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HomeMy WebLinkAboutSection II Tab 5 - Economic Impact StudyEvaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Miami Economic Associates, Inc, June 14, 2018 Mr. Francisco J. Garcia Director, Planning City of Miami 444 SW 2"tl Avenue are Floor Miami, FL 33130 Re: Economic and Fiscal Benefits Analysis Miami Produce Mixed -use Project Dear Mr. Garcia: NOTICE Completion of stalf review indexes permit application meets rd.-tram requirenents under Miami 2l andbr the City of Miami Code, only lies permit application. reed to be scheduled for a putalc hearing In accordance wren amellnes set forth In the City of Miami Cale. The applicable b hearing toady vnrl review • the pent application atpu the public hearing and render either a rewmmerdation or a anal decision. PZ-18-263 01/22/19 Miami Economic Associates, Inc. (MEAI) has performed an analysis to estimate the economic and fiscal benefits that will be realized by the City of Miami and Miami -Dade County as well as two other governmental jurisdictions as a result of the development of the Miami Produce mixed -use project in the Allapattah area of the City of Miami. The Subject Project, which will front on NW 12th Avenue between NW 21 st and 22nd Streets, will include the following uses: • 1,204 rental apartment units • 230,886 square feet office space • 227 hotel units in a full -service facility • 74,800 square feet of retail and restaurant space • A 78,347 square foot for -profit educational facility that will accommodate 400 students studying art, architecture, design and culinary arts • 1,175 parking spaces The purpose of this letter report is to provide you with the results of the analysis which MEAI performed. The estimates of economic and fiscal benefits presented in this report were calculated based on rates for taxes and fees that are subject to change as are the construction costs that we assumed in our analysis. Accordingly, the actual fiscal and economic benefits generated by the proposed mixed -use project for the City of Miami, Miami -Dade County and the other governmental jurisdictions enumerated above may vary from those estimated below and 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: d3051 669-0229 Fax: t8661 496-6107 Email: meainkabellsouth-net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45d18] Mr. Francisco J. Garda Director, Planning City of Miami May 14, 2018 Page 2 the differences may be significant. All monetary amounts in this letter are express Dollars. Key Findings The key findings of the analysis MEAI performed are as follows: Economic Benefits NOTICE Conploton of staff review indcaer permit application meet mermen require -none under Miami 31 and/or the City of Miami Code, only. Ms permit application win reed to besCreduled for a pudic tearing In accordance win timelines set fort int. City of Miami Code. The applicable decision -malting body will review the permit application at thepubllc hearing and render either , recommendation or a final...or, PZ-18-263 20'1102/19 • During the period in which the Miami Produce mixed -use project is being developed, 5,757jobs will be created, including 3,472 construction jobs on -site (direct jobs). The remainder of the jobs will either be in businesses that support the construction industry such as building supply and trucking companies (indirect jobs) or in establishments in which the construction workers and the indirect workers spend their earnings (induced jobs). The workers occupying these direct, indirect and induced jobs are projected to earn more than $305.15 million in wages and salaries throughout the period in which the project is being constructed. • After the development of Subject Project has been completed, it is expected that 1,482 workers will be employed on -site annually on a full-time equivalent basis in the proposed retail and restaurant space. An additional 858 indirect and induced workers will also be employed on a full-time equivalent. The earnings of all these workers on an annual basis are expected to approximate $113.0 million annually. It should, however, be noted that the number of people employed on -site will likely be greater than 1,482 because substantial portions of the workforces in the retail and food and beverage sectors as well as the hotel sector are part-time workers. ■ The occupants of the proposed rental apartment units will spend approximately 20 percent of their incomes while in residence on retail goods and in restaurants. While a small portion of their expenditures will on -site, the preponderance of them will occur off -site, providing support for additional jobs in the retail and food and beverage sectors as well as additional indirect and induced jobs. MEAI further believes that the preponderance of these additional jobs will be located within the City of Miami and/or Miami -Dade County. Assuming an annual rate of occupancy of 95 percent, MEAT estimates that the expenditures of the housing living at the Subject Project in retail and food and beverage establishments will approximate $16.7 million annually. Fiscal Benefits • During the period that the proposed Miami Produce mixed -use project is being developed, the City of Miami will collect approximately $8,3 million in general and trade -related building permit, impact fees and fees for certificates of occupancy and completion. It will also collect trade -related building permit fees in amounts that cannot presently be estimated based on the information currently available. Included in this amounts that it will collect will be approximately $4.77 million in park impact fees. Miami -Dade County and the Miami -Dade County Public School District will also receive significant benefits, with the former collecting Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669.0229 Fax: (305) 669-8534 Email: meaink©bellsouth.net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 3 more than $14.1 million in road impact fees and water and sewer connection fe latter more than $1.5 million in school impact fees. NOTICE Completion of staff review indexes permit application eters minimum requirements under Miami Oland/or the City or Miami • Code, only. Ibis permit application wilt reed to be scheduled for a ' puta hearing In accordance wim timelines set forth Inthe City of Miami Code. The applicable decison-making bedyvel review • the recent application M the public hearing and render either a recommendation or a final decision. PZ-18-263 d tQ122/19 • After the development the proposed project is fully cornpleted, the general/operating funds of the City of Miami, Miami -Dade County and the Miami -Dade County Public School District will collect approximately $8.26 million annually in ad valorem taxes, with the City's share exceeding $3.25 for its General and Debt Service Funds. The amount of ad valorem taxes that each jurisdiction will collect on an annual basis will be more than 47 times greater than the amount they collected in the current fiscal year on the properties on which the Subject Project will be developed. • The Subject Project will be well -located for its residents to take advantage of Metrorail and Metrobus service and as such should increase transit ridership, potentially enabling Miami - Dade County --- and its taxpayers --- to reduce the amount that those services need to be subsided with funds raised through ad valorem taxes. The remainder of this letter report, which is organized as shown at the top of the next page, provides a complete discussion of the findings of our analysis and their bases. Section Page Economic Benefits 4 Fiscal Benefits 6 Bases of Estimates of Fiscal Benefits 8 Closin 11 Project Description As discussed in the introductory paragraph of this letter report, the Miami Produce mixed -use project will be located in the Allapattah area of the City of Miami on a parcel land that fronts on NW 1211 Avenue between NW 21 St and NW 22"d Streets. The parcel historically served as the site of a produce market. The Subject Project will include the following uses: • 1,204 rental apartment units • 230,886 square feet of office space • 227 hotel units • 74,800 square feet of retail and restaurant space • A 76,347 square foot for -profit educational facility • 1,175 parking spaces From a market prospective, the proposed rental apartments, which represent the most significant use in the Subject Project, will benefit from their proximity to the Santa Clara Metrorail Station, enabling the prospective residents to easily commute to such major employment centers as the Civic/Medical Center area, Downtown Miami, Mercy Hospital Downtown Coral Gables and the University of Miami and the Dadeland area. Several Metrobus routes also use NW 12th Avenue. Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 4 The proposed rental apartment units will include a mix of efficiencies (749 units or 6 of the total), 1-bedroom units (154 units or 12.8 percent of the total) and 2-bedroo bedroom units (301 units or 25.0 percent of the total). The units will range in size from 41 1,518 depending on unit type, with the average unit being 625 square feet in size. Based on information provided by the developer, Miami Produce Center, LLC, MEAI expects that the proposed rental apartment units will rent at an average rate of $3.00 per square foot per month, which will result in an annual rental roll, assuming the units are 95 percent occupied, approximating $29.5 million. MEAI further estimates that at the estimated rental rate, a substantial portion, if not all, of the efficiencies and one -bedroom units, which equate to 75 percent of the total units, will qualify as workforce housing, i.e. attainable by households with incomes equal to or less than 140 percent of the Area Median Income in Miami -Dade County, which is currently $51,800. NOTICE Completion of staff review indexes permit application meets minimum regwrenents under Miami zlandrorthe City of Miami Code, onNms permit application. need to l,esd,edued fora pubic hearing In accordance wtc timelines set forth in City of Miami Code. The applicable decision -matting Cadyll review the pent application at the public hearing and tender either a recommendation or a final derision. With respect to the other proposed uses, the following points are noted. PZ-18-263 rcM2/19 • Miami Produce Center, LLC expects the proposed ,office and retail and restaurant space to achieve average rental rates on an annual basis of $45 per square foot. It further anticipates that the office space will appeal to a wide range of users in terms of business sector and that 75 percent of the retail and restaurant space will be occupied by food and beverage establishments. Finally, it estimates that the retail and restaurants space will achieve average annual sales volumes of $650 per square foot. • The proposed hotel will be a full -service facility that offers food service and meeting and function space as well as lodging in its 227 rooms. Miami Produce Center LLC estimates that the property will achieve a stabilized level of occupancy of 85 percent at an average daily rate per occupied room of $200 per night. • The proposed for -profit educational facility is being designed to accommodate 400 students studying art, architecture, design and culinary arts in curricula that will each extend one-year in duration under the auspices of a staff comprised of approximately 50 instructors and administrators. The operator of the facility %mill pay rent of $40 per square foot for use of the space it occupies. Information that was also provided by Miami Produce Center LLC estimates that it will cost approximately $400.0 million to develop the Subject Project in terms of lhard construction costs. An additional $100.0 million will be spent on soft costs that will include, but not be limited to, architecture and engineering fees, building permits and impact fees, project management, real estate taxes, insurance and construction loan interest during the development period, marketing and leasing commissions. Accordingly, the Miami Produce mixed -use project will cost approximately $500.0 million to develop. Economic Benefits The term "economic benefits" relates to the positive impact that the Miami Produce mixed -use project, when developed, will have on the economy of the City of Miami and Miami -Dade County. The economic benefits that the project will provide will be both non -recurring and recurring in nature, with the former occurring during the construction period, the latter on an Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 5 annual basis each year after the project has been fully completed. Table 1 at the top page summarizes the economic benefits that the Subject Project will generate. The amounts shown are expressed in 2018 Constant Dollars. NOTICE Completion of staff review indexes permit application meets minimum requirements under Miami gland/or the City of Mimi Cock, only. Ibis permit app4catkn Ma reed to to scheduled for a puck hearingIn accordance with timelines set forth Mete City of Miami Code. The applicable decison-makngbpdyatoll review Otte permit application at the public hearing and render either a recommendation or a anal decision. Table 1 Economic Benefits Miami Produce Mixed -use Project (2018 Constant Dollars) Benefits Non -recurring Recurring Jobs Created Direct 3,472 1,482 Indirect 967 402 Induced 1,3'18 456 Total 5,757 2, 340 Labor Income (All workers $ 305,158,300 $ 112,978,900 Gross Domestic Product (Value-added $ 386,645,700 $ 223,839,300 Source: Miami Produce Center, LLC IMPLAN: GAI Consultants Inc.; Miami Economic Associates, Inc. With respect to Table 1, the following points are noted: • The estimates of job creation, labor income and gross domestic product (or value-added) were formulated using the IMPLAN Input -Output Model developed at the University of Minnesota over 35 years ago and which has been updated on a continuing basis in the ensuing years. A description of the model may be found in the appendix to this report on page 12. • The term "direct jobs" refers to jobs on -site, "Indirect jobs" are jobs in industries related to the on -site economic activity while i1induced jobs' are jobs in economic sectors across the entirety of the economy in which the direct and indirect workers spend their earnings. Illustratively, during the construction period, the direct jobs would be filled `dy the on -site construction workers. The indirect workers would include people employed by building supply and trucking firms, among others, that provide goods and services that support the on -site construction activity. The Induced workers would include people working in supermarkets and doctors' offices, among other venues, that the direct and indirect workers patronize. • The estimates of non -recurring benefits are based on the project's estimated cost of hard construction, which is expected to total $400 million. Soft costs were not included in the input to the model since the model estimates those expenses and their inclusion in the input would result in double -counting. The benefits shown would be generated throughout the entirety of the development period and are stated 2018 Constant Dollars. Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669.8534 Email: meaink@bellsouth.net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 6 • The estimates of recurring benefits are annual amounts expressed in 2018 Cons for each year after development of the entire project has been completed. The in induced jobs as well as labor income and gross domestic product were estimated base there being a total 1,482 direct employees on -site on a full-time equivalent basis. The number of full-time equivalents was estimated by assuming the following: c The office space would be occupied by 4 employees per 1,000 square feet. c The portion of the retail and restaurant space occupied by food and beverage establishments would employ 5 workers per 1,000 square feet while the businesses occupying the remainder of the space would employ 2 workers per 1,000 square feet. o The hotel would employ 0.7 workers per roorn. o The staff of the for -profit educational facility would be comprised of 50 instructors and administrators. o The project would employ 30 people in leasing, property operations and maintenance and parking operations. With respect to economic benefits, one additional point should be considered. The occupants of the proposed rental apartment units will spend approxirnately 20 percent of their incomes while in residence on retail goods and in restaurants. While a small portion of their expenditures will likely occur on -site, substantial amounts will occur off -site, providing support for additional jobs in the retail and food and beverage sectors as well as additional indirect and induced jobs. MEAI further believes that the preponderance of these additional jobs will be located within the City of Miami and/or Miami -Dade County. Based on conventional underwriting standards used to determine the level of income required to make a specific level of rent attainable and assuming a 95 percent annual rate of occupancy, MEAI estimates that households residing at the Subject Project will have a combined income approximating $83.6 million annually and will spend approximately $16.7 million annually in retail and food and beverage establishments. Fiscal Benefits The term "`fiscal benefits'' refers to the positive impact that the Miami Produce mixed -use project will have on the finances of the City of Miami, Miami -Dade County and the other two jurisdictions in which it will be located. Table 2, on the next page, surnmarizes the fiscal benefits that the project will generate on both a non -recurring and annual recurring basis for each jurisdiction. With respect to the table, the following points are noted: • The amount of ad valorem taxes that the Subject Project will generate on an annual basis for the City of Miami's General Fund as well as all the other funds shown in Table 2 is nearly 47 times greater than the amount that each of those funds will collect in the current fiscal year on the properties on which it will be built. Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink©bellsouth.net NOTICE Completion of stalf review indexes permit application meets minimum reguirenents under Miami gland/or the City of Miami Code, only Tvs permit application will need tobesdMadWed fora puck hearing In accordance with timelines set fort In the City of Miami Code. The applicable decision -mating Cady vnll review Otte permit application at the public hearing and tender either a recommendation or a final decision 263 2N9 Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 7 Table 2 *Or"P LICyFq o*2 eF % a� 2 a NOTICE Completion of staff review indexes permit application meets minimum requirenents under Miami 21and/or the City of Miami Code, only. Ibis permit application wih need be he scheduled for a public hearing In accordance wren nmeunes set forth Inthe city of Miami Code. The applicable decison-mfding toady WO review the pent application M the public hearing and render either a recommendation or a anal decision. PZ-18 263 01/2 /19 -, - Miami Produce Mixed -use Project (2018 Constant Dollars) Jurisdiction Non -recurring Recurring City of Miami Master Building Permit Fees _ $ 2,150,000 Trade -related Building Permit Fees ** Impact Fees _ $ 6,157,610 Certificates of Completion and Occupancy $ 621,485 Ad valorem Taxes General Fund 3,013,270 Debt Service Fund _ $ 240,486 Utility Taxes and Franchise Fees ** Occupational License Fees ** Miami -Dade County Road Impact Fees $ 12,216,533 Water & Sewer Connection Fees $ 1,906,966 Building Permit Surcharge $ 279,000 Ad Valorem Taxes General Fund $ 1,891,028 Debt Service Fund $ 162,080 Library Fund $ 115,077 Local Option Sales Taxes $ 1,081,675 Hotel Occupancy Taxes $ 845,121 Water & Sewer Service Charges ** Occupational License Fees ** Miami -Dade Public School District School Impact Fees $ 1,526,128 Ad valorern Taxes Operating Fund $ 2,744,825 Debt Service Fund $ 89,144 Children's Trust (Ad valorem taxes) $ 189,350 *' Amount cannot be estimated based on the information currently available. Source: Miami Produce Center, LLC; Relevant sections of the City of Miami Code; Miami -Dade County; Miami -Dade County Property Appraiser; Miami Economic Associates, Inc. • The estimate shown above of the impact fees to the City of Miami and Miami -Dade County and the water and sewer connection fees that will be paid to the Miami -Dade Water & Sewer Department are understated because they do not include the fees that will need to be paid on the proposed for -profit educational facility due to fact the published fee schedules do not provide a method for calculating the fees that will need to be paid on a facility of the type Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 8 proposed. The estimate of water and sewer connection fees is also understated does not include the amount that will need to be paid on the meters through whic will be provide because there is not sufficient engineering information currently availa know the number and sizes of meters that will be installed. Finally, the amounts of the trade - related building permits cannot be estimated at this time based on the information currently available. NOTICE Completion of staff r.ow indicater permit application meets tin requirenents under Miami Miami/or Me City of Miami Co.,, only. Ms permit application wain.]. bestl>edbled for a public hearing In accordance WM timetirws set (ordain the City of Miami Code. The applicable pecison-malting body vnll review the permit application at thepubllc hearing and render either rewmmeMation or a hreldedson. • The estimate of ad valorem taxes shown in Table 2 are understated since they are based solely on the estimated value of the real property that will exist at the proposed project when it is developed. Ad valorem taxes will also need to be paid on the personal property such as furniture, fixtures and equipment in the non-residential uses. • Certain benefits identified in Table 2 cannot be estimated at this time because insufficient information is available to do so; however, the payment of these benefits will provide increased revenue for the City of Miami and/or Miami -Dade County. That will be particularly true in the case the amount the City of Miami will collect in utility taxes and franchise fees. One additional point should be noted. As discussed in the preceding section when the Subject Project was described, it is well -located for its residents to take advantage of Metrorail and Metrobus service and as such should increase transit ridership, potentially enabling Miami -Dade County --- and the taxpayers --- to reduce the amount that those services need to be subsided with funds raised through ad valorem taxes. Bases of Estimates of Fiscal Benefits The materials that follow explain how the estimates of fiscal benefits presented in Table 2 were calculated. Ail monetary amounts are in 2018 Constant Dollars. Non -recurring Fiscal Impacts • The amount the City of Miami collects for general building permits for a multi -family residential and/or commercial project is based on the amount that will be spent to build it in terms of hard costs. The rate charged is 1.0 percent for all' costs up to $30.0 million and 0.5 percent on all costs above that figure. Eased on estimated hard construction costs approximating $400.0 million, the general building permit fee and the associated fees just enumerated will total $2,150,000 A Miami -Dade Code Compliance fee in the amount of $279,000 will also need to be paid. • The various trades involved in constructing a new project including the roofing, electrical, plumbing, structural, mechanical, elevator, swimming pool and fire safety system contractors will also be required to pay permit fees on their work at a rate of 1.0 percent of the dollar value of their work. Calculation of the fees that the trades will pay requires that the project's final engineering drawings be completed, which has not yet occurred. Accordingly, the trade -related fees that will be paid cannot be quantified at this time. The City of Miami charges impact fees on all new construction projects for police, fire -rescue and general services. Park impact fees are also paid on residential units. For the purpose of Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr, Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 9 calculating these fees, it is assumed that the space occupied by restaurant classified as retail space. Based on the quantities of development proposed and current impact fee rate schedule, it is estimated that impact fees totaling $6,157,610 paid to the City of Miami on the proposed rental apartment units, hotel, office space and retail and restaurant space. Additional impact fees may also need to be paid on the NOTICE Car.leuon or eux reaiew in.aree permit application mace mein -urn regulrenents under Miami Clandiorn. City of Miami Co., only. m, permit application will need . eexnmuea roc a public Haring In accordance vnh timelines set fort Inthe City a Miami Code. The applicable decision -making bodyll rear e he permit application at thepublic hearing and render either recommendation or a final dedson educational facility; however, the published rate schedule does not indicate a fee for the type of educational facility proposed in the Subject Project. New projects within the City of Miami are required to pay road impact fees to Miami -Dade County. When the project includes residential units, it also needs to pay impact fees to the Miami -Dade County Public School District for schools. Based on the quantities of development proposed and the County's current impact fee schedule, road impact fees in the amount of $12,216,533 will be need to paid on the proposed rental apartment units, hotel, office space and retail and restaurant space. Additional impact fees may also need to be paid on the educational facility; however, the published rate schedule does not indicate a fee for the type of educational facility proposed in the Subject Project. School impact fees in the amount of $1,526,128 will also need to be paid. • The Miami -Dade Water & Sewer Department requires that base connection fees be paid to activate water and sewer service for a new project. Based on the amount of proposed development, the County's estimated gallonage per use and a rate of $6,99 per gallon connection charge, the Subject Project will need to pay $1,906,966 in base connection charges. Additional monies will be owed dependent on the number of meters through which service is provided and the size of the meters. Since these engineering parameters have not be established, a fee estimate with respect to the meters cannot be formulated at this time. • Once construction of the Subject Project has been completed, Certificate of Occupancy fees of $105 per unit will be need to be paid for each rental apartment unit and certificate of completion fees will need to be paid on the hotel, office, retail and restaurant space and the educational facility in the amount of $0,10 per square feet. Accordingly, fees in the amount of $621,485 will need to be paid for these certificates. Recurring Fiscal impacts • The millage rates currently being levied for ad valorem tax purposes by the governmental entities referenced on Table 2 are shown at the top of the next page. The ad valorem tax revenues projected were calculated by applying these millage rates to proposed project's estimated taxable value, which was assumed to be $405.2 million, which is a figure that equates to the current assessed value of the land on which the Subject Project will be developed plus the estimated hard cost to construct it. Miami Economic Associates, Inc, 6861 S.W. 89« Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@7bellsouth.net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 10 NOTICE Completion of staff reaiew indicates permit application meee mitimtrn requirements under Miami Claud/orate City of Miami Co.,, only. This permit application wig reed M EesCreEtled for a punk hearing In accordance WM armllnes set forth In the City of Miami Code. The applicable clecison-malting Early ll review the permit application at them.. hearing and render either recommendation or a final decison. Rate/$1000 Entity/Fund Taxable Value `� - - Taxes ,r 01/2, City of Miami VIE General Fund 7.4365 $ 3,013270 Debt Service Fund 0.5935 $ 240,486 Miami -Dade County General Fund 4.6669 $ 1,891,028 Debt Service Fund 0.4000 $ 162,080 Library 0.2840 $ 115,077 Miami -Dade County Public Schools Operating 6.7740 $ 2,744,825 Debt Service 0.2200 rp 89,144 Children's Trust 0.4673 $ 189,350 • 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 the proposed Miami Produce mixed -use project will be dependent on the amount of these services used by the project's residents, hotel guests and commercial tenants; therefore, it cannot be quantified at this time. • The Miami -Dade Water & Sewer Department will provide water and sewer services to Subject Project. The service fees that will be generated will be a determined by usage and the number and the size of the meters through which service is provided. Since the engineering parameters of the proposed project are not yet known, an estimate of the service fees earned cannot be formulated at this time. • Both the City of Miami and Miami -Dade County will collect occupational license fees from the operators of the hotel the for -profit educational facility as well as the occupants of the proposed office, retail and restaurant space at the Subject Project. The amounts collected cannot be estimated at this time since they wile depend on knowing the exact nature of the businesses housed in the retail space, which is not currently known. • Miami -Dade County will collect a 1-cent County option sales tax on rents paid for the commercial space the proposed project as well as on the overwhelming preponderance of the sales receipts of the project's retailers and restaurants. The amounts collected will be shared equally by the Miami -Dade Health Trust and Miami -Dade Transit. For the purpose of this analysis, it has been assumed that the rental apartment units as well as the office, retail and restaurant space will be 95 percent occupied on an annual basis and that 90 percent of the sales in the 18,700 square feet of space occupied by retail establishments will be exempt from sales tax. Based on these assumptions. and the information previously presented regarding rent levels and the prospective operating performance of the proposed hotel and retail and restaurant space, it is estimated that County option sales taxes in the amount of $1,081,675 will be collected on annual basis Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsauth.net 63 /19 Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 11 • The proposed hotel will be required to pay hotel occupancy taxes to Miami -Dade the revenues it records on the sale of room -nights at a rate of 6 percent. As achieves an annual occupancy rate of 85 percent on its 227 rooms and an average rate per occupied room of $200, hotel occupancy taxes in the amount of $845,121 will need to paid NOTICE Car pleton of staff reaiew in.ate: permit application meee mitirrarn regulrenen. under Miami Clandiorate City of Miami Co., only. m, permit application wig need . bexnmuea roc a public Marring In accordance unm nrneunea set forth Intl. City a Miami Code. The applicable pecison-malting body vnll retiev the permit application at thepublic hearing and render either recommendation or a hrel dedson. Closing The analysis performed by MEAI demonstrates that development of the proposed Miami Produce mixed -use project would be highly beneficial fiscally to the City of Miami. Miami -Dade County and the other jurisdiction in which it will be located. It will also provide employment opportunities for residents of the City of Miami and/or Miami -Dade County both while it is being built and after construction has been completed. 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@6ellsouth.net Evaluating unlicensed DynamicPDF feature. Click here for details. [31:45:d18] Mr. Francisco J. Garcia Director, Planning City of Miami May 14, 2018 Page 12 Appendix Minnesota IMPLAN Input -Output Model NOTICE Completion of staff review metre: permit application meets mitimrn requlrenen. under Miami ziarmrorthe vccnr�met ayoretwir i cp oe,oNdmg I,n azapicfntt'mnnw;unes t foMoineay MiamICota.plcapplicable on -making eendll retied \ the permit application at tpubc hearing render recommendation or final decision, PZ-18-263 01/22/19 The Minnesota IMPLAN Input -Output Model relies on multiplier analysis which quantifies the cumulative effect of dollars inserted into the regional economy. As a dollar moves through the region, it creates additional revenue for linked businesses and/or their employees who also spend that money. More simply, expenditures dispersed by one entity become revenue to another, continuing an economic cycle which ultimately dissipates, bleeding into other regions or areas. Although a number of economic models are available, they work in fundamentally similar ways and center on the same indicators. The Minnesota IMPLAN model was initially created over 35 years ago at the University of Minnesota and has been upgraded on a continuing basis in the ensuing years. The multiplier impacts calculated by the Minnesota IMPLAN model are based on input-output methodology, which explicitly considers the inter -industry linkages that exist within an economy. Each industry needs labor and inputs from other industries in order to produce economic output. Whenever an industry experiences an increase in the demand for its output, many other industries within that economy indirectly experience an increase in demand as well because of these inter -industry linkages. This increase in demand that results from the need for material inputs is called the indirect effects. In addition, an increase in production within a region also leads to an increase in household income through the hiring of workers, which in turn generates further demands for goods and services within the region. Firms also need to expand their base of physical capital to meet higher levels of demand, and this too stimulates regional economic growth. The latter effects are referred to as induced effects. The inter -industry linkages and the induced effects on consumer and capital spending lead to successive rounds of production, and this process results in an increase in output that exceeds the initial change in demand, or a multiplier effect. Similarly, the increase in household income will exceed the initial payroll increase encountered in the industry that experienced the original increase in demand. The total change in employment in the regional economy is a multiple of the direct change in employment. In addition to estimating employment, MEAT also used tie Minnesota IMPLAN model to quantify the total earnings or labor income of the direct, indirect and induced workers as well as the total gross domestic product, or value added, that would result from the efforts of the direct, indirect and induced employees. Labor income consists of all forms of employment income including wages and salaries and proprietor income. Gross domestic product (GDP), also known as value-added, is the increased value of a product or service as the result of the economic inputs (labor and capital) expended at a given stage, GDP is the sum of wages and salaries, proprietor income, interest and indirect business taxes. Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156 Tel: (305) 669-0229 Fax: (305) 669-8534 Email. meaink@bellsouth.net