HomeMy WebLinkAboutBinder Section G2. Supporting DocumentsDEVELOPMENT
IMPACT STUDY
Akerman
October 31, 2011
VIA HAND DELIVERY
Mr. David Holtzman, Vice President
Dacra Development
3841 NE 2nd Avenue, Ste. 400
Miami, FL 33137
Javier Fernandez
Associate
Akerman Senterfitt
One Southeast Third Avenue
Suite 2500
Miami, FL 33131-1714
Tel: 305.374.5600
Fax: 305.374.5095
Re: Preliminary Fiscal & Economic Impact Analysis for Design District Special Area
Plan ("SAP")
Dear Mr. Holtzman:
Akerman Senterfitt ("AS") has performed this preliminary analysis to estimate the fiscal and
economic benefits that the initial, mixed -use development concept studied by Miami Design
District Associates ("MDDA") for the SAP will provide to the City of Miami and other jurisdictions in
which it will be located, including Miami -Dade County, the Miami -Dade Public School District, and
the Children's Trust. This letter provides the findings of our preliminary analysis.
The initial development concept studied for the SAP will be developed in phases over a
period of years. During the development period, the rates associated with ad valorem taxes are
likely to be adjusted annually and other fee schedules may also be adjusted. Changes in the
economic environment could also result in construction costs, sales prices, rent levels and hotel
room rates that differ from those assumed below. These differences could result in fiscal and
economic benefits actually being generated that vary significantly from the estimates set forth in
this report.
i
SAP DESCRIPTION
The proposed SAP encompasses a land mass in excess of 17 acres located within the
Miami Design District, which is roughly bounded by portions of Biscayne Boulevard, Federal
Highway, and NE 2nd Avenue to the east, portions of NE 41st and 42nd Streets to the north, N.
Miami Avenue to the west, and NE 38th Street to the south (the "District"). The initial development
akerman.com
BOCA RATON DALLAS DENVER FORT LAUDERDALE JACKSONVILLE LAS VEGAS LOS ANGELES MADISON MIAMI NAPLES
NEW YORK ORLANDO PALM BEACH SALT LAKE CITY TALLAHASSEE TAMPA TYSONS CORNER WASHINGTON, D.C.
WEST-PAL-M-BEACH —
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Mr. David Holtzman
October 31, 2011
Page 2
concept for the SAP contemplates the development of 532,000 sq. ft. of new department store
and street retail space, approximately 100 hotel rooms, 85 residential units, as well as the
renovation of 310,000 of existing commercial space throughout the district. This preliminary
program will besupported by a network of existing and newly constructed, underground and
above -grade parking structures containing approximately 2,000 spaces.
The residential units envisioned in the conceptual plan for the SAP will include a total of 85
units averaging approximately 1,350 square feet in size. It is anticipated that the proposed
residential condominium units will sell at an average square foot price of approximately $400,
yielding gross sales proceeds of approximately $46 million.
Non-residential uses within the SAP will include a 100-key hotel, 530,000 square feet of
new street retail and department store space, and 310,000 square feet of renovated mixed -
commercial space. The hotel is expected to operate at a stabilized rate of occupancy of 75% at
an average daily rate of $300, yielding annual gross revenues slightly in excess of $8.2 million. The
530,000 square feet of new street retail and department store space are expected to be a regional
draw, with the result that sales productivity per square foot will approximate S700. Annual
projected retail sales will likely exceed S370 million. The anticipated rental rate for this element of
the project is expected to average $75 per square foot. This element of the project is expected to
compliment the existing retail and entertainment area that has already emerged at the Shops at
Midtown Miami, located just south of the District on NE 36th Street.
Development of aforementioned elements of the conceptual plan are estimated at 5300
million in hard costs. An additional S12 million will likely be expended on furniture, fixtures and
equipment (FF&E) for the proposed uses, with an additional S37.5 million of expenditures for soft
costs inclusive of architectural and engineering fees, marketing, leasing, and sales commissions,
project overhead, etc. Accordingly, the project will cost a total of 5350 million to develop exclusive
of land cost and developer fees.
SUMMARY OF FINDINGS
The materials that follow summarize the fiscal and economic benefits that the proposed
Design District SAP will generate. As discussed above, the project will be developed in phases;
however, since an exact phasing plan has not yet been formulated, the estimates presented below
address the project in its entirety. All monetary figures are expressed in 2011 Dollars.
Fiscal Benefits
The term "fiscal benefits" refers to the positive impact that the proposed project will have
on the finances of the City of Miami and the other jurisdictions in which it will be located. The
benefits that it will provide will be both non -recurring and recurring in nature, with the former
occurring during the construction period and the latter when construction is completed. The
estimates shown are based on current millage and fee rates.
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Mr. David Holtzman
October 31, 2011
Page 3
City of Miami
Non -recurring benefits
■ $1.65 million in City building permit fees
■ S260,500 in City police impact fees
• 5152,545 in City fire impact fees
■ $72,735 in City general services impact fees
■ $509,830 in City park impact fees
' • 529,868 in City impact fee administrative surcharges
Total non -recurring City benefits:
Recurring benefits
2,675,478
■ $2,271,300 annually in City General Fund ad valorem taxes
■ $279,000 annually in City Debt Service ad valorem taxes
• 715,000 annually in parking surcharge revenues
Total recurring City benefits:
Non -Quantifiable benefits
3,265,300
■ 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 revenue sharing funds (recurring)
Other Jurisdictions
Miami -Dade County
■ S1,441,500 annually in General Fund ad valorem taxes (recurring)
• $85,500 annually in Debt Service Fund ad valorem taxes (recurring)
■ $53,850 annually in Library ad valorem taxes (recurring)
■ $410,000 annually in tourist taxes (recurring)
■ S3,710,000 annually in local option sales taxes (recurring)
■ Increased water and sewer connection fees (non -recurring)
■ Increased revenue sharing funds (recurring)
■ Increased water and sewer service fees (recurring)
Miami -Dade Public Schools
■ $298,978 in impact fees (non -recurring)
• S2,329,500 annually in Operating Fund ad valorem taxes (recurring)
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Mr. David Holtzman
October 31, 2011
Page 4
• $72,000 annually in Debt Service Fund ad valorem taxes (recurring)
Children's Trust
150,000 annually in ad valorem taxes (recurring)
Economic Benefits
The term "economic benefits" relates to the positive impact that the proposed 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.
Non -recurring benefits
■ At least 80 percent of the 5350 million that will be spent on hard and soft costs, as well
as FF&E, to develop the project will be spent within the City of Miami, producing an
overall economic impact of at least $530 million when the multiplier effect is considered.
• Project expenditures will include an estimated 5140 million for construction labor, an
amount sufficient to pay for 2,314 man-years of construction work at the average
annual pay rate of a Miami -Dade County construction worker, which approximates
S60,500 per year. It is further anticipated that each direct construction job will result in
the creation of at least 0.75 indirect or induced jobs. Indirect jobs will be in businesses
related to construction such as building supplies or equipment rental, while induced
jobs will be businesses where those occupying the direct and indirect jobs will spend
their earnings such as the local supermarket or personal service establishment. A
substantial portion of the jobs created by the development of the proposed project are
likely to be filled by City of Miami residents.
Recurring
■ When the project is completed, a total of S16.2 million will be spent annually by
condominium residents in retail and food establishments, by hotel guests for a variety of
items including food and beverage, transportation, entertainment and attractions and
retail goods and by workers at the project for meals and other items purchased during
the work day. It is anticipated that at least 85 percent of these expenditures will be
within the City of Miami resulting in an overall economic impact annually approximating
$13.8 million.
• A total of 1,230 people will be employed at the proposed project, inclusive of people
involved in project operations, maintenance and parking. Based on the information
compiled by the Florida Agency for Workforce Innovation, it is expected that these
workers will earn approximately $57 million. The direct jobs at the project will stimulate
the creation of 800 indirect and induced jobs. Residents of the City of Miami are likely
to occupy a significant number of the direct, indirect, and induced jobs that result from
the development of the project.
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Mr. David Holtzman
October 31, 2011
Page 5
CONCLUSION
This preliminary analysis demonstrates that the proposed project will be highly beneficial to the
City of Miami both fiscally and economically.
Sincerely,
Javier Fnandez
cc: Craig Robins, President & Chief Executive Officer
Steven Gretenstein, Chief Operating Officer
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Miami Design District SAP
Development Fee Estimate Table V.5
Juris.
County
County
County
County
County
County
County
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Miami
Fee Category
Road
Road
Road
Road
Road
School
School
Police
Fire/Rescue
Parks/Recreation
General Svcs
Police
Fire/Rescue
Parks/Recreation
General Svcs
Police
Fire/Rescue
Parks/Recreation
General Svcs
Police
Fire/Rescue
Parks/Recreation
General Svcs
Impact Fee Surcharge
Building permit
Building permit
Portion of development
Residential - apartment
Residential -condominium
Commercial
Retail
Residential - apartment
Residential -condominium
Low Rise Residential
Low Rise Residential
Low Rise Residential
Low Rise Residential
Hotel
Hotel
Hotel
Hotel
Commercial
Commercial
Commercial
Commercial
Retail (<_25K)
Retail (<_25K)
Retail (.25K)
Retail (<_25K)
(Basic Permit)
(Basic Permit)
Rate per
0 unit
2,102 unit
3,199 unit
0 sq ft
8 sq ft
0 unit
3,509
144
619
5,998
363
87
40
0
16
0.4520
0.1810
0.0000
0.0760
0.4520
0.1810
0.0000
0.0760
0.0300
0.0100
0.0050
unit
unit
unit
unit
unit
unit
unit
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
30 mil
270 mil
l,31/201 ;
Area (sq ft) Units
530.000
0
0
0
530,000
530,000
530.000
530.000
cost
85
85
85
85
85
100
100
100
100
Downtown Development Supplemental Fee (See Section 13-52 et seq., City of Miami Code of Ordinances)
Transportation
Air Quality
DRI Cost Recovery
DRI Administration
Transportation
Air Quality
DRI Cost Recovery
DRI Administration
Transportation
Air Quality
DRI Cost Recovery'
DRI Administration
Transportation
Air Quality
DRI Cost Recovery
DRI Administration
Commercial
Commercial
Commercial
Commercial
Retail
Retail
Retail
Retail
Residential
Residential
Residential
Residential
Hotel
Hotel
Hotel
Hotel
0.719
0.031
0.115
0.230
0.936
0.051
0.115
0.230
0.203
0.011
0.115
0.230
0.361
0.018
0.115
0.230
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
sq ft
TOTAL City and County Fees
Estimated Fee
0
178, 658
319,937
0
4,476,115
0
298,278
12,240
52,615
509,830
30,855
8,700
4,000
0
1,600
0
0
0
0
239,560
95.930
0
40,280
29.868
300,000
1,350,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
7,948,466
TOTAL Downtown Development Supplemental Fee (See Section 13-52 et seq., City of Miami Code of Ordinances)
0
* Assumes a project cost of $300,000,000
48466 *
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