HomeMy WebLinkAboutTab D3 - Fiscal and Economic Impact StudyApril 30, 2018
Mr, Francisco J. Garcia
Director, Planning
City of Miami
444 SW 211 Avenue 3r° Floor
Miami, FL 33130
Re: Economic and Fiscal Benefits Analysis
Expansion of Brickell City Centre Special Area Plan
Dear Mr. Garcia:
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 Swire properties proposed expansion of the
Brickell City Centre Special Area Plan (SAP). The purpose of the proposed expansion of the
Brickell City Centre SAP is to allow for the development of 950 condominium units and 85,000
square feet of retail space as part of that pian in two buildings that will be located along the
western frontage of South Miami Avenue between SW 7t1 Street and the Miami River. For the
purposes of this report, the Subject Project will also be referred to as 550 S. Miami Avenue. The
other jurisdictions considered in our analysis include the Miami -Dade County Public School
District and the Children's Trust of Miami -Dade County.
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 the
differences may be significant. All monetary amounts in this letter are expressed in 2018
Dollars.
6861 S.W. 891th Terrace Miami, Florida 33156
Tei; (3051669-0229 Fax: (8661496-6107 Email: meaink0bellsouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 2
Key Findings
The key findings of the analysis MEAT performed are as follows:
Economic Benefits
During the period in which the proposed project at 650 S, Miami Avenue is being developed,
6,692 jobs will be created, including 4,036 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
$354.75 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 235
workers will be employed on-site annually on a full-time equivalent basis in the proposed
retail and restaurant space. An additional 87 indirect and induced workers will also be
employed on a full-time equivalent. The earnings of ail these workers on an annual basis are
expected to approximate $8.0 million annually. It should, however. be noted that the number
of people employed on-site will likely be greater than 235 because substantial portions of
the workforces in the retail and food and beverage sectors are part-time workers.
The occupants of the proposed condominium units will spend approximately 20 percent of
their incomes while in residence on retail goods and in restaurants. While portions of their
expenditures will likely occur within the overall Brickeli City Centre SAP, 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.
Fiscal Benefits
During the period that the proposed project at 650 S. Miami Avenue is being developed, the
City of Miami will collect approximately $7.5 million in general and trade -related building
permit and associated fees, impact fees, Downtown Miami DRI supplemental 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 $3.76
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 more than $4.9 million
in road impact fees and water and sewer connection fees and the latter more than $1.54
million in school impact fees.
• After the development the proposed project is fully completed, the general/operating funds
of the City of Miami, Miami -Dade County and the Miami -Dade County Public School District
will collect approximately $13.86 million annually in ad valorem taxes, with the City's share
Miami Economic Associates, Inc. 6861 S.W. 891h Terrace Miami, Florida 33156
Tel. (365) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsauth.net
Mr. Francisco I Garcia
Director, Planning
City of Miami
April 30, 2018
Page 3
exceeding $5.44 million 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 22 times greater
than the amount they collected in the current fiscal years on the properties on which the
Subject Project will be developed.
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
Project Description
3
Economic Benefits
4
Fiscal Benefits
6
Bases of Estimates of Fiscal Benefits_
8
Closing
11
Project Description
As discussed in the introductory paragraph of this letter report, Swire Properties is proposing to
expand of Brickell City Centre Special Area Plan (SAP) to allow for the development of 950
condominium units and 85,000 square feet of retail space as part of that plan in two buildings
that will front S. Miami Avenue between SW 7t1' Street and the Miami River. The two buildings
will be separated from each other by the portion of the south bound lane of S. Miami Avenue
that takes traffic in southwest direction along a diagonal alignment from the South Miami Bridge
to SW 15t Avenue. The first, or southern, building which will be located on a block between SW
7t' Street and the portion of S. Miami Avenue just described would contain 550 condominium
units and 85,000 square feet of retail space. The second, or northern, building which will have
near frontage on the Miami River, will contain the remaining 400 condominium units.
The Brickell City SAP was originally approved in July, 2011, at which time it encompassed
approximately 9.04 acres over 4 blocks of land generally located south of the Miami River, west
of Brickell Avenue, North of S. 81h Street and east of NW 1" Avenue. Since it was originally
approved, the plan for the project has evolved and it now encompasses approximately 11.5
acres of land. The quantities of development that have been approved, exclusive of parking,
loading, service and circulation spaces, are as follows:
• 1,400 residential units
• 723,575 square feet of retail and food and beverage space
• 961,400 square feet of office space
• 483 hotel keys
To date, 913 residential units, 551,482 square feet of retail and food and beverage, 286,567
square feet of office and 363 hotel keys have been developed.
With respect to the development proposed as part of the expansion, the condominium units will
include a mix of studios (15 percent), 1 -bedroom units (30 percent), 2 -bedroom units (50
percent) and 3 -bedroom units (5 percent). The 550 units in the southern building will contain
approximately 650,000 square feet and are expected sell for an average price of $790 per
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 4
square foot while the 400 units in the northern building will be comprised of approximately
400,000 square feet and self for an average price of $830 per square. The higher average price
per square foot in the northern building reflects its near riverfront location. Accordingly, it is
estimated that gross sales proceeds totaling $845.5 million will be realized. It is also expected,
based on the experience of the sales recorded in the already completed residential buildings at
Brickell City Center, that 20 percent of the units will be serve as the primary residence of the
buyers and thus qualify for the Homestead Exemption for the purpose of determining their
taxable value. The remainder of the units will be owned by people who have not declared
themselves United States and/or Florida citizens including seasonal/vacation homeowners and
renters.
Based on information provided to MEAI by Swire Properties, it is expected that 25 percent of the
proposed 85,000 square feet of retail space will by occupied by food and beverage
establishments with remainder of the space occupied by various types of retailers. The retail
space is expected to rent for $150 per square feet triple net and record sales volumes that will
average $800 per square foot.
Information that was also provided by Swire Properties also estimates that the two buildings will
cost a total of $465.0 million to construct in terms of "hard" costs. An additional $79.0 million will
be expended for "soft' costs including, but not limited to, architectural and engineering fees,
building and permit fees, insurance and real estate taxes during the construction period, project
management and supervision, marketing and sales and leasing commissions. Accordingly, a
total of $544.0 million will be spent to develop the buildings that would be entitled by the
proposed expansion of the Brickell City Centre SAP.
Economic Benefits
The term "economic benefits" relates to the positive impact that the project at 650 S, Miami
Avenue, 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
annual basis each year after the project has been fully completed. Table 1 at the top of following
page summarizes the economic benefits that the Subject Project will generate. The monetary
amounts shown are expressed in 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@pellsouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 5
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 "induced 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 by 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 $465 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.
■ The estimates of recurring benefits are annual amounts expressed in 2018 Constant Dollars
for each year after development of the entire project has been completed. The indirect and
induced jobs as well as labor income and gross domestic product were estimated based on
the 235 direct employees on a full-time equivalent basis in the proposed project's retail and
restaurant space. The number of full-time equivalents was estimated by assuming the
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel. (305) 669-0229 Fax: (305) 669-8534 Email, meaink@belisouth.net
Table 1
Economic Benefits
650 S. Miami Avenue
Brickell City Centre SAP
2018 Constant Dollars
Benefits
Non-recurring
Recurring
Jobs Created
Direct
4,036
235
Indirect
1,124
35
Induced
1,532
52
Total
6,692
322
Labor Income All workers
$ 354,746,600
$ 7,947,000
Gross Domestic Product Value-added $ 449,475,700
$ 10,950,900
Source: Swire Properties; 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 "induced 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 by 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 $465 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.
■ The estimates of recurring benefits are annual amounts expressed in 2018 Constant Dollars
for each year after development of the entire project has been completed. The indirect and
induced jobs as well as labor income and gross domestic product were estimated based on
the 235 direct employees on a full-time equivalent basis in the proposed project's retail and
restaurant space. The number of full-time equivalents was estimated by assuming the
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel. (305) 669-0229 Fax: (305) 669-8534 Email, meaink@belisouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 6
21,250 of food and beverage space will be occupied by 5 workers per 1,000 square feet and
that 63,750 square feet of retail space will be occupied by 2 workers per 1,000 square feet.
However, it should be noted that the number of workers employed on-site likely be greater
than 235 because high percentages of the workforce in retail and food and beverage sectors
are comprised of part-time workers.
■ Table 1 understates the recurring benefits because it does not take into account the workers
who will be employed on-site to operate and maintain the proposed condominiums and retail
space inclusive of those involved with the parking facilities. The number of such workers will
ultimately be dependent on the extent to which certain functions are automated or handled
by outside contractors.
With respect to economic benefits, one additional point should be considered. The occupants of
the proposed condominium units will spend approximately 20 percent of their incomes while in
residence on retail goods and in restaurants. While portions of their expenditures will likely
occur within the overall Brickell City Centre SAP, 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. MEN further believes that the preponderance of these
additional jobs will be located within the City of Miami and/or Miami -Dade County.
Fiscal Benefits
The term "fiscal benefits" refers to the positive impact that the expansion of the Brickell City
Center SAP to allow for the development of the project proposed at 650 S, Miami Avenue 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, summarizes 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 will
more than 21 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.
The estimate of ad valorem taxes shown 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 proposed retail and restaurant space.
Certain benefits identified in the table 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.
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (3055) 669-0229 Fax: (305) 669-8534 Email: meainko@bellsouth.net
Mr. Francisco J. Garba
Director, Planning
City of Miami
April 30, 20118
Page 7
— Table 2
Summary of Fiscal Benefits
650 S. Miami Avenue
Brickell City Centre SAP
2018 Constant Dollars
Jurisdiction Non-recurring
Recurring
City of Miami
Master Building Permit Fees $ 2,266,037
Trade -related Building Permit Fees **
Impact Fees
Police $ 142,015
Fire $ 407,845
General Services $ 235,125
Parks $ 3,761,050
Downtown DRI Supplemental Impact Fees $ 551,688
Certificates of Completion and Occupancy $ 108250
Ad valorem Taxes
General Fund
$
5,048,640
Debt Service Fund
$
402,927
Utility Taxes and Franchise Fees
**
Occupational License Fees
**
Miami -Dade County
Road Impact Fees $ 3,251,426
Water & Sewer Connection Fees $ 1,695,730
Building Permit Surchar e $ 279,000
Ad Valorem Taxes
General Fund
$
3,168,358
Debt Service Fund
$
273,560
Library Fund
$
192,807
Water & Sewer Service Charges
**
Occupational License Fees_
**
Local Option Sales Taxes
**
Miami -Dade Public School District
School Impact l=ees $ 1,541,300
Ad valorem Taxes
Operating Fund
$
4,631,045
Debt Service Fund
$
150,403
Children's Trust Ad valorem taxes
$
317,250
** Amount cannot be estimated based on the information currently available.
Source: Swire Properties; Relevant sections of the City of Miami Code; Miami -Dade County; Miami -Dade County
Property Appraiser; Miami Economic Associates, Inc.
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669-0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 8
Bases of Estimates of Fiscal Benefits
The materials that follow explain how the estimates of fiscal benefits presented in Table 2 were
calculated. All 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. At the time that fee is collected, additional fees will
also be collected including an energy conservation fee, an application fee, fees of zoning
and public worms reviews, a sanitary waste surcharge, a solid waste surcharge and building
code compliance fee. Based on estimated hard construction costs approximating $465.0
million, the general building permit fee and the associated fees just enumerated will total
$3,066,961. However, a 33 percent discount will be applied since the Subject Project will
utilize a private provider for plan review and inspections, reducing the amount that needs to
paid to $2,266,037. 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
calculating these fees, it is assumed that the space occupied by restaurants would be
classified as retail space. Based on the quantities of development proposed and the City's
current impact fee rate schedule, it is estimated that impact fees totaling $4,546,035 will be
paid to the City of Miami with respect to the Subject Project. Of this amount, $142,015 will
be for police, $407,845 for fire -rescue, $235,125 for general services and $3,761,050 for
parks.
• The City of Miami also charges supplemental impact fees on new projects that are located in
the portion of the City of Miami where development is controlled by the Downtown Miami
DRI. Based on the quantities of development proposed and current supplemental impact fee
rate schedule for the Downtown Miami DRI area; it is estimated that supplemental impact
fees totaling $551,688 will need to be paid.
New projects within the City of Miami are required to pay road impact fees to Miami -Dade
County. However, when the project is located within the area where development is
controlled by the Downtown Miami DRI, the amount that needs to paid is discounted by 30
percent from those shown on the County's published rate schedule. When the project
includes residential units, it also needs to pay impact fees to the Miami -Dade County Public
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tela (305) 669.0229 Fax: (305) 669-8534 Email: meaink@bellsouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 9
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 $3,251,426 will be
need to paid after the discount is applied while school impact fees in the amount of
$1,545,300 will need to be paid.
The Miami -Dade Water & Sewer Department requires that connection fees be paid to
activate water and sewer service for a new project. In this instance, credits may be available
for the existing retail and restaurant space on the site of the proposed project at 650 S.
Miami Avenue. Not accounting for any credits, based on the amount of proposed
development and the County's estimated gallonage and $6,99 per gallon connection charge
and $4.24 per gallon Brickell Basin special connection charge the Project will pay
$1,695,730 in 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
will be need to be paid for each condominium and certificate of completion fees will need to
be paid on the retail and restaurant space. In accordance with the City of Miami's fee
schedule, a total of $108,250 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 in the table 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 $678.9 million for funds of all
the jurisdictions shown except those of the Miami -Dade County Public School District. The
taxable value for the School District's funds was assumed to be $585.65 million These
taxable values were estimated in the manner described below:
o With respect to the 950 proposed condominium units, the Constitution of the State of
Florida mandates that real property should be assessed at 100 percent of its market
value, which would be $845.5 million based on the estimate of the projected gross
proceeds that would be realized from their sales. However, general new
condominium units are assessed when initially place on the tax rolls at approximately
80 percent of their sales priced, which in this instance would be $676.4 million. In
order to estimate taxable value, it is then necessary to reduce the assessed value to
account for the fact that 20 percent of the units will qualify for the Homestead
Exemption. When the $50,000 Homestead Exemption allowed by all taxing
jurisdiction shown in the table below is applied for all jurisdiction with the exception of
the Miami -Dade Public School District, the taxable of the value the proposed
condominium units will be $666.9 million, For the School District, which allows a
Homestead Exemption of $25,000, the taxable value of the condominium units will
be $671.55 million.
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669-0229 Fax: (305) 669.8534 Email: meaink@bellsouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 10
o Based on comparable properties in the Brickell area, MEAT estimate the assessed
and taxable value of the 85,000 square feet of retail and restaurant space at $12.0
million
Entity/Fund
Rate/$1000
Taxable Value
Taxes
City of Miami
General Fund
7.4365
$ 5,048,640
[Debt Service Fund
0.5935
$ 402,927
Miami -Dade Count
General Fund
4.6669
$ 3,168.358
Debt Service Fund
0.4000
$ 271,560
Library
0.2840
$ 192,807
Miami -Dade County Public Schools
Operating
6.7740
$ 4,631,045
Debt Service
0.2200
$ 150,403
Children's Trust
0.4673
$ 317,250
Source: Swire Properties; Miami -Dade County Property Appraiser; Miami Economic Associates, Inc.
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 project at 650 S. Miami Avenue will be dependent on
the amount of these services used by the project's residents and commercial tenants;
therefore, it cannot be quantified at this time.
+ The Miami -Dade Water & Sewer Department will provide water and sewer services to the
proposed expansion of the Brickell City Centre SAP. 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 occupants of the proposed commercial space at the Subject Project. The amounts
collected cannot be estimated at this time since they will 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. Since it is the
percentages of sales that are subject to sales tax and those that are tax-exempt are not
presently known, the amount of County local option sales tax cannot be estimated at this
time.
Miami Economic Associates, Inc. 6861 S.W. 89th Terrace Miami, Florida 33156
Tel: (305) 669.0229 Fax: [305] 669-8534 Email: meaink@bellsouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 11
Closing
The analysis performed by MEAI demonstrates that development that would occur as a result of
the proposed expansion of the Brickell City Centre SAP 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.
MEAI is available to respond to questions regarding the findings of our analysis and their bases.
Sincerely,
Miami Economic Associates, Inc.
Andrew Dolkart
President
Miami Economic Associates, Inc. 6869 S.W. 89+h Terrace Miami, Florida 33956
Tel: (305) 669.0229 Fax: (305) 669-8534 Email: meaink&bellsouth.net
Mr. Francisco J. Garcia
Director, Planning
City of Miami
April 30, 2018
Page 12
Appendix
Minnesota IMPLAN Input -Output Model
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 the 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