HomeMy WebLinkAboutTAB P - Economic Impact Analysis•
•
Me,/ 29, 20
Jeffrey Berc_ew,
BeFC-OW a
Miami, Florida
Rie-; ,PAL15;P irgm-nzt Anab,-oie — GNI; 3q -Rattit
Dear Mr. Beroow:
Miami Economic. Associates, inc. (1*--i:i1A1) has peilar.rned analwis to estimate the fiscal
arid economic benefits that the City Square ..retail .project, which is proposed for
developmerit .cri. North Bayshore D 13.and EP Streets-,wI
provide, to th-e City of Miami. This letter, which is organized --as S-hmvn hkw, pmvides the
fen as of our analysis ra.rd their be:
Fiscei Benefits
• Ec-onornic Eieriefits
Rases of P.:athletes
Ciosinn
2
The anays pres,Antd bP:1-cw ba5c'ed on preliminary crOJnfisles of piric„-iing and
construction These estimates are subject to oria.Fige based on avarket conditiorui..
and ciet parameters at the trne devevopment actually ac-cur s and the ct;an q es may be
slg n; cant
6861 $w t4,Teeregce Fieride 33156
Tel: C30-61 $-68.0229 Fax: (3051 es-3534 meetinV0b let
•
•
•
3"aad:eil
FW Yv+'CE
May 2, 006
Pee 2
"a Deb
The Ci-Iv
and 3,776
s, Un re. foot
p 4e ct wiii be comprised w» -64,1 3 square feel of ratan space
spaces, s, The retaii space 4fii €,R average rats o 5 per
Const ucktn '5,3! the ` 4 5..i- ;ut5?,a retail projet,1LS. expects io cot $2. 1.3 million in hard
costs..An add tior 4 $56,6 r}zi ai n will be expended for soft costs -inclusive arch tectura#
wry en ineeaing fees, marketing, leasing commissions, project overhead, etc.
Accordingly, the prove: v 'sli oc: t • 334..1 -million to develop exclusive of land cost,
finalising .cvests and a veto er'sfee.
: r.x s
r je,
in important ways., as sUm arIZ °c,` below:
Fiscal Benefits.
Fi-scaii Benefits -refers refs:rs to- the
have on the> fiancesof the
be o on-rec »4 tin
estimates shown, which 'am
2006 Constant Do-EPars.
-O trri O. Berkfits
'eF4YP )•El<392
tcs
>neficial to the
xtv of Miami
:pacit -hat the pre 'o'sedd 'T xed-°us. project
s o a ii. °he benefits thatt. will provide h the City
: f,1. r l.np i nature as -e - merited below. The
n and fee rates, are expressed
578.,.060 in C, y ng,perz"�"t.S' lees
10,000 in 'City solid waste surcharge fees
300, i �7 City pace.rnpact fees
120.211 zn.malty fire -rescue impact fees
50,475 in City general services impact. fees
4;e57 ass 4vntto'w-n tD'Ri -supplemental in.pact fees
atIC�y R Omni �J:Imun ty xedeves c�1:':��i",.0e
increment revenues.
411,754 e r.rilaaUy € 1 City Genera .Fund -ad vtaaiore taxes
,5e7 a nual y In City Debt Service ad valorem
1-67,0n0 annuali°y `owntoviin Devel,o,pment Authority d valorem
sn €ai t3 o � g :c€fib
g,Flurkta:�:'SE
'etb (2;06) 6e9--) `0 Far,: Smai
•
Jeffrey Bercow, Esti,
BercrriN & Rada
May 2-9, 2005
Page. 3
Nton-QuaintifiaNe
Trade -related Tees for roofing, eleotriesl, plumbing, m.eohanical, podi and
elevator work performed .during co.nstruction (non -recurring)
!noressed City .utty taxes and franchise fees reourrind)
• Inoraased doctiipationa; license fees (recurring)
• increased revenue Sharing :of state -mandated sties tax (recurring)
Other-
‘• iAlTiiie the focus of WEAl's fiscal analysis was .on the City of Nitiami, the
City Square reta proect wfl, os shown below, provide gicific,ant fiscal
benefits to other non-municipai g-overnmentat jurisdictions that impact the
lives of City residents:
o $ 2,205,316 in County road fripact ees (rioncurrino)
$ 232,673 iv,- County Gen-aral Fund ad •valorern taxes (recurring)
95.,219 in County Debt SeMoe ad valorem taxes(recurring)
o $ 14,3,262 n Chilttiren's Trust ad valorem: taxes (recurring)
o $. 162;372 in County Library ad. valorem taxes (recurring)
o $ .2,655,093 in SCh0.01 Operating ad valorem taxes (recurring)
0 $ 164,043 in School.Debt Sewlce ad valorem taxes (recurring)
o inoreaz,ted County occupatiottial li.censei fees -(recurrii-g)
(.) !ncreased revenue sharing of state -mandated sales tax(reourrin.g)
o inute-asit.,.--d ocat option sates tax
Econorrac Ben
E:Q110Mk,' Benefits relates to the positive impact that the City Square retail project
wH have CO the economy of the City rather then its finances.. The econornk;: benefits
if will provide will aiso b:e noll-teourrtrm and recurting .in nature.
o Non -recurring.
Approximately 90 percertt of the $354,1 .nli6pr3 that witl be sp‘.-,,;.,ht on hard
and soft costs to develop the p-roposeti MiXe5d-use project Min be spent
within the City of fkilisrm, producing an overati economic irnpact
approximating $467,3 million When the tritlitOlier offectli 4 considered.
Project expenditures within the City of Mam will indude en estimated
.$124.8 million for oonstrudion labor, an amount sufficient to pay
apprtmimately 2,400 construatiort workers, some of whom may ,be City
residents, their average annuai watte of -$52,000.
Eo Assocates, tac., 5W C.,9th Terfac:e
Te-f (30.5) 5Cp'S-U,74:21) F-ax'; 3034n-tva5akeberi..,5ovtli„tr.
•
Jeffrey Beropii.v, Esq..
Bel -COW & Rade!!
May 29., 20,06
Page 4
A total -of $5.3 miUion w be sent annually within the City of Miami.by
residents of and workers at the proposed project. in retail and food and
beverege establishments. Additionally, $8.4 million in ad .valorem taxee
and iricrement revenues will be .paid to the City of Mam, ts Omni
Community Redevelopment District and Downtown Development
Authority as well as Miami -Dade County and :Miami -Dade Count"(
Schools, ell of which maintain their prindpal offices within the City.. These
expenditures will have an overall economic impact on the City of $22,0
miQn an ay viffien the multiplier effect is considered.
A total of 1.,725 peoplewU be e.mployeci at the proposed oroleo,t, inclusive
of people involved in projeot operations, maintenance and parking. These
workers, who may include City re.sidents, will earn approximately $43,1
million annually.
Bases of Eist,h7ias
The materials that foilr.)ix provide the ass:umptions used to ei".;.1-tiniate the fiscal and
economic benefits that development of the proposed rnixed-use project will provide to
the ;City of Miami. Ali iTionetarii values are statab in 2006 Constant !Dollars.
Projet C-taairac.terlists
The City Square retad project will .be locate.d Within the City of Miardil, the CO's 'Omni
Redevek-)pment District and -its -Downtown Development Authority as welt as within
the boundaries .of the Downtown DRI. ti will also be iocate-d .within the juriadictons af
Ktliami-Dade County and the Miami -Dade County Public School District.
The project wifi entail the construction Of 0312239 gross square feet of building area
linclusiv-e, of parking.
0-evelopment of the City Square Retail project will cost approximately $277.3-miillon
to construct in terms of hard con.struo-tion, Scvt _costs includind those relating to
professional fees., marketing, leasing commissions., permit fees., developer overhead,
administration, etc. will .total an additional $56,3 million, Therefore, $334,1 million will
be spent to deiiielep tne project ,exclusive of ;and acquisition costs and developers
fee,s.
There are no comparable projects to the proposed it Square retail project within
the City of Mierni at this time, Therefore, for the purpose of this anaiysis, it is
assumed that the City Square retail project wili be placed an the tax rolls at an
assessed and taxable value approximating, .lits total development cost of $334,1
.FAit4miCnme As5ocietes, h1c. Te Miami, Fd 33156
t33-C229 Fak: er69-3534 Emaik
Jef rey Bairn', Es£
Fier «ow Via: , aad
May 29
Page 5
s-,as d or industry stan'da�rd it is anticipated ted that tie proposed re ail space will c e
e;a
coot, ` by 1,656 °wOrkerE. This. esiimate assume-s 2_5 workers per 1,0010 square
feet. ' = n project ,,:, rations, maintenance n_enance and parking personnel are accounted
n, employed at the proposed project will ,' 25 people,
for, the total P�"%�:�1' �- � � � �-
�E they spendaverage of $10 per for food and. other items white
fais.`�i.ersi°s i�e� .;� ,"icy an ?„� day
`t. ±- e• penditu}e s v"ou d tota $6 6 i;"?l3iloi"i.
a our in^ F.Y.ic„%iimpagots
The Cily of Miami charges building permit fees at a rate of $0.25 per gross square
foot of commercial constru Lion inclusive of the square footage comprising the
parking ciarage, Accordlh'giy, bulldino permit teed totaling $573,050 \Mil be paid. A
eo d wag to sci r arge fee in The amount of $10,000, the maximum n amount, will be
applied.
i ,e ;carious tradr.iis. invoked in completing the nevi./ .pr j of incl din
t t e r orrrig,
electrical, plumbing, mechanical, elevator and swimming pGol contractors visit be
required to pay fees on their work. Calculation of the fees that they Lill pay requires
that the .pr oject's final engineering -drawings be completed which has not yet
occurred. Accordingly, the fees that will be paid can not be quantified et this- time. A
solid waste surcharge is applied to these fees.
The City re n r;.^ i ci: ct fees on new construction projects. Th r tes for
retail space in the quasi y proposed are paid on a per square foot basis sit the
n, F is F 5 o r 3 1# .. fire-rescue5 e services.
�-11�e.,.�.,� .,�' ��.'�,..+�°. a. �.�,E:.ia, �;.�.�=G 3 +.i; �'!t� �J..��ls.. for CiB�i'�:,:€+
impact fees- totaling $4 (0 683 wig be paid or, the C.Ity Square retell project, of which
tyt,197 ill be for police, $120,211 for fire -rescue and '„$. 0,475 for general
services.
in ar:.iiis.i r:'; to the sm € ds ussedf in the preceding pa r graph that are charged
to projects anywhere Lv th n C'.ty of Miami, supple -mental wripact `f ewe are charged
on projects tocated in the area covered by the Dow 3ta.'g'n Ri. The rate for retail
spa c� $1,332 par square foot Based on this , it is estimated that a total of
$894- , 52 in Downtown ` 0.1 ` .;.n o s, 9-s--t 3.al impact fermi, .w s'...,-it e be o�a".iid.
New con rruo,or prole
. Miami -Dade County F
fee rate for retail space is
space proposed. at the i it
$2,20 ,31.6 be pad.
f"` ae c r:r „'k
Ensue-,��,ar;��.» g FiS
cis
-tied ir, the malty o iu .rit also weed to :.a :`' it le s
s. In the eastern per .. of the cou'nty, the r )ad:
foot per square for projects with �., l the quantity ft:i.y of
'are ae 8 ,;elect, requiring that fees in the amount of
The mlllegG rates ourrentiy befrkg
governmental .ties referenced in
.. Sripp . is r a :iw>i wtwi g. e.lhe ,d 10
•
Summery of Findings are
.._.x revenues: , 9 r iota. `trier
Te. r ce it Horn , Pro
rt- arl:rakVspiel!Lse•u h, 'sot
•
estimated taxable value
effre j Vie, co , 1
Bencow & Radell
May 29, 25
P-age 6
7 cplate applying t.r, rnillaos rate shown to T.-ir prof : o
a
34.1 hill -lion,
DebFund
Dowritow. Au hofity ^.. ..T.F
iarn-i-iDde County
Genral:Fund
tii?i('r nSTrus
Rat.
:6500
7G'ie
95,21 ....
0 `"€ 40.262„ _.
0.48600 $ €62.072
7. 4700 • 55,0933
0.49100
r�i my Pr ty Appraiuer Miami Economic Associates,
6 164,0'43
The City Square retail proir of will be locate i ire the Omni Redeveioprrent D strict.
Accordingly, ��t1 the Cy Miai-and Msarni-Dade County will berequired to annually fund the District Trust Fund with an amountq� 9uivaleft to 95 percznt of the
funds., they ccolie^ct for their general al funds on the d?ffe-renie between the current
taxable value of the property on which the City Square retail project will be
constructed and the taxable value of the project when comp eted. For the purpose of
this analysis, ii i assumed that the ',incremental' value will be 90 percent of the
proposed project's estimated 1axaNe value. The -general funds of the two
jurisdiction -swill 'eta3ii percznt f the tuxes oener"ated on the current value "s% the
property and 5 percent of those generated on the incremental value_ Acoordingiy, the
:District Trust Fund €ii re:eive ,094,729 annually while the general funds € . the
City andh ''you t„ wB retain$411 t $% s_ y,
�,.,t � t, �� �vi.�f`kiy �?l.l< r`= � 3 . �' � u��:4_, ,rs_. %,'���� c: xt�ii.,a�f� respectively,
s .'.o1a Its. s. ityp r "' € r r '' i e fees from the providers of
f'1�- City Miami iT-:{ vG�'i, utll i av^ei � and ch a.l i
� ect and t c e # n theirrevenues, +`
t�`i...'�'"��.A�, 4I'tL: G..�s,., other such services based � %, The amount
t
collected, u e result of the development p the proposed project will be depend
ent On
the mount 'of these services used by the pe-o ectt's residents and mrrnef c al
tenants: hPence-, a`a nail mot be quantified at this time,
Both the -Carr oft' 1 #a I and Miami -Da -de County wil collect occupational tonal license fees
from the occupants of the: proposed osed retail space. The amount co! ect d ca.n not be
estimated at this time since it v. t'. be dependent on the nature of the businesses
;used , the office and ree d space,
The City rt s =a f <# ,, W"l n I .�,vide County _ICE, ate in , numba',r of revenue
City
- that
sharing o :,�:"�i:I:`a. �,�P� particulara.�{{��relevance to t:"�' *�s5x°�.,1.1aee�st�:r�.='-state-mandated
20.. project Le.
r. Div 9e sales • cy n Which ap t oxirnatsi'y £+�ercte t of the Late-t ndatied 6
percent sales, fax ramie, em ret ., salE
�.-� } c:€is...,+i�=vi on �i�i�-,.,`�.'�',esb�b s.u�id �.?E...�and rental payments Sa
rebated to the County in which it is oultected and then shared b-.ety- er< the County
and its munici? li "i s, The amount of moneys that will be available to the City and the
C 's aevumic ,,ss .st .s, trI6 6 °: ' . naffs '.alai, Florida a :; 5fi
r e+ss 0 tZ9 y .. � 4 s'.,eSaM' m isiinki beii5!3% t; o-,rtet
•
Jeffrey Be 0.YV , Esq,
Berhow& Radell
May 29, 2006
Page 7
County under this program -as a re -suit of the iretaii sales, recorded ancli .rentai
payments made -at the c.'„ity Square retail project can not beestirnate,d at thic time.
As i.ndicated in the prir.--_,cedinig, the state- has mandated that sales tax be paid at a rate
of 6 percent of non-exempt retail sales and rental payments:. An ad-Olitionai 1 percent
is charged in Willimi-Dade County to fund the Health Trust and transit. The amount of
these local option sales taxes that wilt be collected as a result of the development of
the Gity Square Retail, project can nOt be estirriated at this time.
NKwecurriri-g Economic Benefits
lt is estimated that approximately 90 percent of the V.3.34.1 miiiich that will be spent
on the hard and soft costs to develop the proposed mixed -use project will initially be
spent in the City of Miami, This ,estimate is based on an -anticipation of the specific
firms that Mil be involved in implementation of the project. According to the input-
output model of MinnesotMPLAN Group -WIG), which is one of the nation's
foremost econometric firms, the overall economic, ,impact of these expenditures will
approximate f467.3 Trillion based on application of a 1.554 multiplier.
MiG's input-output model further estimates that approximately $124-.3 million of the
moneys spent on bard costs within the City of Miami Will be spent for labor, The
average construction worker in Miami -Dade County currently earns approximately
552,-000 per year according to the Ronda Agency for Workforce Innov-ation.
Therefore, the project's e.x.p-endiiture on construction tabor WOLlid support
approximately 2,400 workers, some of whom may be City residents, on an annual
basis at their average wage rate..
Rec.urring ECVAZIMic° _Benet%
The workforce at the City Square retail project will spend $6.3 miion annually in
retail -establiehments and restaurants -while to k g . Additionally., the project will
,generate approximately $8,4 -rnillion annually in ad valorem taxes and inioremenit
revenues for the City of Miami, its Omni Community Redevelopment District and
Downtown •E7`Jeteio-priiient Autherirtrj,i as welt as for 'Miami -Dade County and Miami -
Dade County Sthrocis, o ob marten their -principal offioes within the City.
Acc-ording to the MiG input-output rriodei, the total -economic impact of these
e.izipenditures will be $22.0 mitiion annually based en the applieation of a 1.5
on wage date compiled, by the Florida Agency on Workforce Innovation, it is
that the annual earnings .of the 1,72:5 people who will be employed at the proposed
project on a full-tin-ie equivalent basis, some of whom may be City residents, WOUd
aierage $25,000, or 543.1 million in total.
Mern tn, Eizel -8_9 Ter:race Miami, rle-ria. 33156
'7e,kz, (305) zE3-1:3-'-s,-22 rayo 66-9-8534 Emailt me-airi:kg4eUseuth,met
•
Jeffrey Bercovq, Esq,
Berdow-& RadeH
May 29, 2005
Page 8
The analysis perfomrked by MEN demcnstrates that the City Squaf'e reU poect w be
highly beneficiat to the City of :MiarrJ both -fiscally and -cconornicatiy.
Sincerely;
Miarn Economic Associates, Inc,
Andrew Dalkart
President
Mani Economic Associates, inc. 6561 SM. 591h Terrace ittliarni, Fiorda 33165
Tel; MI5) e.94122S Fax:; ( 669-13534 Email: niezirt11.0)be/louth.not