Transcript Age of Population

Fiscal Impact Analysis – Reed
Putnam Urban Renewal
Project
Fiscal Impact Analysis – City of Norwalk, Connecticut
October 5, 2006
Prepared by:
RKG Associates, Inc.
Economic, Planning and Real Estate Consultants
277 Mast Road
Durham, NH 03824
Presentation Outline

Project Scope and Approach

Methodology and Assumptions

Net Annual Fiscal Impact

Summary
7/17/2015
2
Project Scope and Approach

Purpose – Evaluate the potential fiscal impacts to the City of
Norwalk that may be expected to occur under different
development scenarios at Reed Putnam parcels 1, 2 & 4

Approach and Tasks

Compare the municipal costs of providing services to a
development to the revenues generated by the proposed
development




7/17/2015
Determine population, school-age children and employment
Project revenues from new taxes, fees, etc.
From projected growth, estimate public service costs
Compare costs to revenues
3
Methodology and Assumptions
Scenario One:
(Approved Plan)
1,000,000 SF Office Space
50,000 SF Retail Space
Scenario One-A:
(Tax Abatement)
1,000,000 SF Office Space
50,000 SF Retail Space
(Assuming State of Connecticut Urban Jobs benefit - 40% abatement of property
taxes for five years)
Scenario Two:
(Staff Recommendation)
500,000 SF Office Space
150,000 SF Retail Space
80,000 SF (130 Units) Hotel
300 Condominium Units (Mix of 1 and 2 Bedrooms)
Scenario Three:
(95/7 Proposal)
485,000 Office Space
225,000 SF Retail Space
80,000 SF (130 Units) Hotel
310 Condominium Units (Mix of 1 and 2 Bedrooms)

Project built in phases (up to ten years)



100,000 SF office space per year;
85,000 SF retail space per year;
150 condominium units per year


Reduced to 60 per year (conservative market repositioning estimate)
Hotel absorbed in one year (in Year 10 upon completion of office
development)
7/17/2015
4
Methodology Cont’d

Rising costs of providing public services matched by comparable
increase in revenues

Per capita method used to allocate costs

Current costs best measure of future costs

Municipal officials interviewed

6 sources of school-age children multipliers/methods

Constant dollars, tax rates, tax base distribution, etc.

Property values derived from combination of:



Tax assessment data
Comparable properties
Recently completed market studies
7/17/2015
5
Net Annual Fiscal Impact

All scenarios generate an annual fiscal benefit

$4.3 million (Scenario 1 & 1A) to $5 million (Scenario 2 & 3)
 NPV of Scenarios 2 & 3 at least $11 million more than 1 & 1A over 10
year period

Impact does not include one-time permit/inspection fees

$1.6 million (Scenario 1 & 1A)
 $1.8 million (Scenario 2) and $1.9 million (Scenario 3)


Could serve as (re)development catalyst for neighboring
properties
Caution in incentives for large-scale office development
Few “net new” office users in County
 Adding more supply could depress current/future lease rates
 No indication that incentive will provide marketing advantage to site

7/17/2015
6
Figure 1. Net Fiscal Impact by Year
$6,000,000
Full Build-Out
(Year 10)
$5,000,000
$4,000,000
$3,000,000
$2,000,000
Impact of Tax Abatement
$1,000,000
$0
Year 1
Year 2
Year 3
Year 4
Scenario 1
7/17/2015
Year 5
Scenario 1A
Year 6
Scenario 2
Year 7
Year 8
Year 9
Year 10
Scenario 3
7
Cumulative Impact and NPV
Figure 2. Cumulative Net Fiscal Impact [1] and Net Present Value [2]
$45,000,000
$40,000,000
$38,498,674
$36,601,842
$35,000,000
$29,246,803
$30,000,000
$25,000,000
$27,805,984
$22,898,396
$19,679,252
$20,000,000
$16,864,410
$14,111,321
$15,000,000
$10,000,000
$5,000,000
$0
Scenario 1
Scenario 1A
[1] Net fiscal impact from each year aggregated over the ten year absorption period
[2] Net present value of income stream over the entire ten-year period
7/17/2015
Scenario 2
Cumulative Net Fiscal Impact
Scenario 3
Net Present Value
8
Summary

All scenarios generate (comparable) annual fiscal benefit
Phasing schedule influence
NPV of Scenarios 2 & 3 higher than Scenarios 1 & 1A
Doesn’t include one-time fees
All scenarios may influence neighboring (re)development
Caution needed re: adding to office supply

Questions?





7/17/2015
9