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HomeMy WebLinkAbout02-14 Impact Analysisi Market and Fiscal lmpacts ;Analyses Heritage "Commons " Frederick County, Virginia i Prepared.for: . Mr. 'Bruce A. Griffin. & Mr: Matt Millstead 'Frederick County Center, LLC f p August, 2014 S. Patz' and Associates, Inc. 46175 Westlake Drive,'Suite 400 Potomac Falls, Virginia 20165 S. AIZ , AS -c� I'AT ES INC : 0 L_' X L E S T,X T I `C- ON, & Ui L A N`T S■ August 26, 2014 Mr. Bruce A. Griffin Mr. Matt Milstead C/o Frederick' ' ounty Center/`LLI�� -140 North HatcherAventie Purcellville, Virginia-.20132 Gentlemen: This will-submit our, market study and. resulting fiscal impact analysis (•IA), for the proposed mixed-use :development, on the 150+"acre Heritage ge Commons property, which is located along Front Royal Pike, just south of the 1;81/ U.S. Route 50 interchange, in Frederick.. County, djacent to the eastern bcitindary line. of the City of ,ginia.an 'Winchester, Virginia. The� development is expected to be :started in early-2015 and developed over a 15± year period, depending upon future market-•rend's. The develcipmerilt proposal 'is summarized 'below. The: proposal is for 1,200 housing units and, 700,000± square feet of commercial space: for' office and retail uses. The 700,000 square feet includes -the, 150,000 square foot Fiederick County- Administration Building,,that:is.Ao be'built,on the,site. '110usih Square • MarketRat76 Apartments .1,050 • For-Sale Tbwtihomes 150 Total residential -1,200 • Office Space,,,excluding County gidg. 450,000 • County Office Bbildifig 150,000 • Retail & Service 100,000 , f! 'Dotal` Commercial MOW The market analysis presented in part one of the attached report shows full market-3support fof the °proposa - 1. Given the long development period, and-, the County's commitment, , for the I ir ti :hew , administration building, .there is sufficient,markot data to .. commitment support the proposal. 4617SN6-stfake Drrve -:SLiite,,400,.-I�P6i6mae,F;311s, VifgIhi•20165-• 703T421:8101 ■ 703:4214109-fix - spatzec@cumcast;nk 2 Mi. Bruce A. Griffin Mr. Matt Milstead August 26, 2014 Based on, our market analysis;, we completed a FlA,for the full development.. The table; shown below is a summary of our, FIA. It shows a. positive 'analysis of nearly $3.6t million in net revenues over the; full development,period; with all revenues presented in constant 2014 dollars. We-also calculated the PIA in 'three; development phases - which show positive net tax revenues even if the entire development is not built out. Table 25 Total On- site;and -0, f- site Net.Fiscal Benefits'for Her. itage.Commons,:•By Five -. Year Phase afBuildout, Prederick•County, Virginia (constant $2014) Phases -:14 5 yrs 2nd.- Yrs 3rd 5'Yrs. Total Apartments $125,720 $125:3;20 $125,720 $377,180 Townhouses $361,580 $18,290 $54,870 Commercial Floor - Space. $453,450• $226,725 $2- 26,725 $906;900 Office Floor Space . 498,14 .,$87-1,74 871.74.0 $2,241 -,620 Total, Net Benefit $1,113,895 $1,242;473 ,$1,224,1:83. $3,580,570 Source: S. Patz & Associates, Inca We used conservative °numbers in our analysis: 'We also undertook the study with the assumption that the County office•building would" be on site. The $3.6 million net revenue to. accrue to -the County with the office building shows the level of net new taxes from the proposed .investment, which in turn, supports the, Heritage Commons location. Without the County office building on site, additional: retail space will likely included in the GDP: The detailed market .and economic data that, support: our conclusions are presented in the attached :report. Our methodology for the FIA calculation is fully described. If additional data or clarification.are needed, please da not hesitate to, contact US. We. remain available to continue to assist you with the successful development °of Heritage Commons, .'The :,appendix to'this report presents;our evaluation of the County's propo..sed -Developmerit Impact Model_ Sincerely, i Stuart._M. Patz President 3 Introduction ..................................................................................................................................... ......... 5 Site .................... =`='........ ............................ ......... ....... ^~ � .................................................... ............................................................ ,—=—........... 8 Heritage Commons,Development, Plan _______----'�_,,'~_.' .......... .................. l9 Eao ...................... _~,=',^.=------------`—.22� ........ —_------'=,,,`.,__',.,.--_---------=,,--.,^`24 ________,,_^____^�_______---__~._—~,=---.24 ~ = Household = ^^ ----'-=`—,~^_------------=-----_� ------� 25 'Renter —=—_+_.—_-----------'~_.---.-----------'26 � ~,.=—'--= ................ ................................... .26 , .............................................................. ^. .,^ ^'~^"=^^~"~�^'"~ �' �-----------'' , --'�7 ' i' | ' Daoe ................................. ^`.......................................................... ............... //' _ _.............................................................. ------�0 ^*~^.~,^.. -- ' � !� � � -----------'.~_=~==.-----------'^^ / _________________^^_=_____—':-----^,___—''33 . -' . | 4«ognxxxo.^-------------,'—^---=^-----------------'---^`— �4 � Towod`nomo—..-----,.=.=,^,'_^—'`___________`=—``'--__._`,_.___. 37 | Office Space ` `, ='�,=—~'`----------------.`^,�'`~�=---------'�0 ! / mm,"r, � / Srcuvnw r / _.~../ ~._ i TAx.Reve � i Property �7 | r��' � | ue��Sau� ^�.�=== .................... ........... ................................. ................................................... '^� �2 | muyoeea �� Consumer —� Utility —� Taxes `---'—'------......— ... - | Meals Tax ' . ~. .................................... ' ==^` . 55 ' K8oto/Vehicle r+c"^ve="` ` .--,---------.`~=.'^'—~.----------------~^',—_' � Slirnmary ofOn-Site .7 cvunty� Bud, --~—^-------^-----''--'`~ ` Coonty PeYCapjta �v ' 67 | Off-Site � | .—`."—_---------------'70 -- ! . ------------',,`—^----. �O ! . ` �uuvuu�y^u ----------,_,—__— _ _—_ . 71 � rnuxu __` = _/z � &8ode-------~-------------,7h ' '~ B-- Tab -'r,---' --,— 11 1 The following is the' market- study and Fiscal Impacts Analysis (FIA) in support of the proposed mixed -use development of the 150.6 -acre Heritage Commons development proposal (formerly Russell 150, LLC) located along, the - west side of Front Royal Pike (US. Route 522), south' of the 1- 81 /U.S. Route 50 interchange and opposite G Airport-', Road. Thee site extends approximately 1,250 feet ;along Route 522 and has .frontage (1,300 feet) 'pn; the east side of I 781,, at a location where a new overpass is. planned 'that will extend East Tevis 'Street in the City of Winchester east into the Heritage, Commons site and ultimately to an intersection with U.S. Route 522 at two. locations. The following,! report. is prepared in-two sections. The. first section presents the market analysis in support of ahe: mixed -use :development proposal for ,Heritage Commons. The market analysis demonstrates that market- "support. for the ;Heritage Commons proposal exists and `is based on evolving market trends in a market. area that �I ,consists of the City -:,of .Winchester and Frederick County. The expected development period for this 1,50± acre property, based on the development 'proposal `'and market trends, is approximately 15 years, from the projected start `of buil'dirig development in 2015 or 2016. i The second sectionv of the report is the Fiscal Impacts Analysis, which shows the net revenues projected from project build -out compared, with, increased expenses to the County, from the proposed on -site development. Given the fact that the development Pro pI sal', has considerable commercial space planned ,within the 40± `acres of commercialty zoned area, or 30:0% of the total developable acreage, Heritage Commons, will- generate, a positive FIA ;and: will provide considerable new net tax4 revenue to, Frederick.County over' the 2015'to 2030 period and beyond. The FIA is prepared in, three five -year development phases to; illustrate that net revenues, will accrue t' the County, during the entire, 15+ year developmerit'period'. All - revenue and expense data are presented in constant 2014 dollar values. The phasing of 5 I new development .. is based, in part; on. the.,, sponsor, -s , existing commitments for site I development at the'; time of the start: of 'development; and. 'in part, on the evolving I developmenttrends Within the market-area as calculated by the market analysis. I The following^ chart summarizes the overall development plan for Heritage Commons. 'It shows a master plan for 1,200 housing units on 75.3 acres of residential zoned :land and 700,!000 square feet ,of commercial development, including the new 1 Fredorick-County, office'building. The planned development pr' ram will be more fully expanded upon in the followmg�analysi"s. i The site setting map of the Heritage Commons site is shown next. The site is adjacent to the City of Winchester along 1 -81 and located just over one mile south of the, Route 50/17 interchange with T -81 near the Shenandoah University Campus: Number 5 on the map: shows theflocation;to the primary site entrance to Heritage Commons across from Airport Road Number 6 is the, location of the proposed.new bridge over I -81. The- Shenandoah, University Campus, is shown by Number 7. The site frontage ,runs north from ,just south .of 'Buffalo Lick Ru'n (No. 8) to the small resid'enti'al subdivision along Front Royal Avenue on ­ the north. Map A also shows the site's close proximity to several of the Winchester area`s, regional highways. Tle'Winc._hester Regional Airport, Shenandoah University Campus, historic "downtown Winchester. and Apple `Blossom Mall (Number 9) are all within close proximity to the site. The new bridge over 1 -81., along'with the extension of East Tevis 6 Housing Uniis and Square Footage 'of Commercial Space • Market R ate Apartments, 1,050 • For -Sale Townhomes 150 Total residential 1,200 • Office Space;,excluding County Bldg. 45.0;000- a County Office Building' 1.50,000 • Retail &?Service Cornmercia] 100,000 Total Commercial 700;000 The site setting map of the Heritage Commons site is shown next. The site is adjacent to the City of Winchester along 1 -81 and located just over one mile south of the, Route 50/17 interchange with T -81 near the Shenandoah University Campus: Number 5 on the map: shows theflocation;to the primary site entrance to Heritage Commons across from Airport Road Number 6 is the, location of the proposed.new bridge over I -81. The- Shenandoah, University Campus, is shown by Number 7. The site frontage ,runs north from ,just south .of 'Buffalo Lick Ru'n (No. 8) to the small resid'enti'al subdivision along Front Royal Avenue on ­ the north. Map A also shows the site's close proximity to several of the Winchester area`s, regional highways. Tle'Winc._hester Regional Airport, Shenandoah University Campus, historic "downtown Winchester. and Apple `Blossom Mall (Number 9) are all within close proximity to the site. The new bridge over 1 -81., along'with the extension of East Tevis 6 i `Street, "will provide direct access'fo 'the: Pleasant-Valley -Road corridor and to Jubal Early `Drive,'both area roadways with an abundance of retail space, medical office space and employment centers.,' Map A Heritage Commons Site Location Map o i III _ Site Description:and Development- Proposal Site Descrivtion The Herifage'I. Commons site is a. slightly rolling, irregularly shaped, 150 -acre property located 'bet�veen Interstate, 81 on the west and;Front'Royal Pike .(U.S. 522) on the east at a'location directly across; from the entrance to Airport Road. The property is vacant and partially covered with small trees and bushes, but the property is I predominantly mead'owland. Part of the, Buffalo Run stream runs through the property lion and. will be retained as opens ace and, an amen featuere. for m an east -west direct, space amenity the development.. i I Following are photos of'the site and it's setting along U.S. Route 522. The photos show views into the property from U.S. Route 522 West into the site and photos of the Route 522 corridor. At.present, this is an undeveloped, section of`Front Royal Pike, but a second :development proposal,, adjacent to Heritage Commons; called Madison. Village,, is also being studied for new development, as described below. View Into Site Showing'Topography and Tree Coverage f . 4 8 i I i i� I i j View West From,U. "S. Route 522 Expanded. View of Site - I View' South,From U.S. Route View North Along U.S. Route, 522 522/Airport Road Intersection . I Adjacent land uses consist of residential developments and vacant land,. Development- north , of the "site consists of the 40± unit Funkhouser single - family subdivision, which was :developed in the mid- 1990s. East of the site, along Front Royal ,- I Pikes are mature single-family homes in the,Miller Heights subdivision. La_ nd south_ of -the Heritage Commons site is largely vacant, but with. the adjacent parcel "of 51.3 acres pllanned for a mixed -use development with a mix of towns and 9 h apartments, called Madison Village (see Number' 10). The 46.26 -acre Madison Village site was rezoned recently to allow for 160 townl'omes and 480 apartment units, plus 107,000±.square feet of retail space, ,It is possible that sonfe development .at this property will be started by late -2014 or early- 2015. I The Heritage Commons site .is presently only accessible, via Front Royal Pike (Route 522). Route 5221°is a regional` arterial that runs north =south from the Frederick County line into the City of Winchester and then north somewhat circulating into West Virginia. Relevant for the Heritage Commons proposal is its interchange with Route 50 and close proximity,to the.Route 50/17 interchange with I -81. In front of Heritage: Commons, Route 522 is a four lane, undivided roadway that runs in a. generally north-south direction parallel to Interstate 81. Route 522 provides quick access to Mill w.00d Pike (U.S. Route 68), about one, mile north, which accesses Interstate .81's Exit 31.3,!' and :;the City of`Winchester. Route 522 also provides direct access to a150, 000± square.footWalmart located south at its intersection with'Tasker Road that opened in':early =2012. About 300 full -time employees work;at the retailer; which includes a full grocery store „garden;center and pharmacy:. 10 I ,I F1 "U.'*";' I- .1Q.-V lag P VP cl 3. Heritage Commons Site Setting Adjacent to the Walmart are two small. industrial parks: East 9 ate Industrial Park . and, jouan Global Center, which collectively include,, four tenants. The largest tenants in - Division which occupies 160,300± the industrial park are the FBI Records _n square feet at. 170 Marcel Drive, and Home Depot'Distribution Center, which occupies 755A641, square feet o'f space at 201, Rainville Road. Tenants in these parks are' detailed in the table; belbww. i 1 i i Developments at Eastpate Industrial Park and Jouan Global, Center Industrial. Park Buildine•Size Years Tenant S' ft) Built Eastaate Industrial Park '195'Rainville Rd 201453 2003 Comcast Cable' Communications 201 Rainville Rd 755,855 2003 14oii e Depot Distribution Center` (Subtotal) p (776;308) Jouan Global Center ' 141 Marcel.Dr 70,000' 1998 SpecialMade Goods & Services FBI Record's Management' 170 Marcel Dr 106,296--_ 1997 Division (Subtotal) (176; *96J Total 2389151 The next .important development area near ,Heritage, _Commons is located along and off of Airport Road, 'immediately, east of the site. Developments along Airport -Road, which include resideint'al, office and industrial uses, are detailed in the, paragraphs below, i ➢ Preston Placed East of °the single- family homes that front Front Royal Pike is Preston Place,la 236 -unit affordable apartment complex that was built in. three phases under 'the federal LIHT.0 .program :during the,.1992 ,to 1997 period. This. property is typically fully occupied and was recently renovated. ➢ Winchester Regional .Airport, a public use airport owned by the Winchester Regional Air port' Authority, is located along'this- roadway. The airport covers 375 acres and has ` iie asphaltpaved runway. Approximately 45 people work at the airport. ➢ Airport Business, Park is .located across the street from the Winchester Regional Airport along ,Airport Road. The park consists Of a total of nine structures on Aviation .Drive,; ,Airport• Road, Admiral Byrd .'Drive and Muskoka. Court. Collectively, development in this park contains :724,760± square feet-of office and industrial space; on 110± acres;, though much of this space is; flex space with office and industrial iise. The largest tenant in the industrial park is Kohl's, which operates a 422,660± square foot. distribution center that opened on a 64.27 -acre parcel in 1997 and employs° 30± people., ;M.I CAndustries, a company that manufactures machines ,that, build steel buildings, operates its International Manufacturing Facility in. a - 1?50,000± square foot °facility, at-390 Airport Road. The company opened with too employees and laddedan additional 139 employees in 2004. The most recent, building to ,open in the? industrial park is a 17;340± square :foot` structure at 170 Muskoka Court, a service 'center, operated by Averitt Express, a provider of freigl t`transportati'on and supply chain management. i ➢ Westview Business Centre 'is 1'ocated east' of the Winchester Regional Airport along Millwood,I Pike's intersections with Arbor Court, and Victory Lane. This industrial park consists of'27 structures. Collectively, Westview Business :Centre. includes, 802,3,1Q ±: square feet of space. The average .structure size in this industrial park, is 29;720± square feet. Several .tenants in Westview Business Centre are not industrial ;in nature such as Valley Cycle._Ceritenand Groves Winchester Harley-Davidson, two auto dealers that occupy over, 50,000,;square feet in the park. The largest,.structure in the park is a 100,0001- square foot warehouse owned by Virginia Storage. , Services. Larger tenants in the park. include: ■ Blue Ridge, Industries is a Winchester -based company that specialize in manufacturing custom injecting molding. Blue Ridge Industries employs 601 pe,'ople: I' Annandale .Millwork and Allied Systems Corporation is� a Winchester- based manufacturer of wall panels, hand rails. and stairs. The company employs.100t peophe on.40,000, square foot facility.. i ■ Clariant Corporation, a 30- employee chemical merchant, wholesaler, occup es,30,000 square feet., 1 ■ Wincl eester Woodworking Corporation ,. a manufacturer of custom millwork; employs 30 people and occupies 56,920 square feet. Probuild, a;manufacturer of wall panels, -roof _and floor trusses; employs over 100 people :and occupies 28;320 square feet. w. 'Creative Urethanes,, a ;manufacturer of castable and reac #ion injecting moldiig and, stamping; employs 30 people, and occupies 30;000 square feet. I i ■ A Prolawn' Service .Corp., a 15- employee Winchester - based landscaping company that occupies 12,150 square,feet. i 13 L j Actions Concrete Supplies; a 15 employee, material. merchant wholesaler, 4 that occupies: 4 000 ➢sgtidre'feet. Wavy Federal Credit `Union, which operates in a-109,300. ;square :foot office structure on'Security, Drive, where t employees 900f; people. - These, area industrial and manufacturing firms employ approximately 3;000 - people and: represent a' ready: mafket „f6r,new retail space.: at Heritage: Commons. There are also five modest sized office buildings along Airport �Road' with a Total of nearly 70;000 squ re ifeetF These.likely have 150± employees:. The paragraphs fo fohow .describe. the developments north; of .Heritage Commons along° Frorit Royal: Pike,and Millwood Pikes east of lhterstate 81•, Included ;in; this area,,are struct- res occupied Eby Fed.Ex; Freight” and W Isom Trucking Corporation, � amon g others. This urea, consists primarily of hotels,. retailers; and offices. There . area. older facilities =but, lin,, , addition to the 3,000+ employees at; the 'industrial' and office buil'd'm s .alon Ail' p 1 p y g g r ort Road, another 1;500+ "em 'Io' ees are; located, :here in the following businesses, 'Cbstco Warehb6`use Tl e Cosfc'Wstore is 1:29;2201 square feet,with 200± employee: D.eleo Plaza is :a.162;630± square fOOf retail center with a ;52,690 +; square foot Gabriel, Brothers; a 29.;000+ square foot Food Lion, a ,24480+ ;square foot Room Store arid., 14;4004-- •,square,f6,ot Body Renew :Hor'izon „Developmenf Shopping-Center h'as;a 34,1,50±. square foot.Big.Lots Store and a 13,440 i square foof-Jo Anne.Fabrics� &Crafts.. , o-. -, Restaurants in''this area includes Cracker .Barrel, IHOP, Texas Steakhouse & Sal'oon,-HibachfGnll & 50preme Buffet, G'61den,Cora1; Blue FoXBilhards Bar�and Grill Waffle-House;Subway and Los T6, Itecos,MeXiC'-anL Restaurant: ➢ Gas'Statibns inI t11is areawinclizde Citgo,, Exxon, Shell and BP. Office The ewest,dffice'developments built in this area were constructed in the Iate4980s and account, for 73;1''00+ square °feet. The offices of 'the Middle, East 'DistricCU:S 1�iArmy Corps of Engineers „has 600 ±°people employO.here: Hotels, Eight hotels consisting of a; total of 808 rooms are located within this +area: Four were: built Outing the 1980s, none were built iri the 1990s and four- were; ,F I 14 built during the 20,00s decade. The newest of these. hotels is the 70 -room, six- story Aloft Winchester; which opened in June,120T0. In summar y approximately 4;500± people are employed near the Heritage ' , Commons property din" the locations 'described above. The larger County employers close to the Heritage Commons site are shown in the niap' below. The purpose of the detailed analysis of I rea employment is for the evaluation, of one sours of demand for ' market support for the retail,space,planned for Heritage Commons. 1 i Several retailers �are located west of Interstate 81 along. S. Pleasant Valley Road -and Millwood Pike,isouth of; Shenandoah University and near the Heritage Commons site. Retailers "in: this area are shown in the aerial below. r 15 I f Names Size Anchors A le Blossom.Corners'- r, '240,'560 Martin's, Offi "ce -Max 'K6hl's;,,Books -A- Million, PP" i Apple Mbssorn M411 440;600 Belk JCPenney, Sears Delco Plaza 162,630 Gabriel Brothers, Food, Lion, Room.Store, Body Renew Free Standing ' , K Mart-jowe s Walmart, Best Buy Valley Marketplae 120,000 Staples. Oollar'T,ree Winchester Commons 173,790 Target, T:J. Maxx, „PetSmart; Home'Depot; Pier'! Imports; Wincliesfer:Sfation 167•,000' hh re Ross; Bed Bath, &eBe orid,,Michael's, OldTTav, _. - - �Source S.,.Patz &„ Associ tes field survey Sfienan'd'oah University The, only university in Winchester= Frederick County °is Shenandoah University, located. approximately 'two, miles north of the Heritage Commons,, site: The; university currently employs 238 full -time and 189 --part time. 16 . it . employees.. or a. total of "427 , employees. Enrollment 'trends are: presented in the table, below and, show as , Fall, 2013 enrollment of 4;003 students, of 'which 53.7 %o are: undergraduate students, and, 46.3,%- are either graduate, or professional sttudents. g i 7 Enrollment, dropped by 173 `in the f all,, ,2013 semester, driven :largely by a, 252- student decl'i'ne, in undergraduate enrollment. Graduate and =professional enrollment ,grew duringthis period. Table:'FAHMeadwdnt Enrollment, Shenandoah University, FAI001—F a11'.2013 Uncle "rraaduate Graduate Professional Total' 2003 • 1415, 1,030 406 2,,85 1 2004 � 1;538' , 1,041 3 040 42'1 , 2005 1',606 968 424° 2' 9$' 2006 1 1,527 '1;175 408 3,110 2007 1 „6-58' 1;295 440 3;393 2008 1;7.20 1,371 420 3 51 °1 20091` 1';•767 1,448 434. 3 619' 2010 7;1*882 1,330 467 3 679 2011 2,290 1,301 �46 1 4,052' 2012 21;402 1,280 494 4,176 201'3 21150' 1,320 533 4,003 ' Chan el 735 290 i27. 1,152 Source:- State, Councilof,` Higher;Education,for'Virgtnia, . i In °terms ;o£' projected :enrollment, Shenandoah University officials anticipate enrollment to 'remain .'essentially flat until at least '2019:, The University's official enrollment projectio .for 2019 "is 3,91,9 students,:slightf below thexurrent- number. 1. Shenandoah U' ruvers.ty currently has 840 on- campus dorm beds for under: graduates, which; are icall full occu • ied, with the remainin non- commtin g h'p Y Y p- g' g = undergraduate and graduate students' residing in off- campu s,. non2imstttutionat supported :housing No. exclusive .graduate housing is provided' at the University. Seven -six � ercertt f all First Year,students mcludin transfer students have lived on- h' P C g >' campus iri:'recent years .,; Shenandoah Un iversity ;has early plans to:- increase their on- campus bed count from 840 'f o a `target &A ,300 ,beds; which woulda. allow the University to increase „ .l 7 '. 'enrollment. New construction in a phased - approach is `planned to, achieve this 'goal. = With the net gairr of beds, several, exisfing "residence halls wiU,he phased,. out while the Hall 'Will be 115bed Parker Residence remodeled f orfirst yeat, students and'red'uced to :95 beds. L p, p ' _ , , the university, the existing '840' beds could increase Dit0, to lanned ex ars on at to "95.0, beds by 2017, 1-;19,0' beds .by' 2022: and 1",31'0 bed's by 2027. This expar►s on plan could 'be 'speculative; but, will clearly be set in place, well after Heritage„ Commons is started., ,and, ithe addition: 'of .on- campus beds will be :modest in fhe early stages of expansiori:, Data.' - ndicafes that .Ahouf 3,400± university _students currently live off- •campus, primarily m p'r irate apartment's with some: students living at�their jfamily home. - � Data " indicates th' at about' 3,400± university students currently live off - campus; ,p n`m aril m r irate a p.artmer is with some .s tuden ts living, °their family ome. Even ' p pan sion of on campus beds to 1,300 ±, there will. be at. least 3;000± with the Tanned ex - studbr.i ving off =camp . g ar y increases .iri enrollrineiit -. The ;presence `of' us; not, ineludin these students = creates a strong- marketior apartments at nearly- locations: 4 Summary: 'The above ;analysis has a three -fold purpose First and `foremost;is 'to id entify'the: site location and „determine whether the setting is marketableF.for'the types of land uses proposed_, The site has, excellent highway access,; proximity to employment- centers and con inertial- facilities and no' nearby blighting land uses.. 'It: is an. ideal location,for?studentssaiid" staff" from5henand'oah University:_ h Y - , 5econd;;Herita e g C omro n i 0have 100;000± square _feet of retail space at build' out: The; 4500' em lo; ees working' in the, ,irnmedia.te area,: ,along ,Airport Road and p- ;4y _ Millwood `',Avenue, andf "2,500± new - employe � - space,-to _ be built on es in office ,and- retail - �� 'site; represent a ready �riaarket fovnew retail tenants: l The third issue ` 1 Js to establi'sl ,that, along. with the new Couri'ty office building that competitive is planned for the; site, this location will be tom etitive for. new. :office space n development. The data presented above ,shows that between office apace and flex ti P ( P i industrials ace, the Route 522- Air port, Road corridor, have'.an abundance of office Viand flexespace; albeit primarily mature,space. Heritage .Commons De�el'oprrient Plan, n The proposed.'Generalized Development: Plan (GDP for = Heritage Commons °is p _ rated below. It shows four commercial land; bays with a total'of' 44t acres. 'These j rese are'located .on the north@ "side of; the ro er,' " Two have fronta e along: Ront Royal Pike F P P ty'. g . and 'two':have "fronfage 'on. the: new ;,bridge that is planned for a I 81 ;crossing; The, new 1350,000 "square foot .County Administration "Building could be ,located' ,iii Land Bay IV at the corner'.of Freedom Plaza and. Front Royal. Drive.. `Some changes ,may be made on landquse locations butt lie proposed=level of de�elopmenf��is set . The County Administration Building, is proposed to. relocate to .Heritage Commons., The _relocation is ,riot finalized. However, our research: showed a likelihood r fof the "relocation; and ,d jremendous economic benefit' to lie 'Count ith.`the building y w .- . relocation as an '`ancliof ' tenant for ,Heritage Commons. Thus;, our :analysis 'is based on the:new County Adm-inistration,,Building`being on site. The, alternative is. an expanded amount 4'retail "_space. The.-residential, crea consists ,of tivo ,large -and one small, landbaysT with about 9.4 acres. These land, bays''are"desgnated "for apartmen ' tent development and townlome_ - G ,development ; <as shown�on Page 3, above. - The;;GDP has 1=2,35.;acres set °,aside, for open space: s, part, of an;anternal site trail Y p a _is stem. The o en_s P ace I area.: includes the =;aftractive Buffalo Lick Ruri Strearn Valley:,, There are`'23 42.acres of :road network planned within the ,1507acre" property;. including the: traffic ,circle ';that connects `Freedom J?kkza Boulevard, Warriou Drive .and Center ' Bouleyard., i , 19 i 7 ' '; lncorpo�ated herein by reference - , ' { i �e �x ,4 i`, •""` 'tea '�`" �` 15 � IV a y r Y E'' 1 rJl.ms FS� �"�'�r � T � � 5/ 'X ���? dG�1 ✓ � � W 7��$ r'ia T^ri'�:'. Z Nj !,'L ,.�"G,,� y i ��: ! Thee GDP is pr1epared in a general 'format at: this time as the site requires', rezoning with Frederick, County staff put the plan. A: more: detailed development an will 612' ; prepared ;as the;.plaruling process progresses. However.,':at this time, 1,050' market rate; upscale apartment units are planned and 'these will.likely be built -in several phases of150 units per{phase.; `This, of,course, can change based. on�mar`ket'trend& but a phased development Isjl kely. The, to wnlomes are, to be priced at ,approximately $240,000;; .when reported :. in i nconstant'2014 4ollars This p'i c'e,iexcludes .any "add-ons" to the base pr ee:> These l omeSL will also be built in phases, with an expectation of 30±., home sales per', year, with the development pace dependent on, the "expected sales pace, { -20 �. I _ ._ _ -, ,; i. k p uMrfess- with�.County government ;staff: This building is planned . for com agues! that do b f, to be built.at the ame -hme frame as the County office,bulding 'i A 'These two buildings'will account for 220,000.squ4ro feet of.'the proposed i600,000 square foot office, space. The remaining 380,000 square "feet will be built 'over the following 15+ years, at, 'a.likelyrate. of 25;000 square feet •per',y"ear on average, based on, inarket-trernds,:as presented in the paragraphs which follow;., Heritage Commons will also. have 100,000 ± square feet of eretail space At this time; the. Heritage Commoris�,sponsor has :verbal conimitments;for at least 30,000 square feet,, including: A convenience center ➢ Two restaurants: ➢ .- .Bank � - Child da" - are,cen`ter This "total'. is likely to ,be expanded #o at least 50;000 square` feet . by project opening. Retail/ Commerciat space includes: a wide :range of uses for both residential ,consumers and =area businesses,. I Thus, at project opening; Heritage Commons is likely'to.have'; ° 150 ±"apartment units av );O_ ailable for lease 30 ±; townhomesl6r,sale ;➢ 220;000+ square,feet,ofAfice space:built 50,000 square feet of "retail °space within, a small, center, on pad' sites or as ground -floor space within office buildings a The remaining, portions. of th`e development will' be built, over time; `as.described in; the: market- arWvsis,for eacl land-use, East T,evis Stree�t%Freedom Plaza Bridge: 'In addition to the new County office building oriarte; Winchester City officials and :Frederick County officials have approved the construction' of—the East Tevs Street extension through the Gl'aize Property in 22 ,h iE HgCmproey v , new `brdg over- and on 'to thee o as shown in the. a 'erial jfo follow. 'The, road alignment `through the, Heritage; Commons property is; also noted'. -1t,is;•planned that the road 'way <improvements will be started in early_ 2015 and :be completed in;mid 2016. The' "Glaize Property ,is, a proposed, commercial site that will likely be developed ` wi'th .new :retail space in° time. The original site proposal °for- the'Gla ze Property Was,,a project::named,'The Shoppes,atTevis but this' s,.no' longer -active The connection of the bridge to East Tevis Street'a`t Legge :Boulevard. provides a direct connection to the Apple Blossom Mall area and? the adjacent retail centers, ,along', Legge; Boulevard 'and Pl`easart Valley Road. The bridge connection at, Freedom Plaza Boulevard, through Heritage 'Commons extends to the ,primary site entrance at Front Royal Pike., Center Boulevard is another- major arterial ihrough. Heritage Commons and 'could be, extended past the site to, Front.Royal Pike near: _Patsy Cline Boulevard as part; of .'this project;, butthat section is not part,of the bridge, h-ding _ I Thi's will be a major, roadway improvement for the 'Herita'ge Commons- site�and is likely to be,g "reatly used:in,time due to the planned replacement of the 1 -81 bridge atExit 313' at the Route 50/522' _interchange; as the current bridge requires 'replacement: This construction project -could take.10 °years before construction begins:, 23 a. } f Section I MarkeYAnalyss This section of the report is a, summary market :analysis in support. of 'the four land, uses proposed for:HeritageCommons,:includng apartmenf uriit:development,.for- saletownhome a'les,,o ff ce' space_ and; - retail space. The analysis of each land` use.,follows; a demographic and econ" inic analysis of ".the; market ,area lof Winchester and Frederick f' ;Demographic .Analysis' The, Census total. population, 'count for '2010 for the: two `jurisdictions of the: market area is ,a combi -ied 101510. The 2010 market area census' is nearly 22,000: above 4 'the 2000 count; which', is- an average net population' :growth of 2;000 'per" year. The a 0 •ty , othe markmon et,area, p o most of tle"growfih -over, the past 30 ±years,. p Y. _ ,:4 - has been .in. ther:Coun The• most °recent (2013) population estimate for the two= county' market area,is 108;540; or 4,000 above the `2010 census count. _ 24 �I { - i • r 1 f i I The population;forecast of 118;800 by,'2018 is based on a'1'ower growth ratedit the', maiket.area' compared, with, the 2000 decade: The; growth; dui "ing; the,.2010 to 2013 period has been slower due to ;the, past recession and the effects of expected :'continued modest rowth in the new home sales market This trend' is reflected in "the American •ty y ( IS) by_;the Census; which:shows a 2012'population of 107;200 'and Commuru Surve AC population, &:201'0, o ulation, of 108;540;. However, jobs and employment: are now increasing and therF -BI, iparticular , ° •i. s expected to bring in 1,200,employees to the market by `2016.. n' White that is not,a "hard' and fast" date, many of the new employee's_ are likely, to Tr ove to the market areaby 2018. year protection period -,,.as ,that is likelythe,,maximum period for a 11 1. ,, used a fo . — , comfort leveIUh f6recastiiig. for real. estate development Thel first phase of development At Heritage Commons •wall occur during thi's period. Thus, 1fof housing, in particular;, current trends are used for the' post -2018 time frame: Additionally, the' „comparison between at- place jobs and employment is; in terms Of out-commutin '. The Higher gas •prices area deterrent for market area workers to commutelo Nortt e "rn Vir;ginia , All` of these factors were taken. into account for our forecast population of 118,800, by 2018.. I' , 25' •T rotect�ons °of Poaula'tion:and:Households by, Table :1: Trends and P Tenure and Income, tieritaeeCommons, VA1Vlarket`Area 1990- 2018.(Constant 2013'Dollars). 1 -990 2000, 2010 .2018 Market•AreaPopulation 67,670 82,790 104,5'10 118;800 Wmc_hester City - 21,950 23,590 26 200 -.- Erecter" ck County ” 45,720 59;21'0 78310 Group�Quarters',Pbpulation 1,220• 1,570' 1,940 2;1.00' Hquse601d Population; °: 66,450 81;220 102,570 1:16,700 Persons Per Household ° If 160 2.53- 2:60 2.53 ''Households „ 25,550'. 32,100 39,430 ,4'6;130 Percent Renters, . 32:9% 30.5% � 30.2% R'entei Households - 8;500 9,780 11,940 1 4,160 Renters' Withm•Ineome1Catego ry•1/ 41220 4;530 5,140 _ 6;070' Percent: Within Income Category' 1 P 49.6% 46:.4% 411:%, 42.9% 25' ith a.ng',$40,006., Note 1/ Renter hodse7ho']& ,W -incomes excee i Source;; 1'.90.0i 20 QQA d M0_U,&'Depabeht of C and S. Patz4tfd Assdeiates_lric. Half of themaAet areas Girpup. Quarters population, consists of' students in on- campus d6rm!k At Shena-Mciah University. The 'other oail of the Group Quarters pppulaibmis persons "in 'h ospi a 1 s - assisted wing facilities nd ins fifulions The growth in Grou pl,Quarters ,sho,wn..in`.T'd-b'le I is based on the new ,dorm, rooms expected to be bu I andbafi briiveirsity, by '2018,, The subtraction-of Group Quarters population from. totalpop4l'atioh is `Household' Population, which _are the, hasisJor the, projection new housing unit demand.. Household Trends. ieiids-. in 261'0j. the market area had '39z 470, hougohbU b sed �onth e US 4 :census count. This 'totM is 7400± more, than -iii 2010. A , key point. in the; growth of -households is that the„ average household 'size increas6d'iconsid0rably during the 2060 d6cade frofti. 2:53 `to 2—.69in 2010.,, This is the result of p"ersons, doubling. up .during the recession due, t osses'AM tor.-�dlar salary - "deductions .1pis �alsa the iesult. of persons not 9 job W -Y forming their, ownhbukhold due., to the overall ec-diidm. U. The - increase in the average .- hous6hol,-d ;size: ineant U owth, in _2010, was Mbw.lhe level normally created by populatio.ngrowft, For 2018,:.a reversal, Of 4fie increase, in the average h- h Md is expected to Ouse- _o I size decrease to. 2.53;. 'the same, rlate , as in 20QO, At this rate, 'househol& are expected to i'ncrease;to.46i'-130,by,201,8,,a,, net growth -ofl;r-feat,lv 6,700. households:, Reriter . Hotiseh4dsi. In 2010- the census coUnt,shoWed that - 30.2 percent Of all. Ad 1 , n cludeShefiandoah -MORdt area 'households we're. �renters., That: percenta ge wou sfb&?nfs W t University _,hqjive off campus. The percentage of renters in the area declined over the -past 26+ years., k has continuously been below, the :state and= national averages,, However, oh,'the -data to be presented; below On new apartment unit addifioftstoIfierark et !a "r�asince201 0,�andfor-the,-pogt-2013'p6riOd,aslightiic iea e, i h 26 = the percentage of renters isi expected•. :The' market ,Atoa is projected .td'have X6 •percent renter households by.2018, or 14;110 renters. Higher = Income Renter 'House'hol'ds: We used, $40;000 as the minimum household income for renters who-;can afford the xents.at.new apartment developments: Those rents are „approximately $950 " "to $1;000 net for a new one - bedroom unit and,;$1,100 r to $4' 50 net for a, two -liedro - m with two full baths. At 3¢.% of income allocated to net . rent, a. household with ;, n• income of. $4000; can afford: a net rent of approximately $1,000 That is c-urrently,°the ,.market for new apartment units., The, 2010. Census' did not provide income d_ ata. The ACS data.are not;fully usable related to household-income calculation, as they are, not consistent with past biannual census counts. Thus;, the 2010 estimate for renters with incomes of $40,000; when incomes,are reported iii-1013'. dollars, `is based on a calculation of `trend data from-the 1990 and'2000 census by the staff of"SPA: i i Our estimates show ,that the: market area has 5,100+ renters in jhe' income category under study in •2010 and that total is expected' to expand to 6,070 renters by 2018: The percentage of higher •mcome renters is likely to continue to decline; due to the expected increase inlhe for- sale;home market, but -the absolute totals are expanding. Overall, tthere :has been steady demographic ,growth in the market .area and that } trend should corihnue , Tlie_re; has been a sizable growth, in `renters during the 2000 decade, with approximately, ;30 percent of net household growth renter households: These data show�a continued need .for ',now r„ental'housing. Jh the paragraphss`below; the rental household, data `and trends will be compared with.. past apartment ,unit development acid actie2 proposals to calculate net: apartment unit, .demand over the forecast ,period. Owner Households A`s� of 2010, the market ;area had 15,000 +_ ownerthouselolds with iricomes, reported,; in constant 2013 dollars, of •$75,000 and 'above. That is the 27 income: ,range identified as the target, rnarket for new home sales ih `the market area; including the type of ,for sale ;housing proposed. ,a_ t Heritage, Commons. B.y 2018, the 'number of home owners with, incomes of $75;000 ;and above is 'expected to increase by 3;500'. Base, Economic'Trends4- At -place jobs in.the.market area,increased in,'2010, ;2011, 2012 .and '2013, after a decline in 2009 during the recession: The 2013 data, not yet published,, are likely to show the, market area's, at- place: jobs are at ,or above the peak year of 2008 and are likely to continue to expand' with.an imp ing,nafion y: al econom This trend is also true: 'for ,eniployinent; which .differs from ;`at- place. jobs and. I refers to the number of. ,market area resident's who are employed. Market area employment is increasing'and,ungimployment is decreasing:. 'There are a few large4 developments m. the market area 'that, are; expected to ;generate j net population, employment and job'growth, including: r ➢ Navy Federal Credit Union vompl'eted construction oft a .56,OOQ square foot Building II of its existing Fieder =ick ,County campus on Security Drive: in August, I 2013; where 450 people' will Abe hired by 20181, Since locating to ,the County in 2006; Navy Federal has, grown, from 60 to more than 1,000 employees. Most dthe new jobs are customer support;po "s t' ns with salaries above $40;000,.. ;Dormeo :Octaspring, a mattress manufacturer, opened its 2nd. U'S., facility +at,:259 Brooke, Road` -in the Fort, Collier Industrial `Park. Twenty people are now, ernployed' at thes38,000 square foot facility. The? plant allows. the - company, part of London -based Studio .Moder_na Group, to- produce its foam coils in the United 5tates for. the, first time. ;Barrett, Machine, ;a metal. fabrication; company, announced in March; 2014 `that :it would expandts Fred'erickCbuntyfacility,and lire 27new °employees.. 'M,&- H Plastics,:a ,manufacturer of plastic.. bottlesi and containers, announced in July, 2014 that twould add 45 °new jobs. Evolve- , a'manufacturer of natural themed, play environments,,annoiunce l i, IGlArch,, 261A that ft -would hireb46 people at its '1'5 ,'000 square foot.facility in the; Stonewall Industrial Park. Operations in the new4actory began in May, 2013. 28 5 'Creative Urethanes manufacturer of,castable and reaction.injecting.molding'.and stamping, announced in February, '2014 thatjt -would ;expand its Winchester operati on,ai W6qVieW, Business Centre by addf 54 new employees. White House .Foods, an, apple products _processing company, announced in March,, 2014.that,it would expand in'Winchesfer by adding 31 new jobs. T"oe's Steakhotise, opened a, new' 11;000 square• foot restaurant in Winchester in June, 2014'w.here' t employs' abput 150 people: Henkel= H "arris ;Co , 'a, Household furniture manufacturer, anriouilced in April; 2014 -that it would,hire`18 new,employees at its Winchester location:. 'HP Hood operates a ,375,08 0±. square foot milk. plant °at "160.Hood. Way where it. etnploys,:over'420 people: The - company announced in;;May, 2013 'that it would: expand' thel facility to increase ultra -high te- mperature production capacity,: creating 75 new jobs!; The Winchester, plant first opened in 2001 with 170 employees and has 'been steadily growing since then. The 75�additional,jobs will. -:. bring its total employment up to 500 workers: The majority oFthese'new jobs will be operating positions from within the .plant and will be permanent hourly positions: .Pactiy Corporati'on,. a manufacturer of corrugated containers, announced, 'in November, 2013 that it .,would'hire 25 new employees. Amherst Medical.. Office, Building. Construction on ;this, three story Class B .office buildin ,`be an in' early =2013 and wascompleted•:in mid' =2014: `This 57;695 g gran sq, uare: foot'building: is; fully'occupied with medical office tenants:, McKesson Cor;p., a health care :services and 'information technology company,, completed a new dis6ibuti6h, center in 2013 that, employs 200. People. The company distributes medical arfd surgical jsupples to physician offices, surgery centers; long -term car' facilities,and home care businesses A The Shenandoah,Valley,DiscovM, L,Museum opened ihi.d new 20;000,square foot focatromm* ,mid, 2014 at.19. W. Cork 'Street. ➢ , Chuck E. Cheeses opened ,a knew location _in, August, 2013 in Winchester where, it employs'50 people. The'. FBI, is currently :plannn`g on 'building a 256,430± square foot facility ;in Frederick Courit' called tl e' ,Records Management F,acilityf. `The facility" will consolidate FBI's ;paper, - records and also provides• storage for° National, Arcllues. =.. and, Records Administrations`(NARA) compliant- records in an` environmentally conditioned, fire -,protected space. The proposed facility will :include a „'record - management:building;This facility was anticipated to 'open in'2016".and employ ' - ...': a as many as 1,200 people, but •'the ,,timeline, has: been delayed._ `Construction could. -The, Village at,::Orchard Ridge. Plans are ongoing-,for the second phase of The Village at Orchard ,Ridge; a "continuing care: retirement community. .The community is currently in pre- sales.for its Phase,Il;exparisiori, 'hichwill include: additional' 80: indeperident :Jiving 'apartments� and 18 cottages; ,a_ 15;000 square foot; wellness, center with an;indoor swimming pool,'the 'ex'pansion of the dining areas and an expansion, of ;10 suites, to the, skilled: nursing; neighborhood of Orchard Woods; Health Center., Construction on the cottages' ;began in April, 20.14, with; an ezpected''completion date of sprm"- g20T,5,,.Cohstructioiv on all other buildings' will commence in late-2014, and should be- compl'eted- by the end ,of 2016. Winchester 'Marketplace: 'This 50,000 ,square foot retail; center, to be located, ,at ' 1`523 S. PleasantValley'Road;.`is currently under, cor►str,uction;lfi is located across South Pleasant Valley R'oad_froni Sheetz and beside, Kmart. The property would include a, 3350 'squarer 'foot_ `Roy Rogers ;re'staur'ant; ,Cp' to 180'.permanenf jobs t r. The site plan.�includes ,a 5,700 square could be' created s'at tlie, new ;retail 'eente foot commercial pad site, aocated. behind the existing u Lube: Two more g. J iffy buildings -;are included, in, the site plans:. an L- shaped ,builIding with wings measuring 21;000 and .12;000 square feet and another building measuring 8;141 I square.feet, i ➢° Several small d'eve'lopments are in planning within `the' `Frederick County, . primarily in and around the industrial parks. 'These include :a planned .75,000 square foot building expansion by Greenbay sPackaging; at, 2$5 "Park Center Drive and;:a29000 square foof warehouse expansion'at`774 Smithfield Avenue. ln'total,, these new companies and local,expansions� will radd approximately 2,600 new full-time employment, in addition. to new construction jobs. These totals' will increase on an annual basis. = There =`have. been''four major job loss announcements.An Winchester = Fredrick; County since 2013i,that accounted, for'the; loss of 240± lobs': These are detailed.;below. Rubbermaid announced ih�December, 2013 that-it would move'the headquarters of its Rubbermaid 'Commercial Products, division, from Winchester to " Huritersu_lle, N:C The.moue'will"relocate 65-jobs in=arketing f nance,,plari�ing„ and research and; development; butwill not affeaAhe 750 `employees involved in, the factory, wa= re_housi'ng ;operations and distribution center. 30 ced o-January; 2614Ahat it, cu03. pbsitionsl as part of 'the se4o na honal changes, lri" healih- care. In addition to :those �yees within the system experienced ,a, rediction'in,.hours were eliminated. sty em's, a security, serv.'ee prodder; ,announced in IVlay. :ice itsi Winchestei employment.base by 55 people by July; i Apartment Market-Analysis;, Following is a summary market analysis for new apartment: unit development in, the market area. For this anal ysisi we studied' the market for 1'50 =200 new units for initial project :development, at Beritage .Commons. The study is 'for a. new mod'erri apartment complex with Ton ly one- and two - bedroom units., The forecast date for unit delivery, is 2016/17. Curretit�rriarke-t area net re"ri& -(2014 dollars):for, new attractive units at- an arnerutized apartment - complex are. $950 to $1,000 for a ,.one= bedroom and.'$1,100+ net:for a two - bedroom with two full'baths. `We',also assume an apartrnent<complex with I axompetitive :mix of on -site amenities. p - Pp y Within these= ar "ameters;.market su or <t.is, anal .zed for renter -households with I incomes of $40;060 „and above,, A ;$950: net rent will require .;an, income of $38,000' and t ., ` above, based on 2014. dollars, Thus, to be somewhat conservafive,; we used ;$40,000 as' the minimum household income for= the target.market The market area demographic, analysis was presented in Table 1: The ;key' demo ra licY factor under study .for, new apartment unit development is the magnitude g p - . and -growth of renters' with ,incomes'of $40,000 and above., Our ;analysis shows ;that, tfie market area had., approximately 5,100 renter households with.incomes, of $40'000± :in. 2010 � at , the, ;time: of the Census,counf. By 2018, this total is expected `to increase to about` 6100, oral growth of 900+ .renters for the :2010 to •201`8 period, or 1'60+ households. per' year. oniave'rage,., 31 Cqiii&6fj'vg AlWititgnt, MArk6t. The fbIldwing,tab - le shows hows a. list of existing rental housing units, That, would 'be competitive, or,somewhat competitive, with new units at llefitage� Comrnbn'-s, once bil ilt., While mosuffeftketp'lace p throughout Virginia, have had an abundance of ft&w, apartment unit develdpnent 'since the recession, thi s is zot. tM case in the Winchester area., The two newem, apArtmortl volopmeftts Were bu i It ii i,2005. 2005. There .has been a considerable nttnibior df'-,adapilyp'. reuse buildiw'op.ened: for .,Apartment units in downtown. Winchester; but, overall,, the:'Wiiichester area apiEkrtment market., is° modest with only a few upscale prolperfies., S,unimerfie'ld'arid Stuiart 14111, are the two newer and better apartment properties in theLmarket area. In stud ing,,ihe 1inchester areaaparfment:market,only 40± percent. 'of, the units in defined apartmerit' I There are, identified, better r6fttaf uni corrippeNes. condos for,, rent; -a sizable number of idw- Ins for:, "refit , by professional real. estate companies, and currently 8b±,* recitals -- in:acdAptive,xeus0 buildings, in bld.Town. This list does not-include xentals by.individual 'owners --ye found very few available units: on "Craig"s. List - and does not include: sin&-familyrenials;. 86nfe of the, units! -are, rented by, university, students,, but; that, is�., a small total: Of the, Occupancy shown. in Table 2,. !here are, five; .key points *shown by the, data in, Table t2. in regard 'to. the ma,gnitude,and quality,,,of the'Winchester apartment market: 1.,� 16t, a, I.haik.e.tPlAc`e with 5400+ 'renters (in 22013/14) with incomes of $40;000 +,;,tlie total competitive A iffoiiiftt;isrrtod'6§t,rydtj;'360+j apartment unit - particularly Vi'ven the ;fact that many of the a fi-n ts� listed in ­1 Table 2 below the rents propose for new apdrtrifent,, unit. Aevelqprrient,,and willnot:compete,'for�th-e,$40,000+ income'rente,T; Z. The vacancy t deiitiffed higher rent properties; y-ra rate zero, for the i 4 r i I V t i i • 3. Most of the. new apartment units being; placed oin the market at thisr time are one - bedroom units in upper floors of renovated. Old Town buildings; (except.for the: units recently opened at Cedar Hill asnoted below); 4. Nearly 60 percent of the apartment units that•are listed in Table 2 were built prior to 2000; and 5 Tasker Village,. with„ 64 units, is the only market rent newer apartment complex ,in Frederick County. Many of the other rental units in the County are at. towns'; and condos.for rent. Table 2 Characteristics of'Coniuetitive Apartment Complexes and Other Higher End Rentals, Heritage Commons Market Area;.Auaust, 2014 Date Total Built Units Apartment Completes Summerfield 2005 64 Treetops 1995, 52 Stua&Hil l 2003 1'80 Tasker Village 2005 64 Pemberton 1998' 120 Peppertree 198749 194 (Subtotal) (672) Other :Rentalsa/ Lakeside Condo Mid- 2000's 50 Tevis.St. Apartments 1997 20 Fox Court 2002/03 25 Windstone TH's 2003 75 Limestone TH's Mid 2000.'s 20 Old Town'Rentals 2006/13 45 Saunders' Construction Rentals NA 120 Oakcrest Realtors NA 130 Hables Real Estate NA 27.0 (Subtotal) (695) Total -.2/ 1,3592/ 33 Notes° 7 /'Total's`include;rentaNsthat ar"emanaged`by these companies. 2/ Excludes the recently built Cedar'Hill:Apartments. Source: Field And telephone survey by & Paz & Associates, Inc. Pipeline Proposals. At this time, there are two active proposals for new apartment unit development in the-,Market area. 1. Jubal'Square is a'140 =unit apartment proposal that has been approved by `City officials for rezoning. Jubal Square is'expected to attract Shenandoah `Uni'vers'ity students for �at'least 40 of the 140 planned units. This, proposal will likely be ready for occupancy by sometime in 2016/17. The expected start date is late -2014 or early - 2015. The proposal includes .28 three- bedroom, units and 20 two- bedroom units with dens. The remainder are one- and two-.bedroom units. 2. Old town. Properties. City officials have approved the addition of 120 apartment units in adaptive reuse: buildings in Old Town. These will open for lease -up over the next year or. two. 3. Cedar-:'Hill is a 'new construction 48 7unit apartment building that was opened in 12 -unit- phases. The first building opened in mid -2013. The second `building was available for occupancy by the 'end of'2013,. Both of these, Buildings are fully occupied. The last two buildings are still under construction, _with one planned for completion. in. November, 2014 and the lastexpected'to open in early -2015. This i&a:non- amenitized property and likely an;aftractive property for university students given its location. The units are two- and three - bedroom. These pipeline proposals are summarized in °the chart to follow with an adjustment for apartment units expected to have some units occupied by Shenandoah University students, °These active pipeline proposals are all in the City: These data show, if Jubal, Square is built as planned, the number of new competitive. market area apartment units for families will be `increased by 250 units. Twenty-four of` the units at Cedar Hill'. are -occupied and no longer pipeline. Number of-Planned Apartment 'Units (2013- 20.18) Jubal square 10011 Cedar Hill '30 1/ Old Town. Properties 120 34 Total: '250 `(rounded) Note: l% Adjusted.to exclude college student Occupancy. Within the County; there are. two active development'-proposals with apartment units as plan components. One is Heritage Commons. The other. is Madison. Village, which -is located adjacent to the south side of Heritage Commons. Madison Village-.is planned for 640 housing units; Of which 480 units will be apartment units. It" too will likely be. built in phases. Conclusions: Our, demand' analysis shows market. support for 800 ±' :new' apartment units in the market area for the 2010 to 2018 period, excluding units to be occupied by area college students.. This projection could be conservative, given the large number, of rental units in investor= owned, units and the- recent increase and success of new apartment complexes. The chart on the above: page shows that 250± units are likely to be built in the near `future; with the 48' unit Cedar Hill Apartment currently under construction with the last two buildings and continued: addition of new units in the downtown with 120± units planned in adaptive reuse 'buildings in Old Town Winchester. Jubal Square' is •the only planned amenitized .apartment: property. The net demand for new units by 2018 is 550 units. i I Juba] Square will be an attractive apartment property, but will have a large percentage of large two's and. three's. In time, a large percentage of these apartment units may be, occupied by college students. The photo below shows- the type of apartment units to be built at Jubal Square. Prototype.for Jubal Square Cedar Hill' is a small, non- amenitized apartment complex with a mix of two's and three's. These. units should be fully',occupied by mid' = 2015 : Cedar Hill Completed Building Building,Under Construction. The adaptive reuse. apartment units in downtown Winchester are attractive, but serve a small, select,segment of the- rental housing market. 1 36 Overall, the existing apartment" market inthe greater Winchester area is modest. The pipeline units will not change - #hat: condition. 'The Winchester area has an' abundance of� mature townhomes° for rent; due to an ,uriderserved rental apartment market. The sponsor of Madison Village has not yet submitted a site plan for.review by County staff. This, may not happen until mid -Fall, at the earliest. The project engineer .reports 'that the initial part of the, development will be. for towns, riot apartment unit development. This is opposite the development concept for Heritage Commons. Apartment unit .development'•.:at. Madison Village is likely to start by late-2016 at the earliesf. The number of units to be built in the first phase is not -now known. Thus, the likely - magnitude of new units to be `built during the 2014 -2018 period is 250 ±, excluding units 'designated to. students 'at Shenandoah 'University-. This totat is well' below the projected demand- of 860± units.. Under these ezpected'market trends, sufficient demand exists, for new apartment, unit,development at Heritage Commons for delivery during the 2016 to 2018 period. Townhomes' Heritage Commons will 'al'so have 150 fownhomes that will; be priced in the $240,000, range, as an average, with upgrades to the: base price, and .reported in constant 2014 dollars.. The chart rbelow shows 'that there are five active; townho ne subdivisions in the market area at this time-Excluded is Orchard Hill, which closed` -out- in early -2013 and Brookland, Manor; .which closed out in .:2012. The Towns at. Tasker opened in May; 2014._ The average- base sales price .for these homes is $244,000. `These prices are in the same price range planned ior'Heritage Commons. "Table: Active Townhome Communities, Winchester- Frederick Countv,.August,1014 Year Approved Built started Lots Lots Autumn Glen 1999. 211 199 37 2014 AverageSales', _ Prices $290,670 f 1. Fieldstone 2004 225 69 $246;600 Snowden. Bridge 20017 104 9,0_ $222,890 Sovereign. Village, 2013 62 4.- $244;900 Towns at Tasker- 5714 81 1 $207;000' $238,000 Total/Average;. 683 363 $244,000 Source: Frederick- County Department. of Planning and Development There are :only 300± lots,available at these townhouse subdivisions> at thin time. Except for. Sovereign Village and The Towns at Tasker, the other subdivisions were started prior to the recession and are large in terms of units planned. Construction is ongoing on the first phase of 16 homes at The Townes at Tasker, developed by Dan Ryari .Builders: and. located near the intersection of`Tasker Road and Rutherford Lane between. Winchester and. Stephens City along Schramm Loop. This community will have 81. units at built. out. The. second phase Will include 15 units, the third will include 18 units and - the: final phase will' include 32 units. Towns at Tasker The two newest- townhome subdivisions are modest in terms- of the, number of units'planhed. Clearly, fhe-affects of 1he recession are'still an issue with new home sales, but Sovereign Village opened in 2013 and The Townes at Tasker opened in, -2014: New towns-are likely to open in Madison Village in 2015 or 2016. R: I i i i i E 4 i A smaller townhome community is proposed in, Winchester City called 1570 Commerce Street. Commerce _ Street Apartments will consist of 26 three - bedroom townhome units ranging in size between 1;800 and 2,200 square feet. The developer is targeting households earning $60,000 per year. Occupancy could begin as soon as 2015: Following are photos of townhomes at the other ;four active subdivisions. Autumn Glen is not included; as it -is marketed as age- restricted housing. The sales pace for new townhome sales in the market area was I0± in 2011; 50t in 2012, 601 in 2013 and' ,approximately 20± to date in 2014. If current trends continue, the 2014; total will be near or, slightly below the 2013; figure, when reported on an annualized basis. 2012 and 2013 represent start -up years for new home sales after- the recent recession. None ofLLthe 'four townhomes built at Sovereign Village have sold yet. 39 These data show market support- for new towns of Heritage Commons in time and the proposed - price, range for °towns at Heritage Commons. New townhome sales are not likely atl-leritage Commons during the first one or two phases of development. However, there has been an increase in new home development and this is expected; to continue. 0ffice_Sgace Heritage Commons, is „planned for 600,000 square feet of office ;space. That total includes the proposed 1 50,000 square foot County office building and a 70,000 square foot building planned for development by the sponsor of Heritage Commons as new space for businesses that need close proximity to County government offices. The County office building will likely not. open before 2016. The sponsors planned_ building will likely open at°the.same time. In addition to the-220,000 square feet of office space in these two buildings, Heritage Commons will have land and approved master plan for '380,000 square feet of'additional'space. Excluding some of the older office buildings in the historic downtown of Winchester, and elsewhere in the region, and the buildings occupied by City agencies, the market area has approximafel'y 1.4 million square feet of newer office space, with "newer defined as space built since 1988: This total also excludes the existing 65,300 i square,foot County office building. The following paragraphs summarize the findings of our. research on the market area office space: Of the 1.4 ±million square feet of office space in the market area, 457,700± square.Ifeet (33f %) is medical office space. These buildings are clustered near the hospital on Amherst Street and along Jubal Early Drive. Both are locations,iri,the, City of 'Winchester. The Heritage Commons site, is not likely to be a competitive location for medical office space. .M ➢ The only recent 'office construction is the Amherst. Medical Office Buildiiig,,.which was completed in mid -2014 with •57,695 square) feet of office space. The building includes 8 condo suites that have all sold as condominium sales. Most of the suites' were sold to,medical tenants. ➢ The medical office..space isat a near 100% occupancy rate. ➢ Excluding the; large government buildings, such as •FEMA.and USACE, the market area has 650;000± square feet of newer space: `These are building biaildings'of mostly 10,000 to 50,000 square feet. ➢ For the 2000 to 2009 period, 12 non - medial related, general purpose office buildings were built with a total of '280,000 square' 'fee't: For the 2000 decade, the average annual building pace for general purpose office space: was 281000 square feet per year'. This space has a. 10± percent vacancy i rate. ➢ The 501 =519 Jubal` Early Drive building with :39,500 square feet is the newest non - medical office building in the market area. The building -was started during the recession -and completed' in.2012. It was purchased by a tenant who will occupy the majority of the building. ➢ The office, space 'market in the market area "stopped" during the post- 2008 recession period. ➢ Along- Airport Road are „several "flex” office,buildings with a mix of office j and industrial space. 'These buildings include 120,000 square feet of space, plus-the 110,000 square foot Navy Federal Credit Union. i Overall, the general !purpose. office space market' is. somewhat stagnant with only the 39,000± square foot; building= on Jubal Early Drive built since 200.9.. The vacancy rate is-high. However, there,are three positive issues to reemphasize: J. .The Federal Government- is increasing its "'presence' in the area and expanding the amount of office space thaf it. requires In 2012, FEMA opened a 111,000 square foot building for '570'en ployees °2. Over- half of the .general office, space in the market area is mature; and 3., The County'. .'s mature market area flex space: represents an. expansion market for new office space: The Heritage Commons site is well located for office space development, particularly. with the new County office building on site. Thus, "Heritage Commons will 41 likely be competitive for; new office space. after the new County office building is open, At. best, Heritage Commons will likely attract 25,000 square 4ee.f of office space per year, with expected additional County space and possibly :a large federal,-government space. This pace of development would require 15± year for full build out of the "available" sites for 380,000 square, feet:of office,space over and above the 220,000 committed square feet. Retail- Space Heritage Commons will have approximately 100,000 square feet of retail /commercial space. This 'will 'be primarily restaurant space, personnel service, t space and non - retail space such as ,banks, ,child day care center-; business service space;, coffee shops; computer store, etc. Only half of the space is expected to be classified as retail space for resident expenditure potential. As shown above, the sponsor already has discussionsµ with businesses that would occupy 30,000 square .feet,- of which 20,000 square feet will compete. for expenditure potential for consumer goods. , At build out, Heritage. Commons will have 1,200 Homes, occupied by-households with an average income (2014 dollars) of '$65,000. These households have >a combined 4 household income of $78 million. Households in this income category will 'spend 15 percent of their income,for: (1). food consumed away from home; (2) some food.for home preparation; (3) miscellaneous purchases; (4) personal services; etc. 'That total is $11.7 j million, of which 20 percent ;car be "captured." by on -site retailers, if retail space is available, or about $2.34,million. On- S& "Residential Retail Sales Analysisat.:Build (2014 dollars) Number On -Site Households 1,200 Average Household Income '$65,000 Total Household Income $7,800,000 Convenience Purchases (at 15 %) $11,700,000 On -Site Ca ture'(20 %) $2,340,000 42 There will, be 2,000: on -site; :employees at .the, -600,000 square feet of on -site office space, if built, and 5;000: employees in area businesses: These employees will likely spend an average of-,$10 per day for 260 work days for lunch and other local, purchases, for a total of $18;2 million. If attractive retail stores are available on site at Heritage Commons; 20 percent of' this expenditure potential, or $16 million can be captured by on= siteretail stores. These two sources of retail sales expenditure, plus a 206/o' inflow sales from other area households, 'will generate total retail sales potential for on -site retailers of $7:13 million. At an average sales per square foot of $400, this annual sales potential will support nearly 30,000 square feet of. retail space. Thus, to support 100,OOQ square;feet of commercial -space on Heritage Commons, the majority of the,spac.e needs�to be service and business . related. This could be feasible with quality office tenants on site: Market Study Conclusion The projection of real estate development over a 15+ year period is speculative, at best. 'Hbwever, there are sufficient data to provide a comfort level that full market support- .exists .'for the Heritage Commons proposal, 'as presented, with- the following qualifications: 43 Number On -Site and Area Employees 7,000. ,Lunchtime Daily • Expenditure Potential (260 days) $10.00 Annual Lunchtime Expenditure Potential $18,200,000" Heritage Commons Retail Store Capture (at 20 %) $3;,600,000. These two sources of retail sales expenditure, plus a 206/o' inflow sales from other area households, 'will generate total retail sales potential for on -site retailers of $7:13 million. At an average sales per square foot of $400, this annual sales potential will support nearly 30,000 square feet of. retail space. Thus, to support 100,OOQ square;feet of commercial -space on Heritage Commons, the majority of the,spac.e needs�to be service and business . related. This could be feasible with quality office tenants on site: Market Study Conclusion The projection of real estate development over a 15+ year period is speculative, at best. 'Hbwever, there are sufficient data to provide a comfort level that full market support- .exists .'for the Heritage Commons proposal, 'as presented, with- the following qualifications: 43 i i t • ,Even with increased competition, ;the apar:tinent unit and townhome unit totals of 1,200 homes are marketable within a 15 -year development period at Heritage Commons, an average occupancy of 80 homes per year. 'The market area population growth supports view housing unit demand, and current: an'd'pipeline competition is ,,modest and not fully competitive for the market. ➢ To achieve 600,000 square, feet of office space, in or beyond the 15± year development period, 'w11 require attracting! one or more ;sizable users.. The site setting and new bridge over I -81 should .allow for .that. However, reaching 'the :600,000 square foot total will require �a stronger marketing effort. To. achieveF ,100.000 square feet of retail space, given the nearby competition, at least one sizable tenant of 15,000+ square :feet will be required: This is likely. We used the proposed land -use totals for the RA to follow... 'The results of the FIA are positive, for the .ciurentdevelopmeint- plan. Of special note is that, the County office building is-one key for project success for the commercial uses. The building will attract other office uses to the County and represents an important project component for the large positive economic impact that Heritage Commons will generate for Frederick County. I, Section II Fiscal and Economic Imvacts. Analvsis The fiscal and economic impacts analysis to follow is presented in two ways: first, those impacts which, occur directly 'from activities on -site at Heritage Commons; and; second, those impacts which :occur off -site due: to multiplier -or spin -off effects of resident and business expenditures -in the County. The off -site impacts will be explained_ further on in this .report; - the present section deals with the, on -site impacts. The on -site impacts include taxes generated by the development that'will'accrue to the County, such i as the real property and personal property taxes for the development and its residents and businesses., The fiscal Impacts anal ysis'also projects the public service and facility costs to be incurred by,Frederick County by development on -site and for off =site spin-off effects. The results :of the fiscal impacts analysis will be to compare, the tax revenues generated by property development with the tax- supported costs incurred by the County to. determine; the: fiscal impacts in terms of a revenue surplus or deficit over costs. This 45 is done for both on- site"- and off -site :impacts. Total annual im. pacfs for ',the property at buildout of the project will be projected at the. outset, to be followed by impacts by five - year phases over the 15 -year course of development of the site. Results are given in constant year 2014,dollars, rounded,to the nearest ten dollars.. Summary of Fiscal Impacts This section of..the, report for Heritage Commons will detail the:'economic and fiscal impacts of the planned Heritage Commons development as described above over as 15. -year development; period, with the recognition that the off -site impacts may lag somewhat behind development and on -site impacts as the market responds to changes in demand for .goods and services; Table 3 presents a summafy,of the;fiscal impacts that will be derived in this section of the 'report. It shows the sources of .net fiscal, benefits, being the difference between: tax revenues generated and tax - supported costs incurred I by the County to serve Heritage Commons. These are annual impacts; expressed in constant 2014 dollars, to avoid; projecfing 'inflation ,rates. 'The overall yearly impact of Heritage Commons after buildout and full.response by the local economy would be $3;6 million in net revenue surplus for Frederick County. The paragraphs to follow present the derivations of these figures'. Table 3. Summary of Tax. Revenues, Tax - supported Costs, and Net Fiscal Benefits_0n- site,and,0ff- site,. by. Developrnenf.Coinponents at Buildoui„ Heritage Commons, Frederick County, Virginia (constant 2014 Tax Tax - supported Net.Fiscal Development .Component Revenue Costs Benefit Apartments On- siteImpacts $1,847,790 $1,778,000 $69,790 Off -site Impacts 453 980 1.46 590 $307,39 0 Total Itnpact $2,301,770 $1,924,590 $377,180 Townhouses Orr- site_Impacts $404,140 $446,770 - $42,630 Off -site Impacts $138,590 $41,090 $97,'500 Total, Im act $542,730 $487,860 $54,870 M. Comwercial'Floor Space, . On =site fmpacts $612,030 - $73;980 $538,050 Off- site`Impacts $515,440. $iJ46,500T $368,850 Total Impact $1, ]-27,470 $220,570 $906,900 Office Floor Space- On-,site Impacts $1,409,750 $554,850 $854,900 Off- sitc,,Impacts $1,877,450 490,730 $1,386;720 Total Impact $3,2871200 $1,045,580 $2,241,620 Total-Writage Commons OP-site Impacts $4,273,710 $2,853;600 $1,420 „1' 10 Off -site Impacts• - $2,985,460 $825,000 $2,460;460. Total Impact $7,259,170 $3,678,600 $3,580;570 Sources: FY201.5 Adopted Budget of Frederick County, Virginia; U.S. Department of Commerce; and S. P.atz' &Associates, Inc. 47 On =site Impacts: Ta. Revertiues The revenues `to: `be considered ,in, this report, are ,taxes" collected by Frederick, County for General Fund. use- :: These inelude the, property taxes; utility tax, and other' smaller faxes. Tle, parag "raplis .to follow document ,the derivation of the tax amounts for the':.on -site devel'opmerit'at the property. Real Property Tax For convenience, the "real ;property (or' real estate) tax is 'treated, first; for 'the resi'd'ential developthent on -site, arid; then. for,.•the non - residential 4 developinent_on -site: This,,separat on; is: done to simplify thel presentation:, Total taxes for residential and non- residential -will `then be combined to givet total on -site taxes. Table 4 presents the findings for the; real property tax for the iesidenti'al; units to be built at.Heritage Commons; w.luchindude both rental apartments'tarad.'for -sale townhouses: The; table is ,straightforwar..d: numbers of units are _multiplied by average market value. per unit, ,and the result, is taxes at> the County fax rate of W585 _per $160 of value: 1 Market values per unit' wererconfif ed by field research on competitive: projects. The total tax from residential; units ;; t the property would' be' a 'lmost'$917,000,at`btiild'ou't: Table 4.' Derivafion of Real Property Tai A Him • Apartments Townhouses Subtotal Cost Per Unit, $115;000 $240,0,00 $fA630 Number of Units 1,;050 1?'S0 1,200 T,otal,Market.V;alue $120,75.0;000 $3610:00,000 $156;750;000 Rea -J Estate Tax Per $1.00 $0:585. $0,585 .$0 585 :. Total Real Estate_ 'Tax $706;390 •$210,6* $911;611990 Tax,Per',Unit. $673, $1,404 $764 sources-, FY 20115 Adopted Budget for Frederick County; Virginia; and, S. Patz ,& Assoc., Inc. 0 Market value fors the non - residential '(commercial and office) uses on site are based on developer hard costs; plus soft costs, land costs and.site •work. The commercial space includes both retail and services space. For ;the office space, only the taxable amount is inefuded, which is 450;000 square feet out of the total of 600,600 square feet to -be built on,site. The remaining 1_501000 square feet will be in:public use and will be non- taxable'. The . methodol'ogy follows, that for the commercial uses, with. unit costs multiplied' by number of square feet; and the resulting value multiplied by the real, property tax ,rate. Together, the non- residential uses would produce almost $555,000 in taxes per year. Table 5. Cost'Per Square.foot Number of ,Square Feet Total Market Value Real:Estate"Tax Per, $100 Total Real Estate Tax Tax Per Square Foot z'for N 'ommercial Office $122.00 $.183.50 100,000 450,000 $12,200,000 - $82;5751000 $0.585 $0.585 $71,370. $483,060 $0.71 $1:07 $172.32 550,000 $94i775.,000 $0.585' $554,.430 $'1.01 Sources: FY 20;15 Adopied Budget for 'Frederick 'County, Virginia, and S. Patz`& Assoc:, Inc. The chart below summarizes real property taxes -atthe property for all residential, and, h n- residential. uses.. The total real propertytaxes'from on- site•development equals approzimately,$1:5;million at buildout: Residential Non - residential Total Total Market -Value $156,750,000 $94,775,000. •$251,525,000 Real Estate Tax Per $10.0 $0.585 $0.585 $0.585 TotalRealrEstate Tax $9`1.6,990 $554,430 $1,471•,420 49 Taxes. -Both reisi-defits'dri Personal Propej!�,,T d_busipesses are assessed personal (pusirte ss ),propextyt#xes. For„ residents,. this is,,,a. tax ton motor vehicles; businesses is a tax On furniture, ixtur_e _�f in ' equipm ent (FF&E).. 'To address residertiAl personal t d property taxes, value, per vehicle in the Count y. The sequence bf,calculation to achieve this are- shown in Table 6 and summarized as..-follows:' The: FY 2015 . Adopted-Budget, ffirFiederick County ',e�,anallocation of $43.5 1 -,:_ i. I , giy million'for ex et-ted h persona property taxes;; Based on the, percent of estate, assessments that are residential - 69 percent - it is .estimated residential personal $30 million. • To this base- is AdWdlhe,arrtount of Personal Property Tax� Relief; Act (PPTRA) funding the County is expected 'to receive from the State of Virginia, at 48 perceot of residential, property taxes, or about :$,1,4",,mfllioni,-br'in g1hg the total to $44 million... Dividing the ',tota-I,resi(f6nf 'personal, property tax hy the tax, taI6 Produces the total tassessed value 6f.-Vehic-lesm-in the County, $914, mi Ili oA. o According to the statistics ,section ,of rthe current budget; 'there are. over, 31j000 -_ (occupied I _ the "Count y/I each Raving an average of 2.3" vehicles, for a County total,of almost 72,000 vehicles. 0jyij(jiTfg the ,nqmber ofvehicte's' into the lotal.,assessed'valUe of vehicles, gives an, average assesse&,valde'per v6hicle-6f $121-,700. 50 Table 7 applies the ,average assessed, value: per °vehicle and the personal tax :rate ;in the County to the,Triumbers of`�apartinents and 'townhousesf to be, built at Heritage Commons. This yields zip fsprfal' property tax of $984,000 for 'the apartments and i $167,000 for the townhouses; for, °a residential total, of over $1,1_'million. , In. the analysis; an'occupancy rate, of.95'percent�wassumed to accou_ntefor normal vacancy and turnover. This) is a conservative =figure;;, as actual occupancies may be highers: 51 a s 9 Table '7: Personal Property Taxes For 'Residential.Uses� -at Heritage Commons at Buldout Yconstant,�$201'4) Apartments Towinhoases Subtotal Number of Households @95 %- 998 143 1,,;140 Vehicle`s Per Household: 1..60 L:90 `1.64 Number of 'Vehicles 1,596 271 1,867 Value�P..er. Vehicle $12;682 $12;682, $l'2,682 Total Depreciated Value' $20,240;940 $3,433,730 $23,634,670 Tax - @ "$4:86"/$'100 $9831'710 $Ik4$80 $1,150,590 Tax Per Uriit. $937 $1,,113 $.1;009 Sources: .S. Patz & Associates, tnc For non - "residential floor space,, an average +and total FF., &E cost-is' shown in Table 8. This, is Appikciated to an average'of 40 :percent. 'multiplying, by the tax rate yields the projected'.b ismess property ;fax€ for, the proposed d'eu 'I pment, a total of $248;000 for the non - residential proper,.ties., Table ;8'PersonaLP,roperty:'Taxes' For Non = residential Uses at Heritage Commons, of Bu ldofit (constant $2014)' Commercial Office Subtotal Total ;Floor Space, $q. Ft;) 100,000 450,000, 550,000 FF &E%Square `Foot; $15 $25 $2 =3 TOt LFF &E $'1,500,000 $11;250;000. $12;750,000' Depreciated'fo 40516 $606,000 $4,500,000' $5,T00;000 Tax C? $4;$76/$`J: $29,,1'60 $21`8,700 $247 =,860 Tax PerSquare Foot $0,29' $0.49 $0.45 'Sources: S!. Patz &Assoc., tnc. 52 In the chart below., 'the on -site residential and non - residential, personal, property taxes at Heritage Commons are added to give $1.4 million in annual taxes after buildout. Residential Non- residential Total Total.Deprec ated-Taxable Value $23,674,670 $5,100,000 $28,774;670 'Tax -at $4.86 Per $100 $1,150,590 $247,860. $1,`3984,450 Tax.Per Unit/,Square Foot $1,009 $0.4 5: Retail Sales 'Tax Of the 100,000 square feet of commercial space; at Heritage Commons, it. is estimated that'80 percent will be in convenience .retail or, restaurant space, both subject to the reiail°'sales tax. The reinainii g,20''percent.would be comprised of .non - taxable personal and business services. This is a, "best guess estimate at this time as the list of expected retail tenants is not yet known. However, for the fiscal impacts analysis, it is a small tax and any changes will not greatly affect the overall net tax revenue analysis. With average annual store sales of $400 per square foot (an estimate that may change. over, time depending on the; retail/ service space mix); sales receipts for'the retail and restaurant space would' come to $32 million annually. This sales level represents an average f or' small retailers and restaurants. There is a'wide variation ,of, sales at retail spaces depending upon the type of store and'whether the store is a.company store or is . individually owned. The estimate of $400 per square foot in sales comes from area retail `brokers.and developers o£ retail space. These are 'modest; levels of business receipts. Retail stores at Heritage Commons will not,have an anchor'tenant;such as a big box store or supermarket, so sales may be lower compared with larger retail centers., Taxable sales from on -site _retail stores would yield $320;000 zft,lApercent tax rate; based on a rate of sales of $400 per,square,foot. 53 Table 4. Retail Sales Tax-for the Commercial Space m Heritai: Cbmmons at -Buildout (constanf.:$2014) Amount Commercial Floor Space 1.00;000 Percent RetaiMestaurant 0:80 Retail/Restaurant Sg..Feet 80,000 Sales Per Square Foot $400 Total Taxable Sales $32,000,000 Sales Tax Rater 0,01 Total Sales.Tax $320;000 Sales,Tax Per Gross SF $3.20 Source! Assoc., Inc. Business License Taxes. ,Certain businesses are taxed in the County under the Business, Professional, and Occupational License_ (BPOL) `tax. The two eases in effect ,ere. are taxes on ,retail sales -and' professional services, which include all private office space. The commercial space is limited to retail space, and °the office space excludes government space_ In Table 10, the respective BPOL tax rates, are applied to the taxable receipts in commercialand private office space; yielding, a total of $716;500 in BPOL taxes annually.- 54 Table 10. Susiness; Vrofes §ional, and.,Oceuuational '(UP'OL) .Tax at the Non= re "sidentia l.Uses;atsIleiita%e Comirions?at•Buildout "('constant $2014) Commercial Office Total': Taxable Floor Space . 801000 45,009 530,0000 Receipts Per Square, Foot $400 $250 Total, Receipts $3.2,000,000 $1;12:;500;000 $144,500,00Q Tax Rate Per! 1010 $0.20 $0.58 `BPOL- Tax $64,000 $652;500' _ $7.16,500 Tax,Per Oross' Square;Eoot, $0.64 $1.45 $1.45 Source: S. Patz &:Assoc., inc. 3 , 1 i i Consumer Utility Tazes�, Expenditures on, utilities: are typically taxed if Virginia municipalities on ,at least three of the, following; utilities: electric,' gas, wateri land ..line; celLphone, and:internet:. For-households most utility ,taxes are' approximately $100 per month ,per utility;: for three utilitiesr this is $108` per houseliold' per year. For the approxirriaiely 1;,000 households in :apartments, 'this comes to a -tax of- $107,730, and for the approximately 140 households, in'townl om s:; this tax comes to $1'5;3.9.,0;: for a total in residential, units, of $123;1201 Non = residential uatility taxes are determined by ;Backing -, residential utility taxes out of the total Coiunty, FY- 2015'budget for utilities;of $425 million. Tlus;is done in,Table 116„ resulting .in, an estimate ,of $32 `in utility taxes per:.e "mployee per year. With ,an estirriated.200.em :ployees.m commercial space,. the: utility; tax for that `space would„ come tol $6;480: jSirnilarly,, with 1;5Q0 employees in private, office space, the, utility taxes; in offices would come °to- $48,6i0; for; total non- residentialutility taxes of5$55 090. k 55 Tableli, Utility Taxes Per,Emoloyee, Frederick County, Virginia:.fconstant Amount County Utility Taxes FY 2015 $4,250,000 Numb-&of Households 31,345 Utility Taxes Per Household $108 Residential_ Utility Taxes $3,385,297 Non - Residential Utility Taxes $864,703 Employment' 26:,684 Taxes Per Employee $32. Sources: :FY 2015 Adopted Budget and Statistical Section for Frederick County;. Virginia Total residential and,non- residential utility taxes would total $178,210 annually after buildout in coristant year 2014,dollars. Meals 'Tax. Of the 100,000 square feet of commercial, space -at the site, up to 80,omsquare feet could be convenience retail or restaurants, the latter comprising 10,000 square approximately. Restaurants are fairly :receipts intensive, here assumed at $300 per squam foot; for sales ('receipts) of $3.0 million. Tax on x$3.0. niillion of sales at four percentgives an amount of $120,000; as Table 12 shows. 56 4 Motor Vehicle :Licenses. The analysis for personal property tares estimated ' 1,596 vehicles at the apartments, and '271 at the :fownhouses: The, license fee, is ,$25 per vehicle, giving total fees of $39;900. at the apartments and: $6;770 at the townhouses.. Total fees;woul'd be $46;67. Recordation Tax: •'Real estate ownership transfers are faxes at the state level at - the ,rate, of $0.25 per $10Q of 'value: One third of this, is; returned' to the municipality; a rate :'of $'.0833 per;'$10Q- ;Assuming that townhouse.unifs are:;re,gistered for recordation, e' three, times in 20 `years initial recordation plus resales every 1'Q years; -arid apar:.tments and. non- residential are :. recorded ,twice In 20 years, the following annual average recordation taxeswould, ,accrue '(see Table 13). 57 Table 13. Annual Average Recordation Tax at Heritage Commons, at Buildodt. (constant $2014) Total,.20= Annual Taxable Value Y.earTax. Ave. ,Tax. Apartments $241,500,000 $201125,0 $1:0,060 Townhouses $108,000;000 - 90 000 $4,500 Residential $349,500,000 $29.1,250 $14,560 Commercial $24,400,000 $20,330. $1,020 Office $165,150;000 $1374 6 880 Non- residential $1'89,550,000 $151,960 $7,900 Total.`Recordation Tax $539,050,000 $449,210 $22,460 Source: S. Patz & Assoc., Inc. Summary of On -site Tax Revenues'. Table 14 summarizes the taxes by type for residential uses at the site, and 'Table 15 presents - those, taxes for -non - residential uses. Both tables, are for. project buildout. Residential taxes total $2.3 ,million and. non- residential taxes total $18 million.. As Table 16 shows, the total tax revenue to accrue to Frederick CountYat :buil'dout ;of,the site would come to $4.1 million annually, in constant year 2014. dollars. Among the residential taxes, the major source is the apartments, as , they comprise many more units than do the townhouses. 58 TAI e- .14..Sumniary of TaxestR'esideiitial Uses at He- AtageiComiions, at B'uildogf, Fred'Bnck.County;'Ykginia (conAanf $2014) Apartments' STownhouses. rResi'dential RealEstate Tax $706,390 $141'0,600: $916,990 Personal Property IT ax $983,710 $166;880. $1,- 150;590 Retail..Sales Tax $0 BPOL,Tax $0 Consumer, Utility Tax $107;730 $15;390 .$`1.'23;120 Meals Tax. 1, $0 $0' $0 Motor Vehicle Lac Fee> $39;900 $6,7701 $46,670; Recordation'Tax $10,060 $4,5,00 44-560 Totat-Anin ail Taxes: $ i,847,7.9.0 $404,140 $2;25:1,930 Taxes `Per, Unit $-1,.760 $21694 r Sources: S Patz & Assoc., Inc..; Commerc al�space, being much less than office3space, contr but'esa -much smaller portion of the non iosidentiaf 'tax' ,revenue, just less.. than 25 _ percent. The °total n_ on- residential, tax of'$2 0 m" ilfion.averages $168 per square .foot.ir[ `taxes; i� iqq _ v _ - 59 F i i i i Table 15. Summary°of`Taxes Non - residential Uses at Heritage Commons, at Buildout, Frederick County.'Virginia (constant$2014), Commercial Office Non- resid. Real Estate Tax $71,370 $483,060 $554,430 Personal. Property Tax $29,160 $21,8,700 $247,860 Retail 'Sales Tax $320;000 $6 $320,000 BPOL Tax 1 $64,000 $652,500 $716;500 Consumer Utility Tax $6;480' $48;610 $55,090; Meals Tax ', . $120,000 $0 $1,20,000 Motor Vehiele.Lic.'Fee $0 $0 $0 Recordation Tax 1;020 $7,900 Total Annual7axes, $612,030 $1,409,750 $2;027;780 Taxes Per Sq`Foot $6.12 $3.13 $3.68 Sources: S Patz &Assoc;,anc. Among all taxes from the - site, the two predominant ones are the two property taxes, with approx, ima`tely $1.4 million in tax receipts each.for the County: This. is about 35 percent of the taxes in each case, meaning that the property taxes ;account for almost 70 percent of total taxes. The BPOL tax is third in size, at $0.7 ;million, or 17 percent of the total. This tax derives primarily from the office space. 60 Table 16. Summary of Taxes From Residential. andNon- residential UsesaMeritaiw Common §; at Buildout'(constant $2014) Residential Non- Re"sid. Total' Amount Real Estae Tax $916,990 $554;430 $1,471 ;420 Personal Troperty Tax $1,150;590 $24:7,860 $1;398,450 Retail Sales Tax $0 $320;000 $3201000 . BPOL Tax $0 $716,500. $716,,%0 Consumer Utility Tax $123, -120 $55,090 $178,210 Meals Tax $0 $120,000 $120,000 .Motor Vehicle Lia. Fee, $46,670 $0, $46;670. Recordation Tax $14,560 $22,460 Total Annual, Taxes. $2,251,930 $2,021,780 $4;273,710 Sources: S. Patz & Assoc., Inc. Costs to the County A The previous section derived the major tax revenues that would accrue to Frederick County from the on -site development at Heritage Commons; as planned The fiscal impacts analysis 'compares revenues with costs. In this case, since taxes are i deposited 'in 'the County`s General Fund, those revenues for the; site are compared with the tax - supported :costs that the County= would' incur in serving the residents and businesses at the site.! Other sources of revenue: and costs are excluded, since they accrue to ,separate funds °in which. expenditures,generally equal revenues. The source for the tax- supported costs the County would incur for service to. the residences and businesses at Heritage Commons: is the County's FY 2015 Adopted Bttdget: In the succeeding. paragraphs the budget is presented both in terms of budgeted revenues and budgeted expenses. The tax - supported portion of the .budgeted expenditures is derived and expressed on a per capita basis - for, population (representing residents), employment (representing businesses), and pupils a (representing costs of public education. The 7per- capita costs to the County will be 'applied to `the population, employment: and pupils, at the site to determine the overall costs to the County -from the development of the site: Cotinty- Budget Revenues. The purpose of presenting a summary of County revenues in the chart'below is fo show what-portion is from local taxes. This proportion represents. the "tax burden' for, the budget, representing. the amount of the County's local ;revenues that County residents and businesses must make up in. taxes. The chart shows that of $129:5 million in revenue from local sources in' the FY2015 budget, fully 95.5 percent must come from local taxes. CGeneral,Property Taxes _$93;490;226 Other Local Taxes $30,213,611 Subtotal Local Taxes .$123,703;837 Local Non -tax Revenue $5,837,265. Total Local Revenue $:129;541, 02- Percent Local Taxes 95.49% County Budget Expenditures. Table 17 summaries''FY2015 bu'd'geted General Fund expenditures by ,major function for Frederick County and the portion that is to be funded from local sources. (A detailed table of expenditures is presented in Appendix Table A -1.) These data will be•applied below to determine per I capita costs of County services and facilities that' must- be supported by local taxes based on the ratio derived above that 95.5 percent of local' funding for the General Fund must come from local taxes. The total Gener 'a1Fund budget for FY2015 is $142 million, of which $130 million .must'come °from localaources. This is over. 90 percent. Other sources are.transfers' from the State and Federal ,governments. 6) M Table 11. Summary of Budgeted General Fund Expenditiures.and the Amountib come from.Local-Funds, Frederick County, Virginia, -FY2015 General Fund Functional Areas FY2015 Expenditure! Budget Adopted General Gov't Administration $8,834,088 $8,037,938 Judicial.Administration $2,273,085 $1,198,643 Public Safety: $28,411,307 $24;551;146 Public Works $4,172,249 $3,312,968 Health and Welfare $6,910;546 $3,490,604 Community College $56;000 $56,000 Parks,,,Recreatio,n & Culture, $5,530,713 $3,227,880 Community Development $14924,902 $1,514,744 County Oebt'Service $2,561;645 $2,561;645 Other Departmental ez;. Schools $1,739,136 $1°,739,136 Subtotal $62,413,671 $44,690,704 Transfer to School Operating Fund $65,347,740 $65,347,740 Transfer to School Debt Service. $14;626,151 $`-14;626;15'1 Subtotal Schools $79,97,3,891 $79,973,891 Total General Fund $142,387;562 $129,664,595 .Source: Adopted FY2015 Annual Budget for Frederick County, Virginia Per Capita _-County Costs. In Table '18 budgeted General Fund expenditures { funded from local sources for- FY2015 ate, allocated to population, employment, and public school pupils, and. the local tax .share is calculated. 0hei hundred percent of the General Fund transfer to the- School Fund is tax supported, meaning that General "Fund t ax - suppoirted,.costs per pupil are $5,845 based on.recent enrollment of 13,066 pupils'in -the ,County 'school system. - Non - school expenditures are allocated by department to the two' other classes, of users, population and employment. For most; functional non- school departments;, total FY2015 expenditures are allocated to the users in proportion to their numbers, 76 percent "`population and 24 percent employment. The exceptions are health and welfare, community, college, and 'parks, recreation and culture, which are allocated in #heir ;entirety to population. The table shows that the per capita tax - supported cost of 63 j i E services and facilities for the .population average $447 per' capita; for employees, the; amount is $370 per capita. Table 18: General Fund Expenditures for Population, Employment, and Public School Pupils, Frederick'County; Virginia, FY2015 General Fund Functional Areas Population Employment Local Expenditure Budget Share Share Funding 0.759154459 0.240845.541 General Gov't Administration $6,102,036 $1,935;902 $8,037,938 Judicial Administration $909;955 $288,688 $1,198,643 PublicSafefy $18,638,11.2 $S, 9 13,034 $24551,146 Public Works $2,5.15,054 $797,914 $3,312,968 Health and Welfare $3,490,604 $0 $3,490,604 .,Community Coll'ege $56,060 $0 $56,000 Parks, Recreation &,Culture , $3,227;880 $0 $3,227,880 Community Development $1,149,925 $364,8`1'9 $1,514,744 County Debt'Service $1,;9.44;684 $61,6;9:61 $2,56.1,645 Other.Departmental ex. Schools. $1,320,273 $418,863 $1,739,136 Subtotal $39,354,524 $]0,336,;180 $49,690,704 .Percent Taxes $ f $1 $1 Subtotal Taxes $37,581,166 $9,,870,421 $47,451,586 Number of Persons 84,109 26,684 110,793. Tax- expenditures ,Per'Capita $447 $370 $428 Transfer to School Oper..Fund $65,347,740 $0 $65;347,740 Transfer to Scho61,Debt: Sery.. $14,626;151 $0 $14;626,151 Subtotal ,Schools $79;973,891 $0 $79,973,891 Subtotal School Taxes $76,370,179 $0 $76,370,179 FY2015'Pupil Enrollment - 13,066 0 13,066 ,School Tax -cost Per Pupil, $5,845 $0 $5,845' Total General'Fund Expenditures $119,328,415 $10,336,180 $129,664,595 Source., Adopted.FY12015 Annual Budget for Frederick County, Virginia and,Statistical Section. On -site Costs to the County. Per capita costs for the County are multiplied by population,, employees',and pupils at Heritage Commons to estimate the tax- supported , costs thatFrederick County will incur in serving the Heritage Commons development at buildout. The following paragraphs derive the estimated costs to the County from the - i' development, first population; ,next pupils, and' .finally _employment. Data in Table 19 Show the number of Households at'95` percent of" all "residential units, which it has been shown is conservative: 'At, $447 per capita, the: apartments entail County, population .tax- supported costs of $758;000 .annually,r in constant year 2014 dollars'. By comparison, the townhousesentail,$172,000 in population costs. Table, 19. General Fund Costs:for FrederickEbtinty Allocated to Residents at Heritage Commons,( constant,$2014) Apartments Townhouses Total No.. of,Households 998 143 1,140 Population/Household 1.7 2.,7`. 1.83 si Total Pop_ ulation 1,696 385 2,081 CostTer. Capita $447 $447 $447 Population Costs $757,690 $1 71,910 $929,000 Costs Per Unit $722 $1,146 Sources: FY 2011.5 Adopted;General Fund..Budget,and;Statistical Section, Frederick.County, Virginia, and,S. Patz & Assoc.,,; Inc. if School costs have 'the_' greatest, cost 'impact from the site on the County. The key P, to school costs is the {pil generation rate, that is,' the number of public school pupils that. can be expected, cn average, from each housing unit. The pupil generation rate for apartments is based on our research of the areas two better and most comparable apartments. 'Both happen to be in Winchester; there, is only on& non- subsidized apartment cor iplex in, the County,, and it is not of the quality that will be developed at- the Heritii g e Commons site. There are few decent apartment comparables to evaluate student generation rates for the study of Heritage Commons, as most area apartment` communities: are. at lower. rents. Pepper Tree ,and oStuart. Hill are the two best examples of comparables to Heritage Commons where data were available. Pupil jgeneration rates for'those'two apartments are shown;in the chart below. 65 L Apartments'` P- Up11St Units Rate. Pepper Tree 20 194 0.103, Stuart Hill' 9 180 0.050 Total 29 374 0.078' To be more conservative; a. pupil generation rate of 0175 pupils per apartment unit is assumed.. For, townhouses, the rate for better properties is 0.3 pupils per unit. .For the: townhouses, a s inilar approach had been taken; °in the .survey of existing new, active comparable 'townhouse developments to Assess-their pupil generation rates. There were- more comparables for the townhome market. Overall, these are 0.33 pupils per townhouse, as.follows;(these data are from the Frederick County. School District). Townhouses - Pu ils Units Rate w: Brooklarid Manor 20 6& 0.294 'Snowden Bridge 20 44 0.455 Fieldstone 8 34 0.235 Total 48 146 0.329 There is considerable discussion on the per pupil. ratio, to use for Heritage. Commons and other like properties. The two apartment buildings shown lin the chart a above would "- suggest," a 0.1.t,rate of pupil per apartment unit. .Higher: rent apartment properties. generate 'lower rates of students than lower rent. properties. We used the ratio of 0.175 to be conservative; 'which is almost double the "rate shown in the chart. Using this higher- rate reduces.ret tax revenue by $440,000 annually at project built -out. We 'believe` that the 0.175 ratio ,for pupils per . apartment unit is a current and conservative number based on our research, for this study and others.: Apartment units at Heritage Commons .will' be; in a suburban setting Within the Winchester marketplace, only the' more modest rent apartment properties generate a sizable number of school children. The rate used for the apartment units at Heritage Commons is one -half the rate .used for the'townhomes.: This is an appropriate ratio. 66 At $5,845 in General Fund _taxes per pupil using, the above� ratios, the 222 pupils expected at. th&.on -site housing would .generate $1.3 'million in tax - supported school costs for the County; $1:0 ':million `from the apartments and '$0.3 million for the townhouses. Talile.20. Costs to Support Public School Pupils at Heritage. Commons by Housinu Type (constant, $2014) Apartments Townhouses Total ,No;'of Households 998 143 1,140 Pupils Per H'Hold 0.175 0.330 .0.194 No. of<Pupils 175 47 222 Cost Per Pupil $5,845 $5,845 $5,845 School Costs;. '$1,020,310 $274,860 $1;295,170 Cost --Per Unit $972 $1,832 $1,079 Sources: FY 2015 Adopted_ General FundBudget,and Statistical Section, Frederick County; 'Virginia, Frederick County School,Distri6t, land >S. Patz & Assoc., Inc. The following chart summarizes the costs to the County from the residential development proposed for -the'site: js Apartments Townhouses. Population Costs' $757,690 $ 171;9.10 School Costs a . $1,020;310 $274,86 0 Total Costs $1,778;000 $446,770 Total $929,600 $1,295,170 . $2,224;770 Costs from. the businesses at Heritage Commons come from thei number of employees at the establishments. Costs are relatively small from the commercial space ince :it is; of "limited extent' at ,$74,000 annually. Costs attributed to employees. in office space would come to:$555,000 for 1,500 employees -. M 1 r Table 21. CostsIoe t'o.Support Employees 'at';Herifage Commons ('constant $2014) .Office Commercial Taxable Total Floor Space SF 100,000 450,000 550,000 Sq. Ft./Emplbyee 500 300 '324 Employees 200 1,500 1,700 Cost Per Employee $370 $376 $370 Employment °Costs $73;980' $554,850 $6282830 Costs Per Sq: Ft. $0.74 $1.23 $1.14 :Sources: FY 2015 Adopted General Fund Budget and Statistical Section, Frederick County, Virginia, and S. Pate & - Assoc., Jnc. a Net Fiscal Impact: The,net fiscal impact'is the net benefit in terms of the surplus (or deficit) of tax revenues: compared, to tax - supported costs for,.Frederick County from Heritage Commons, as planned. At buildout Heritage Commons; would produce a total net:surplus revenue, of $1;4 million,.as shown in Table 22. This ds-the difference between revenue of $4.3 million and costs of $2.9 million annually. Over 98 percent of the net benefit would come from the non - residential components of. the development because of the high costs of public school: education. for the resident al.components. .: �i Table 22., Source: S., Patz.& Associates Inc. . ` Off -site Impacts: Economic and Fiscal In addition, to the revenues and costs that accrue to Frederick County from the development "on - site," as described above, there are also off -site. impacts that occur as a result of residents, employees and businesses expenditures throughout the County, and as other businesses re -spend the business receipts off -site for the purchase: of ;goods ;and services from other vendors in the County. The multipliers used in this analysis are p specific to Frederick County; Virginia. Consumer budgets are identified by the U.S. 'Bureau of Labor' Statistics by area and income level. There is no direct budget information for Frederick County, and the income level for the Washington, D.C. area his 69 Apartments Townhouses- Residential Toial.T,ax Revenue $1;847,790. $404,140 $2,251,930 Tax- supported. Costs $1,778,000 $446;770. $2;224,770 NetFiscal,Benefit ; $69,790 - $42,630. $27,160 Number of Units 1,050 150 1,200 Net;Benefit Per Unit $66 -$284 Commercial Office Non- residential Total Tax Revenue, $612,030 $1,409;750 $2,021,780 Tax- supported Costs $73;9$0 $554;850 $628;830 Net Fiscal Benefit ^ $538,050 $854,900 $1,392;950 Number of Sq. Feet 100,000 450;000 550;000 Net Benefit Per'S.F. $3.46 $1.90 Residential Non- residential Total Total Tax Revenue:, $2,251,930 $2,021,7$0 $4,273,710 Tax- supported,Costs4 $2;224,,770. $6281'830 $2,853,600 Net Fiscal Benefit , $27,160 $1,392,950 $1,420,110 Source: S., Patz.& Associates Inc. . ` Off -site Impacts: Economic and Fiscal In addition, to the revenues and costs that accrue to Frederick County from the development "on - site," as described above, there are also off -site. impacts that occur as a result of residents, employees and businesses expenditures throughout the County, and as other businesses re -spend the business receipts off -site for the purchase: of ;goods ;and services from other vendors in the County. The multipliers used in this analysis are p specific to Frederick County; Virginia. Consumer budgets are identified by the U.S. 'Bureau of Labor' Statistics by area and income level. There is no direct budget information for Frederick County, and the income level for the Washington, D.C. area his 69 too high to be applicable here. Instead, nati onal, data, :for a budget for household income in the $50,000's has been chosen for the apartments; and household incomes of $90,000 for residents in;the townhouses. About 77 percent of this income is spent, other uses being taxes, savings and transfers; to others not living `in the household. It is assumed that; 40 percent of all consumer and businesses ex, p enditures from the on -site development are .made outside of Frederick- County an 60 percent are retained within the `County. Among the larger expenditures by consumers are 19 percent 'for shelter and 27 percenf for retail trade, including automobiles: Consumer expenditures made off -site in the County are translated into economic impacts in the County, `using multiplier matrices provided for the local area by the U.S. Bureau of Economic Analysis: - These. multipliers :capture the round -by -round flows of expenditures in the Ccunty'initiated by residents.-and businesses from on -site. There are separate matrices for business receipts, employment and. employee earnings. The items in the consumer budget are multiplied in turn by these expenditure- specific categories in each matrix and, summed,to give the "ripple effect," ",spin-off," or "multiplier effect" of circulation of ;money through the. economy. The ripple, effects, plus the original consumer, expenditures, equal the total economic impacts of apartment residents on the City economy. Business Receipts The chart below sets forth the economic dollar flows set; in motion by expenditures, off -site by, residents and businesses at the Heritage Commons. The direct expenditures in the County represent the expenditures by on -site; residents and businesses off site directly., They total $170 trillion when housing units are occupied and' busines °sos in o p, eration. The largest component would come from the 450,000 square-feet of privately= occupied office space. 70 i This ,$170 . million .in ezpendtizres for goods. and services would. be expected to comprise. 60 percent. in= county dollar flows,°which would creaielanothef -$221 million in ripple effects or spin-"Off within the County. The' :ripple effect: would be two to three times direct, expenditures. The exception is com_'"mercial,z where retail trade can be expected to make. most of its wholesale purchases of goods and, services from sources outside the County. Residents. of townhouses create relatively greater impacts than do .apartment renters because of higher income of households in townhouses. Altogether, the business impact in Frederick. County would come to $391 million. These .off=site impacts also create tax receipts and costs! to the County as do_ on -site impacts (see above). Off=site lmpacts:by Land Use - Avartments Townhouses Commercial Office Direct Expenditures $23 ",206;000 '$6,365,006, $28,000,000 $112;500,000 ' Indirect Spin -off Effect. $47,651,000 $17,669;000 . :$8,026`,000 $147,938;000 Total Business Receipts $76,857,000 $24,034,000 $36,026,000 $260,438,000 Employment and Earnings PreviousT analysis ;-identified ,1;700 employees that would be on -site at the property., occupants of office'space. Another ;2- jobs would be'created off - site by the spin -off from; the on -sife development., The :office space on -site at Heritage Commons would have.-the,,greatestimpact, creating, over 1,300.off =site 'jobs off - sitein the. County,.-„ 'These off -site. employment impacts would.generate $149= million in employee earnings.in the ,County,. :This; would bean average of .about $671'000 "per. employee: This is heavily, influenced. 6y the higher income jobs spun -off ,from. the offices ori; site:, Off -site Fiscal;.Impacts: The methodology used in projecting, fiscal impacts off =site „mirror those, used -to project fiscal. impacts on -site. As before, revenues will be limited to taxes, and costs will be those that must be tax-supported, as; based on employment. The. RIMS. II; multipliers: 71 from the Bureau of Economic Analysis break receipts, employment and ea. rnings impacts down into 21 different sectors, and the- impact dollar amounts (business revenues) in the, sectors form the basis for determining` taxes. Many fazes can be calculated directly from these receipts, or from employment created off -site in the same fashion as for on -site ,taxes. Costs to the County can likewise •be'calculated. from off -site employment created., Because of their: commercial nature, the non - residential components at Heritage Commons would be' expected to yield considerably greater off -site impacts than would the off -site expenditures `of residents at the site. This is the case, with the non - residential components having, a net fiscal benefit of $1.8 million annually, compared to $0.4 million for the residential components, for a total of $2.2 million annually after a t buildout in constant 2014 ,dollars. Table 23 below summarizes the off -site fiscal. impacts by type of use. Appendix Tables ,A -2, A -3, and A -4 give the .individual tax sources for each type of use. Table 23. Summary of Off -site Sgin -off Impacts for Heritage Commons; at Buildout, bv:Type of`Use 4onstant $2014) Tax. Tax - supported Net Fscaf Type•of Use Revenue Costs Benefit Apartments '$453,980 $146,590 $307,390 Townhouses $138,590 $41',090 $97,500 Commercial $5.15,440 $146,590 $368,850 Office $1,877;450 $490,73 0 $1,386,720 Total Off -site Impacts $2;985;460 $825,000 $21160;460 Sources:, Bureau "of Economic Development and Bureau of Labor Statistics, U.S. Department, of Commerce, Adopted FY2015 Budget for Frederick County, Virginia, and S. Patz & Associates, Inc. 72 Summary of On- and Off -site Impacis The overall annual impacts, both on -site and ,off -site spinoff; would be substantial from,Heri,tage.Commoi s,for Frederick County. Total tax revenue ieach year would be,$7.3 million, compared to costs to the County, of $3.7 million. This would leave a net'fiseal benefit of $3.6 million annually for the County. These overall impacts are summarized in Table�24,by' type of "use on -site at Heritage Commons. Table 3, above in the introduction to this section, and` Appendix Table A -5 provide detail on both the. on- site and off -site impacts from the development. Table 24. °Summary of. Total On -site and Off-site Impactsfor.Heritage Commons,, at Buildout, by Tyne of Use (constant $20141 Tax Tax- supported Net Fiscal Revenue Costs: 'Benefit Apartments $2;301 ;770 $1,924,590 - $377,180 Townhouses. $542;730 $487;860 $54;870 Commercial $41127,4,70 $220;5 „70 $906,900 Office .$3,287,200 $1,045,580 $2,241;620 Total Off-site:lnipacts $7;259,170 $3;678;600 $3,580;570 Sources- Bureau of Economic.Development and Bureau of Labor Statistics, U.S. Departmentiof Commerce „Adopted. FY2015 Budget for Frederick- County, Virginia, and S. Paiz & Associates, Inc. Phasing of Heritage Commons The developmentof Heritage Commons is planned for three five = year, phases, for a buildout period of 15 years, The chart below sets forth the phasing scheme for Heritage Commons, and the discussion following the chart addresses the net fiscal benefit to accrue. to the,;County for each type of use for each phase. 73 Phasing By Use' 1st 51yrs. 2nd 5 Yrs 345 Yrs 'Total Apartment Units -, 350 350 350 1,050 Townhouse Units 100 50 150 Commercial. Square Feet; 50,000 25,000 25,000 100,000 Office .Square.Feet 100,000- 17.5,000 175,000 450,000 The net fiscal benefits-, for each phase are calculated by multiplying the number of units or square feet of development for each development component times the net benefit per unit (for residential) or square foot (for non - residential). All of, these benefit parameters have been derived and set forth in previous tables in this economic and fiscal impacts section of; th'e' report; or in Appendix tables in the case iof off -site benefits., The calculations are summarized-in Appendix Tables A -6, A -7, and" A -8. Heritage Commons would generate- on -site net benefits of $500,000 to $900,000 during each phase of the three five -year phases in the '15 -year development program, Only the townhouses show any on -site deficits, as has been shown previously, due to the high cost of educating. public school students living in townhouses. These are annual amounts, in. constant•2014 dollars. Total annual on -site benefits at the. end of the 15 --year development program would come to $1.4 million, each year. Off -site net- fiscal benefits average about $800;000 each ;year; fora total of. '$2.2 million over the 15 -year buildo.ut' period. It should, be, reiterated actual off- site'bene.fits may lag behind on -site development and impacts due to give the market time to respond to. increased demand in the County from Heritage Commons. Total'net fiscal.benefits - on -site and off -site - would be in the $1.0 million to $1.2 million range for ;each five year development phase in. the 15 -year development_ .program:: The ,commercial space would contribute, about $900,000 in benefits over buildout, with the officei space contributing $2.2 million. The 'total annual. net fiscal benefit for Heritage Commons would be $3.6'million. Total on-site and off= sitemet fiscal benefits are. summarized in Table 25 by type of - development component and five -year .phase (see Appendix tables). 74 . c 75 APPENIX A:; Rev. ew of 0.'e�elopmerit:Impacts'Mode1 D Following is our, brief review of, the County's proposed Deuelopinent .Impact Model (DIM), which is a planning tool to provrde- guidarce. to County' staff and elected officials ;,on the evaluation :of :new development proposals,and. rezor ing. There are !a. number of, factor described ,in.,tl e 'DIM that in our.judgment, are;;incorrect or, poor comparables and thus4'coirld generate: an incorrecttconclusion".for sorrie reviews: It Is the purpose of `this brief analysis and evaluation 'of'the DIM to be critical, rather, Our purpose, rs to identify issues that- may require . mo,r& review. Following 'is= a If of report assumptrors thaf we would like to ,discuss; as County 'officials: review our a`tt'ached FIA.for'Heritage Commons. t - 1. The DIM `uses�,U:S: Census data to determine the average household size in the, C)unty, and the number of`,studerits, per housing unit by` type.. While;' ,.these" � are clearly correct :data, ,. "they .often; do; not• represent p ;able. data' for the evaluation of a new: development:, proposal, com ar pa "rtrcularly a :more. upscale new proposal compared with the Coiirity average.. Using census- data: .for both'.calculations ;includes' all' housing' types,:- i:e.., market1'rent; affordable; mature, new, etc. `For apartrnent units, the older and lower rent,units often have an abundance; of, fhree- bedroom ,units; which rn =turn, generates more; school child "r "en The comparison of census data is� 'therefore•j' problematic in the "eualuatrgr► of. a' new :apartment ! ro osaI `without three - bedroom units; m particul!ar.; The pupil P.-P. generation ratio f.could be much lower for. these higher rent. apartment units compared with the County'average, 2. '.If our analysis of the DIM "is correct, it. does, not include: all taxes `paid. by. home- owners or renters. There is a wide range of. taxes; in addition °fo, ,real estate: and personal• property faxes „ that accrue fog the County from. . County' households'. These are shown "in our FIA of Heritage Commons. ` 3 M''ost important :ih the;eoMpari8on of revenues4andl expenses from County households is -the'off -site expenditures from Households, r.e':, the.amount; Of money' spent at focal commercial establishments. This .expenditure creates "a ' "spin-o- ff'' or "ripple effect" of monies within za jurisdiction,. which, generates .a ratio of 1.8. times the on -site benefits: of real'estat& and •personnel `taxes. 77 This ratio, calculated by officials of the Federal Bureau of Economic Analysis shows_ahat` total net.,revenues from hew, housing units is nearly double; the on- ste.benefits of real estate and personnel taxes. In conclusion; our analysis is intended' to state that new housing units can generate a, net positive economic ;impact for the County; depending upon the value of the,homeiand incomes of the.occupants: This conclusion is�nof evidenHn the.DIM. Additionally ,-. retail- space and office space, in particular, cannot be successful without a sizable and:, expanding population. That can only come from the addition of new housing. The DI,M does not calculate the amount of tax revenue, from commercial establishments that are derived from household expenditures. o Our FIA for Heritage Commons includes the assumptions and calculations . discussed in this Appendix. We welcome any discussion as we present our report to County officials. ti 78 79 Table A -1. Detailed General Fund Budget for PY2015 Showing Share of ,'Expenditures Comiug Vtoin Local Funds „Frederick County, Y,irginia.(current dollars) General Fund, Functional Areas_ FY2015 FY2015 .Expenditure Budget Adopted Local Funds GENERAL'GOV'T ADMINISTRATION Board.Ofrsupervisors $248,336 $248;336 County Administrator $702,539 $702,539 County Attorney- $239,668 $239,668 ,Human,Resources $320,209 $320,209 Independent fluditor $66,000' $66,000 Commi'' 'ssioner of Revenue $1,200,010 - $1,000,106 Reassessment $1=93,948 $493,948 Treasurer $1,179;735 $655;235 Finance. $763,469 $763,469 Information technologies, $1;191;998 $1,1'63,298 Management Information System $523,810, $52= 3,8110 Other $1,935,084 $1,935,084 Electoral Board $106;413 $106,413 .General Registrar '162 -769 119,823 Subtotal $8,834,088 $8,0.37;938 JUDICIAL ADMINISTRATION Circuit Court (� $61;300 $61,300 General._ District Court $15;926 $15,926 Juvenile,$'Domestic.:Relations Court $- 19;785 $19,785 Clerk.of the Circuit Court $741,447. $242,185 Law Library ' $1 1000 $0 CommonweAth':s;Attorney $1,296;55.7 $833,377 Virginia Witness Program $126,070, . $26,070 Subtotal $2,273,085 $1,198,643 PUBLIC SAFETY :Sheriff $11,241,515 $8,426,862 Volunteer Fire Departments $842,560 $641,560' Ambulance and' Rescue Services $395,200 $31;5,200 Public ,Safety Contributions $5,467,925 $5,467,925 Juvenile�Couri Probation. $141;780 $21,780 Inspections $1,090;017 $399,917 Fire and Rescue $7,871,989 .$7,983,581 Public-Safety Commission $1,360,32'1 $1,293,321 Subtotal $28;411,307 $24,551,146 :1 Table A--1. Detailed General Fund $udget.for FY2015`Shoyvinp Share of ,Expenditures.Coming,From Local' Funds,Yrederick County.. .Virginia (current dollars),.continued. General Fund' Functional Areas FY2015 FY2015 Expenditure Budget Adopted Local.Funds PUBLIC WORKS Road;Administratipn $28,000 $27,000 SireetLights? .. $43000 $0 General Engineering :$356,788 $219,788, Refuse Collection $1,232,983 $974,215 Refuse'Disposal $375,000 $322,644 Litter Control $24;384 $12,207 ''Maintenance Administration $576,750 $273,645 County Office,-Buildings $964,638. $964;638 Animal Shelter-. $570,70 6 518 831 Subtotal $4,172,249 $3,312,968 HEALTH AND WELFARE Local Health Department ;$30,1;000 $301;000 Northwestern Community Service $318;000 $318,000 Area Agency,on Aging $60;000 $60,000 Property Tax Relief - Elderly $520;000 $520,000 Social Services- Administration $41248,461 Public Assistance $1.,463,085 $149,990 Subtotal i' $�6,,9 1'01546 $3,490;604 COMMUNITY COLLEGE _$56,000 $56,000 PARKS, RECREATION & CULTURE Parks & Recreation - .Administration $582 -,853 $582,853 Parks Maintenance $1,798,301; $1,434,601 Recreation Centers $1;643;041 $30,008 Clearb "rook Park $346,984 $145,484 Sherando Park. $359,534 $234,934 Regional Library 800,000 $00,000 Subtotal $5,5.30;71 3 $3,227,880 COMMUNITY DEVELOPMENT Planning_and.Develo"pment $1,098,754 $688;846 Economic.Development-..Authority $544;223 $543,973 Zoning Board $6,368 :$068 Building appeals Board' $550 $550 N .-S.V.;Regional Commission $43,000 $43;000 `Soil and Water Conservation $7,000 $7:;000 Extension $225,00 7 225 007 Subtotal $1,,924;902 $1,514;74:4 { F. Table ;A -1: 'Detailed.General'Fund Bufteffor:FY2015 Showing Share of Expenditures Coming From Local Funds, Frederick; County, Virginia (current dollars), continued General`F.ud.Functional,Areas FY2015 FY2015 Expenditure. Budget Adopted Local Funds COMMUNITY *DEVELOPMENT Planningand;Development' $1,098,754 $688,846 Economic Developinent Authority $544,223 $543,973 Zoning Board $6;368. $6,368 Building appeal's Board $550 $550 N.S.V. Regional Commission $43,000' - $43,000 Soil and Water Conservation. $7;000 $7,000 Extension $225,007 225 007 Subtotal $1;924,902 $1,514,744 NON. - DEPARTMENTAL Transfer to School Operating „Fund $65,347:,740 $65,347,740 Transfer to School Debt Serv. Fund $14,626,151 $14,626,151 Transfer to County. Debt Service $2,5611645'; $2,561,645 Other.Non- departmental $1,739,136' $1;739,136 Subtotal i $84,274,672, $84,274,672 Total Generali!Fund $1421387;562 $'129,664,595 Source: Adopted Budget for FY2015, Frederick County, Virginia i i Table A 72. Summary of Annual Tax Revendis,! County Costs, and Net - FiscalBenefitCreated Off=site'by the Residential.Units at ,Heritage Commons,.at;Buildout (constant $2014). Apartments Townhouses Residential. Impacts Lmpacts 'Impacts Real Estate Tax $104,320 $30;650 $.134,970. Business Property`Tax $86,670 $25;460 $11:2,130 ''BPOL Tax $81,900 $22;800 $104,700 Retail. Sales Taz, $73,430 '$24;910. '$98,340 Motel Tax $12,880 $4,370 '$17,250 Meals. Tax $65,100 $22,080 $87,180 Motor'=Vehicle.Licehses $16,840 $4,720 $21,560 Utility_ Tax $12,840 $3,60 0 16 440 Total Revenue $453,980 $138,590 $592;570 Les "s Costs - $146,59.0 - $41;090. ::$187,680 Net Fiscal Benefit_ $307,390 .$97;500 $404,890 Number Of Units $293- $650 $337 Sources: Bureau =of Economic;Developmentand- Bureau of Labor Statistics, U.S., Department of Commerce., Adopted FY-2014 Budg6t,for Frederick County, Virginia, and S. Patz && Associates; Inc. i �f �i ;i 83 Su Table A =3. mmary of Annual Tax.Revenues, County Costs, and Net Fiscal Benefit Created Off-site by.`the Non = residential Components at Heritage Commons; at.Buildogi f onstant -2014 Commercial Office Non- residential Impacts Ln acts , Impacts Real Estate Tax $104,320 $349;2,40 $453,560. Business Property Tax $86,670 $290,140 $376,810 BPOL`Tax '$11,020 $961,280 $972,300 Retail Sales TA $161,290 $21;040 5182,330 Motel Tax $4;340 $71;780 $76,120 Meals Tax. $130;530 $84,600 $215,130 Motor Vehicle Licenses $4,430 $561,380 $60;810 Utility Tax 12 840 $ $42-,990, $55-;830 Total Revenue; . $515,440 $_1,877,450 $2,392,890 Less Costs - $146,590 - $490;730 - $637,320 Net Fiscal Benefit '$368,850 $I 1386,720' $1,755,570 Number: ofSq. Feet $3.69 $3.08 $3'.19 Net Benefit Per S.F. $t -04;320 $349,240 $453,560 Sources: Bureau.of Economic Development and Bureau of Labor Statistics, U.S. Department of Commerce, Adopted FY201`4. Budget for Frederick County, Virginia, and S. Patz & Associates, Inc, 84 TAW A-4. Summary of:Annual Tax Revenues,-County Costs, and Net Fiscal Benefit Created Off -site, by the:Residential and Non -. residential Components at `Heritage Commons, at Buildout, Frederick. County, Virginia (6nstant:$2014). Residential Non - residential Total Impacts Impacts: Impacts Real Estate Tax $4531-566 $5$8,530 Business Property Tax $1,12,130 $376,810 $488,940 BPOL Tax " $104700 $972;300, $1.,077;000 Retail Sales Tax $98,340 $182,330 $280,670 Motel Tax $17,250 $761120. $93,370 Meals Tax $87,180 $2151130 $302,310 Motor Vehicle Licenses $21,560 $60;8'10 $82,370. Utility Tax $16,440 $55,830 $72,270 . Total Revenue $592,570 $2;392;890 $2,985;460 Less Costs - $187,680 - $637,320 - $825,000 Net Fiscal Benefit $404,890 $1,755,570 $2,160,460 Sources: B'ureau4of Economic Development and Bureau of Labor Statistics, U.S. Department of'Commefce, Adopted FY2014 Budget for' Frederick County; Virginia, and S. Patz & Associates, Inc: i Table A -5. :e F Apartments Townhouses Residential Total Tax, Revenue $2;301 -;770 $542,730. $2,844,500 Tax- supported Costs 41;924,590 -$487,860 -$2,412,450 Net - Fiscal Benefit $377,180 $54,870 $432;050 Units 1,050 150 1,200 Net Benefit Per Unit $359 $366 Commercial Office Non- residential Total Tax Revenue $1,127,470 $3,287,200 $4,414,670 Tax- support ed Costs - 220 570 - $1,045,580 - $1,266,150 Net Fiscal.Benefit $906,;000 $2,241,,620' $3,148,520 Square Feet 100,000. 450,000 550,000 Net Benefit Per, SF. $9:07 $4.98 . Residential Non - residential Total Total Tax Revenue $2,844;500 $4;4.14,670 $7,259,170 Tax- supported Costs 42;412;450 - $1;266,150 - $3,678,600 Net Fiscal Benefit• $432,050 $3,148,520 $3,580,570 Sources: Bureau of EconomicDevelopment and Bureau of' Labor Statistics, U.S. Department of Commerce, Adopted FY2014.Budgeffor'Frederick. County, Virginia, and S. Patz & Associates, Inc. :e Table A =6. Summary of'On -site Net Fiscal Benefits for'Each,Development,Component for.'Each Phase of the: Development Program,'Heritage Commons at 'Buildoui, Frederick County, Vi rginia;(eonstaht $2014) Phases 1"st 5 yrs 2nd 5 Yrs 3`d 5 Yrs Total Number of.ApartmentXnits 350 350 350 1;050 Net Benefit at'$548/Unit $23,260 $23,260 $23,260 .$69,790 Number of Townhouse Units 100 50 150 Net Benefit at -$'165 %Unit. = $28,420 - $14,210 = $42,630 Number of Commercial Sq.,Ft. 50,000 '25,000 25;000 100,000 Net Benefit at $5.38/SF $269,030 $134,500 $134,500 $538,050` Number of Office Square Feet 100;000 175,000 1,75,000, 450,000 Net Benefit at $2.1'5 /,SF $489,980 $3325460 $332;460 $854,900 Total Net On- site,Benefit $4531850 $476,020 $490,230 $1,420,110 Source: S. Patz & Associates, Inc, w _ :l 4 4 Table A -7. Summar�.of Off -site for Each Phase -of. the Buildout, Frederick Net Fiscal.Benefits16r Development County, Vir>:inia Each Program, (constant Development Heritage Commons $2014) Component at Phases' 1st 5 vrs 2nd 5 Yrs 3r&5 Yrs, Total.. Number of Apartment Units 350 350 3580 1,050 Net Benefit at $320/Unii� $102,460 $102,460 $`102;460 $307;390 Number of Town'house'Un`its 100 50 $36,580 150 'Net Benefit at$664/Unii $65,000 $32,500 $453,450 $97,500 . Number of Commercial Sq. Ft. Net, Benefit at $5;19 /SF '50,000 $184,425 25,000 $92,213 25,000 $92,213 100,000 $3681850 Number of Office 'Square Feet 1.00,000 175,000 175,000 450,000 Net Benefit at $3.31 /SF $308,160 $539,280 $539,280 $1,386,720 Total Off -site Benefit $660,050 $76,6;45,0 $733,950 $2,160,460 Source: S. Patz & Associates, Inc. Source: S. Patz &:Associates, lnc. Table A -8. Total On' -site and Off -site Net- Fscal:Benefiis by' Phase, Heritage Commons at Buildout (con stant$2014) 4st'5 vrs 2nd 5 Yrs 3rd.5 Yrs Total Apartments $125,720 $'125,720 $125,720 $377,180 Townhouses $36,580 $18,290 $54,870 Commercial $453,450 $226,730 $226,730 $906,900 Office: $498,140 $871,740 $871,740 $2,241 ,620 Total`NetBenefit- $1,113,900 $1,242;470 $1,224,180 $3,5801570 0 Source: S. Patz &:Associates, lnc.