates of the economic benefits include both direct and indirect effects on incomes and economic activity, during the development and the operational phases of the Miami Rivertown Project. Our estimates suggest that during its development phase Miami Rivertown will create 2,675 jobs and increase income to residents and businesses in the City of Miami by $343 million. Of total income created, $93.5 million is in wages. Private sector benefits: Developmental Phase City of Miami Income and Employment Generated by Development Development Additional Economic Phase Direct Income Activity Total Income Phase 1 $79,718,088 $43,974,874 $123,692,962 Phase 2 $70,093,856 $38,640,382 $108,734,238 Phase 3 $70,958,018 $39,113,570 $110,071,588 Investment Total Employment 976 855 844 Total $220,769,962 $121,728,826 $342,498,788 Source: IMPLAN estimates. Note: Column two represents the planned development costs less the cost of funds of the three phases of the Project. Column three indicates the additional income to residents and businesses in the City of Miami estimated from the input output social accounting matrix of IMPLAN. Column four, the sum of columns two and three, indicates the total income contribution, both direct and indirect for the Miami Rivertown Project. 2,675 The City income multiplier for Rivertown is thus estimated to be 1.55 by IMPLAN — 342.5 divided by 220.8. The County or State income multiplier would be significantly larger. During the developmental phase, wages will directly increase by $43.5 million and indirectly by $50 million. Total wages will thus increase by $93.5 million. 7 Economic Benefits: Developmental Phase Public sector revenues Impact and other development fees are significant factors in measuring the economic impact on a community where a major use development takes place. These fees are charge for permits, zoning allowances, inspections certification, and one-time installation of services. Thus, they defray the anticipated extra costs of schooling costs to the community. Some of these fees are listed below:. > City of Miami Development Impact Fee > City of Miami Developmental Administration Fee > Downtown Development Supplemental Fee > Miami -Dade Country School Impact Fee > Building Permit Fee > Installation Energy Fee > Other Fees A summary breakdown is as follows: D EVELOPM ENT I M PACT FEES (City of M iami) D EVELOPM ENT I M PACT FEES (Miami -Dade) NON-IM PACT FEES (M iami-Dade Planning & Zoning) $1,299,923 $2, 792, 767 $2, 290, 715 Total $6,383,406 Source: Miami -Dade County, Impact and other Fee Schedules for the Department of Planning and Zoning. City of Miami Development Impact Fee Coefficients, Sec. 13-11, City of Miami Municipal Code. Exhibit I, p.13 lists these fees in detail. • • Economic Benefits: Operations Phase The ongoing operations of Miami Rivertown will generate income and employment on the site directly through retail and restaurant businesses, maintenance, personnel and management. In addition, increased expenditures by these businesses and personnel will create indirect income and employment of vendors of goods and services to Miami Rivertown. Of the $8.5 million total income generated on an ongoing annual basis, $3 million is in new wages. Private sector benefits: OperationsPhase Economic Impact of Ongoing Operations Direct Indirect Total Income $5,230,003 $3,246,149 $8,476,152 Employment 134 39 173 Source: IMPLAN estimates. It is important to bear in mind that these increments to income and employment in the City of Miami are realized on an annual basis. They are a flow rather than a one-time gain. To put it differently, were these annual flows of income discounted by 6% over the next fifty years, their present value would be $134 million. In other words, the cash available to residents and businesses of the City of Miami would increase by $134 million at the onset of operations. Similarly, the increase of 173 jobs is permanent and assured year over year. 9 411 Economic Benefits: Operations Phase Property and other taxes Currently, this property is not on the tax roll because the Mahi Shrine is tax-exempt. Consequently, the Project will yield a new ongoing stream of annual tax revenues to the community. First and foremost will be the creation of new annual property taxes levied. These taxes will be paid based on millage rates of the assessed values of the properties. Here, the applicable millage rates are applied to the expected sales value of the property, $332,991,870 yielding the following allocation of projected annual property tax revenue: Public sector benefits: Operational Phase PROPERTY TAXES: MIAMI RIVERTOWN 1 City Operating $2,902,440 2 City Miscellaneous $166,496 3 School Operating $2,693,904 4 County Operating $1,976,307 5 Debt Service - City $316,342 6 Debt Service - County $94,903 7 South Florida Water $198,796 8 Library Operating $161,834 9 School Debt Service $198,796 10 Florida Inland Navigation $12,820 11 Environmental Projects $33,299 12 Children's Trust Fund $147,915 Total $8,903,853 Source: City of Miami, 2004 Adopted Millage Chart. Once again, it is important to bear in mind that these are an ongoing flow of annual tax revenues throughout the operational phase. Put differently, revenues of $9 million annually for 50 years would have a present value to the public sector of $142 million at the onset of Rivertown operations at a 6% discount 10 rate. • • Report Summary The economic benefits of Miami Rivertown can be broken down into the developmental phase and the operational phase. Developmental Phase: • Miami Rivertown will add $342 million in income to residents and businesses and create 2,675 jobs in the City of Miami during its development phase. Wages will increase $93.5 million. • In addition, the Project will increase revenues to the City of Miami and Miami -Dade County by a one-time $6.4 million in impact and building fees. Operational Phase: > The Project will annually add $8.5 million in additional income to residents and businessesin the City of Miami as well as 173 permanent jobs for residents. This is estimated to represent a $134 million present value increase in the available cash to residents and businesses of the City. Wages will increase by $3 million. > In addition, Miami Rivertown will yield an annual flow of public sector revenue to the City of Miami -Dade County of approximately $9 million. This is estimated to increase the present value of City and County revenues by $142 million. 11 Report Summary Besides the economic benefits set out herein, Miami Rivertown will also help to strengthen the Civic Center area, providing access to affordable high -quality housing, retail goods and services, and restaurant options to those living, working, and visiting in the area. The Project can add tremendous value for the City of Miami. Revenues currently lost to competing communities and suburbs because of a lack of housing in the Civic Center neighborhood can now be recaptured by the City of Miami. Additionally, the Project will generate sizeable new ongoing revenues, as the property it will sit on is currently tax-exempt. The Civic Center area has recently been the subject of a detailed economic study (dated Nov. 5, 2004) of the impact of planned future capital investment expenditures by the Miami Partnership, a consortium of the leadership of the 15 major medical, educational and judicial institutions located in the Civic Center. It concluded that projected capital expenditures of $1.13 billionover the next 9 years by the Civic Center stakeholders will create over 14,000 new jobs and income of over $2 billion to residents and businesses in the City of Miami. The Miami Rivertown Project responds to a major objective of the Miami Partnership: to provide desirable housing, business and retail facilities near the Civic Center. The University of Miami School of Medicine, the lion's share of planned capital expenditures, will directly benefit from Miami Rivertown's housing and businesses, attracting nurses, doctors, professors and staff to the Miami riverside. 12 • Exhibit I: Impact and Other Fees Develo mental Phase The following fee estimates were based on the assumption of 1,060,073 GSF of 1 residential units, 51,045 GSF of retail units, and 98,129 GSF of office units, a total of 985 condominium units, and a construction cost of $164 million, net of property acquisition, permits, and contingency funds. A. DEVELOPM ENT IM PACT FEES (City of M iami) 1 Police $26,921 2 Fire and Rescue 38,459 3 Parks and Recreation 301,905 4 Streets 542,276 5 Storm Sewers 271,138 6 Solid Waste 84,610 7 General Services Administration 34,613 Subtotal $1, 299, 923 B. DEVELOPM ENT IM PACT FEES (M lami-Dade) 1 Road $1,118,706 2 Fire 220,330 3 Police 120,288 4 School 602,820 5 Parks 730,624 Subtotal $2,792,767 C. N ON -IM PACT FEES (Miami -Dade Planning & Zoning) 1 Development Impact Large Scale A pplication Fee 2 Certificate of Use 3 Size of property for residential 4 N o. of units ($285 per 15 units) 5 Basic fee 6 Size of application 7 N o. of residential units fee 8 Floor space 9 Zoning plans processing fee 10 New construction building permit 11 M iami-Dade Water and Sewer "connection fees' 12 Installation energy 13 M ajor Use Special Permit Application 14 M iami-Dade County Code Compliance 15 Ground cover 16 Land use/ rezoning 17 Certificate of Occupancy 18 Fire Plan Review fee 19 Application fee $111,159 103 5,512 18,715 6,498 853 5,941 854 75 425,203 1,419,111 227,886 30,000 21,679 1,318 1,140 250 14,383 35 Subtotal $ 2, 290, 716 Grand total $6, 383, 4061 Source: Miami -Dade County, Impact and other Fee Schedule for the Department of Planning and Zoning. City of Miami Development Impact Fee Coefficients, Sec. 13-11, City of Miami 13 Municipal Code.