HomeMy WebLinkAbout02-14 Comments (2)S. Patz and Associates; Inc.
46175.Westlake Drive, S'uite.400
Potomac Falls, Virginia 20165
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S. 'PATZ. & A S'S O.GI AT. ES, I'NC
o .R E A L E S TAT E CO N S U L "TA N1 S°
November 3, 2014 ,
Mr. Bruce A. Griffin
Mr. Matt Milstead
C/o Frederick- County Center, ;LLC
140 North Hatcher Av enue
Purcellville, Virginia 20]:32
.Dear Mr. Griffin and Mr. Millstead!-
This will,subnui our`correcfed report for the market and fiscal impacts analyses
'of the proposed Heritage Commons mixed -use development., We were provided input
from: Ms. Ellen .Murphy, Commissioner of Revenue for Frederick County, Virginia,
related to our evaluation of the personal property tax analysis used, in our report. This is
the only substitute 'change required. for our analysis. Ms. Murphy provided other
comments related to ,ouri= report,, which are included in the analysis, but these do not
affect the report conclusions:
I
With the' suggested changes to the personal .property tax calculation from Ms.
Murphy., our net fiscal analysis, 'shown below, generates nearly $3.2 million in net
`benefits to Frederick County, :at`project build -out. The suggested changes resulted in a
reduction of $407;000�'in net-benefits to the Couiity; as' a- xesult.,of the -full build -out of
Heritage; Commons
The chart below :sdmrnarizes the net fiscal benefits at .build out. These benefits
include both on -site and off stenet revenues. We show the.fiscal impacts analysis over
a 1.5-year build ,out period, separated by five -year development periods, to show the net
benefit if full project development does not occur.
Table, A -8.
Total On -site and Off -site NefFiscal Benefits by Phase,. Heritage
Commons at Buildout.(constant$2014)
1"st' S' yrs
2nd 5 Yrs
'3rd 5 Yrs
Total
Apartments,
$22,2,10
$22,210
$22,210,
$66,640
Townhouses
$1,460
$730
$2,190
Commercial
$_453,455
$226,723
$2261,723
$906,900
Office
Y S488,4420'
854 7,30 '
$854,7, 30
$2,197;880
Total Net .Benefif
,; $965,550
$1" L04,390
$:1;,1.03,660
$3,173,61,0
46175 West ILike Driv.e • Suite= n00m•'Pot6hmc Falls, Virginia 20165 • 703.421:310,'1 • 703.421.8109 his • spaczec @comeast: net
2
'Mr.;Bruce A. Griffin
Mr—Matt Milstea'd
November 3, 2014
The. development program for Heritage Commons is fully described in the body
of tiie attached re port. We included uded a detailed site, analysis .and project setting, which
shows the prime location,of Heritage Commons 'near the Route, .50 and I -81 interchange
and within the right- of=w'ay, of a new bridge over I 781 which will connect to U.S. Route
522, the frontage:road for Heritage Commons.
The market analysis section. evaluates each of the,four land uses under study for
Heritage. actors such as the proposed bridge over I-
81, thee'proposed snewlcCounty. Administration 'Building plat -med for the Heritage.
Commons si'te, and the expected large expansion of FBI ernployment.
We do understand that the. timing of these proposals/- projects 'can change from.
current plans, but all are; currently committed /annoui'ced. Changes to construction
timing of'these projects will' not change the overall at build' out" net'benefit analysis.
Of - special note is 'the value of the location 'of' the new County Administration
Building at Heritage, Commons. This public investment :will "be one key anchor for the
entire °project and a catMyst.for the'$3.2 million annual. net project benefit for the County.
We used conservative ` numbers in our analysis. A.11. are ;shown in constant 2014
dollars. The detailed market; and economic data that support our conclusions are
presented in, the, attached report. Our methodology for the .F.IA calculation is fully
described. If -additional data or clarification are needed, please do not Hesitate to contact
us.
We remain available to continue to assist you with .the:successful development:of`
Heritage. Commons.,,Tl e appendix to this report presents our'evaluauon of the County's
proposed Development Iinpac_t- Model.
Sincerely,
I; Stuart M. Patz.
President
3
r TABL9 OF CONTENTS
u,
a�.
1
PACE
::Introduction :... ................... .... .......... ...........
.... .. 5
;.
S it e Description aria.Developmen'tPropgsa ... ... ...,
• °, , _.y
'8
Site Description .:.
8
' Heritage Commons: Development Plan ......
19
EastTevis'Street /Freedom Plaza Badge...
22'
Secti`on.l Market_flrialysis .. ��.,. :: •; -
.....24
Demographic Ana'lysiS..:.r I
............ 24
Household Trends .........
25
Renter ^Households ... :,, . ............. .............................26
Higher- lricome Renter Households• .......... ........ ..... .....................
.:....,;:.:::26
Owner Households ..
27
Base Economic Trends ...... ......... ......... ......... ...............
............................
27
Apattnieiit Market Analysis ;::................................ . .. .:.. ��
::..._
....::30
CompetihiveGApartinent4Market ::: ............... ........ ...
..... 31
.....
. ,.
Pipeline:_ Proposals .::.. ::............................ :::..: _ .. :..
:,..,...,::.33 .
ConcluSlons .... .......:................. :.: "
4
Towel omesa : ............ : x.. ..._...
37'
Office;Spacey ;::.. ....:. .: :........ . ........ .....e :..
.......................... 39
RetailSpace : ,_ .:... ... ..................... ..:.: • .. .........
......
Market:SiuduConclusion ............... ................................ •. :.;!:........ ..... ................!..............
......43
Section Il Fiscal and' Ecoriornic,. [nmpacts Analysis, .::......... ..........:.: ... , :.;:..
.....................45
Summary of Fiscal . .
Im aets . . !, . :•: :
45
! On- Site'linpacts Tax Revenz ues ............ ............ •.......:` .... .,......1.............
,....47
Real Property Taz: .... ...........•......... :.••.
47
;::l�
perty Taxes... ..:.. .......... :......... . '..:...........
Personal Pro
....
....... 49
_ •
Retail'Sale's Tax ..... ....... :,., ,.... .; ...:..........i.............. . _..... .. _
.......................... 52
':Business;L•icens'e Taxes:.:,:. :., : ..... .............................:
...::.. 53
r Utibty'Taxes ,.: ..........................
C.onsuine +'
f ' Meals Tax. ....................................... .......................
55
- Motor Vehicle Licenses . . . . . . , ..............
::............:56
sf
IRecord'ation Tax ... ..
_...
,Summary. On; Site lax Revenues• ..... ... .. ... .
......................... `57
Ca sts to the Cowity .... t ...........
County. B,udget',- Revenues: _ ..::.: ... ..
.... 67.
' County ......: ...... .... ! . ........
... ..61
'Budgttxpendi
Per CapitaCjunty'
62
On -Site Costs�6 the ,&u : •..'
63
Net Fiscal °Impact, �'. .
.67
F
Off-Site Impacts :Economic,ancl Fiscal .....: ........
..•
Business Receipts:: .... 4 . ...,..
.......
Employment and Eariihio .......' ............. ................ ..................................
....... 70.
Off Site FiscAlmpacts...:.. .... i _ •• •...••
70
Summary of On =Site and: ......:
.•. :......•: ,71
Phasing of Heritage Coritmons :.... ... ............................... . ............. .. ...........
.......
Appendix A Review of Development Impacts Model .............
75
APPendix B Tables.
pp .........
.... ..... 7
4 ��
Introduction
The following is the market study and Fiscal Impacts Analysis (FIA), prepared -in
August, 201'4, in support of the proposed mixed -use .developineizt of the 150.6 -acre
Heritage Commons developmentrproposal (formerly Russell 150; LLC) .located along the
west .side of Froi-it ;Royal. Pike (U.S. Route 522), south of the 1- 81 /U.S. Route 50
interchange and opposite Airport Road. The site extends approximately 1,250 feet
along Route '522 and has frontage (1;300 feet) on the east side of.I -81 „at a location where
P P
a new over ass is `lamed that w ill extend Fast Tevis Street in the- City of Winchester
east into the Her itage: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 i' support of the mixed -use development proposal' for Heritage
Commons. T.he, market analysis demonstrates that < market support for the Heritage
Commons proposal exists _and. is based on evolving market trends,in a market area that
consists of the City of Wiriehester and Frederick County. The' expected development
period for this 150± acre property, based on the development proposal and market
trends, -is approximately 1'5 years', from, the - projectted start of building development in
2015 or 201.6.
The second section of the:.report is the Fiscal Im- pa'cts 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,r the fact that ithe development
pro osal has considerable id commercial ommercial space planned within the 40± acres of
commercially zoned area, or 30.0% of the total developable acreage, Heritage Commons
will generate a positive FIA and will provide considerable new net tax revenue to
Frederick County over the 20T5 to 2030 period and beyond.
{
The`FIA is prepared- in three five -year development phases to illustrate that net
revenues wi''ill accrue 'to ,the County during the entire 15+ year development period. All
.revenue and expense data are presented in constant 2014 dollar values. The phasing of
5
new development 'is .based, in part; 'on the sponsora ^`existing commitments for site
development. at -the time of. the ,start of development; acid in',part, oil, the evolving
development.trends within the market area as calculated'by the market. analysis.
`The following chart sumnfarizes the overall development- plan for Heritage
Commons. It shows a, master plan for 1,200: housing units oil 75.3 acres of residential
9 p.
-zoned lalzd and 700;O,Q0 s uare feet of commercial develo mein, including a proposed
new Frederick County office building. The planned development program will be more
fully expanded upon in the followinganalysis.
The site setting :map .of ;the 'Heritage Commons sife °sis shown next. The site is
adjaeeint to. the City of 'Winchester along I -81 and located 'just over one mile south o'f the
Route 50./17 interchange with I- Shear the Shenandoah University Campus. Number 5
on the.map shows the location 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 Uniyersity.Cariipus is shown by Number 7. The site frontage runs north.
from just south of Buffalo Lick. Run (No. 8) to the sniall� residential subdivision along
,Front Royal Av,erue on..the north. .
Map A also; shows the sfte',s close proximity to several of the, Winchester area's
regional highway's The Winchester Regional Airport, Shenandoah University Campus,
historic downtown Winchester and Apple. Blossom Mall. (Number 9) are all within close
prozifnity to the site., The new bridge over 1-81., along with the, extension of East Tevis
6
Housing Units; and
Sguare1ootage of'.
Commercial SWce' .
• Mark et. Rate Apartme.nts
1,0SQ
• For- Sale, Town homes
150
Total residential
j 1,200'
a Office Space , excluding County Bldg.
450 000'
11, 5,0,000
• County O,,ffice,Buildidg,
•'Retail & Service Corn'f iercial
1,00;000 '
Total Commercial,
100;000,
The site setting :map .of ;the 'Heritage Commons sife °sis shown next. The site is
adjaeeint to. the City of 'Winchester along I -81 and located 'just over one mile south o'f the
Route 50./17 interchange with I- Shear the Shenandoah University Campus. Number 5
on the.map shows the location 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 Uniyersity.Cariipus is shown by Number 7. The site frontage runs north.
from just south of Buffalo Lick. Run (No. 8) to the sniall� residential subdivision along
,Front Royal Av,erue on..the north. .
Map A also; shows the sfte',s close proximity to several of the, Winchester area's
regional highway's The Winchester Regional Airport, Shenandoah University Campus,
historic downtown Winchester and Apple. Blossom Mall. (Number 9) are all within close
prozifnity to the site., The new bridge over 1-81., along with the, extension of East Tevis
6
y,
y
Street, will: " rou�ele direct-,access to. the Pleasant Valle Road,
' � corridor 'and to_ Jubal Early
Drive, both area roadways with an abundance of "retail spacep medical office .space and
employment, centers. .
. Commons Site Location Map YI a A:= Herta e
7 II
Site Description and Development Proposal
Site' Description
The, Heritage Commons site is a slightly rolling, irregularly shaped, 150 -acre:
property tate 81 on the west and Front Roy'a'l Pike (U.S. 522) on
located between Inters
the, east at °a location,directly across from the entrance to Airport Road. The property is
vacant and partially covered' with small frees and bushes, . but the property is
predominantly stream runs through the property
redominantl meadowland, Part of the Buffalo Rwi str
in an east -west :direction and, will be'retained as open space 'and an amenity featuere for
the development.
Following are photos of;.the-,site and it's setting along U.S'. Route 522. The'photos
show views -into the properfy'f- 'U.S. Route 522 West,�into the ;sde 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„fgr new ;development, as described below.
i
View -Into Site Showing Topography and Tree Coverage
8
1
1
Photos of Heritage Commons & Route' 522 Corridor
� 1 a
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View West From,U.S_.'Route 522
Expanded View of Site,
-fir r
View South From U.S. Route
View North Along U.S. Route 522 522/Airport Road Intersection
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
Pike, aremature single-family homes'in the Miller Heights subdivision.
Land south-of the Heritage Commons site is,lar:gely vacant, but,w, ith the adjacent,
parcel of 513 acres- � "for a mixed -use development with a mix of towns and
9
Aerial of Heritage Commons
The Heritage Commons site is presently only accessible via Front Royal Pike
(Route 522). -Route 522'_Js a regional .arterial that; "runs: north -;south from the Frederick
County line, into;ahe City of Winchester and then north ,somewhat circulating into cutest .
Virginia. Relevant. for'the Heritage Commons proposal, is its'inierchange with Route 50
and' close proximity to, thetRoute 5O'/ 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; Millwood ,Pike (U'.S. Route'; 68)'; about one mile north, which accesses
Interstate'81'5• Exit 313 ari`d',the City of Winchester: Roue 522,a1so provides'direct access
to a;150,Q00± square foot Wal'riiar116cated south -at its intersection with Tasker Road'that
o e.ned in earl. =2012, ,About 300 fullAime`employee s work atthe r
p y etailer, which includes;
a`full.,grocery store „gard:en center and•pharmacy.
im
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Heritage Commons Site Setting
Adjacent to the Walmart are two small industrial•.par-ks;' Eastgat'e Industrial Park
and Jouan Global Center,, which collectively include four tenants. The largest tenants in
' � p e FBI Records Management- Division, . which occupies 160,300±
the industrial ' ark'are th
square feet at 170 Marcel,,'Drive,'and Home Depot' Distribution Center, which occupies
755,860± ;square feet of space at 201 R'ainville Road. Tenants in" these parks are detailed
in the. table below
Developments'at Easts!afe.lndustrial Park,and
Jouan Global.Center
IndusfrialA4rk
Building Size
Years
Tenant .
(SU I t)
Built
Easteate dndustri'alPark
'I95 Rainv Ile-Rd
20,453
2003
Comcast Cable Communications
201 Ramville Rd-
'29M5
20013
Home'Depoi,Distribution Center
(SaU'rrAa7)'.
(776.308)
JouanrGlobal Center
141, Ivlarcel`Dr.
, 70,0. 00
1998
SpecialMAd Good's & Services
FBI Records Management
170 Marcel Dc
106,296
1.997
Division
( btotal)
j7( 6.296)
The. riext importan't.developmernt area near Heritage.Commons is; located along
and off of Airport Road, irrimediately east of the site. Developments; along Airport Road,
which include ;residential, office, and industriaf uses; are detailed in the paragraphs
below.
Preston Place'. East of the single- family Homes that _front Front Royal Pike is
Preston Place,- a'236"F zi it.'affordable apartment' complex h. avw:as' built i'n three
phases' under, the. federal' LIHTC program during the 1992 . to 1.997 period.. This
property is, typically, fully occupied and was recently renovated.
Winchester :Regional Airport, a public .use. airport owned by the Winchester
Regional,Airport Authority:, is located along this roadway. The- airport.covers 375 .
acres and has one asphalt paved runway. ,Approximately 45 people work at the
'airport. „
Airport .Bus'iness` Park; is located across the street `frorr the Winchester Regional
A rport "alorig ''Airport. Road. The park consists of` a 'total of nine `structures on
�Aviatibn' Drive; ;Airport 'Road, Admiral_ 'Byrd Drive and Muskoka 'Court.,
Collectively, development in this park contains 724,760± square feet of office!and
-industria- L§pace, on 1.1,0± acres, though much of this space is flex space 'with office
and industrial ,use.,
The, largest tenant in the industrial park is. Kohl's, which operates a 422;660±
,square foot: distrib.uti'on center that opened. on a 64.27 -acre parcel, in 1997 and
ernploy! ':. 0± people. M.I.C. Industries, a company that manufactures machines
that build steel buildings, operates its International Manufacturing Facility in a
150,0001 square foot facility at390 Airport Road. The compan.y.opened with 100
employees and added` art additional 139 employees in, 2064
12
The ,most'rece_n't building to open in the-,industrial park is a 17;340 ±:square foot
structure at 170,,.Muskoka Court, a. service center operated. by Aueritt Express, a '
provider of freight-transportation and supply chain management.
'iNesMeW Business Centre is located east of the Winchester' Regional Airport
along Millwood Pike'sz intersections with Arbor Court ,and Victory, Lane. This
industrial park consists of 27 structures. Collectively, Westview Business Centre
includes 802,310± square 'feet of space. The average structure size in this
industrial park is 29,720± square feet.
Several tenants.i1m Westview Business Centre are not industrial in nature such as
Valley'Cy.cl'e Center a'nd Grove's Winchester Harley - 'Davidson,, two auto dealers
that occupy, over 5,MOQ square feet in the park. The largeststructure in the park
is a'100,000± square foot warehouse owned by Virginia Storage Services. Larger
tenants' i'n.the park include'
Blue Ridge Industries is -a Winchester- based. company that specialize in
manufacturing custom injecting molding. Blue, Ridge Industries employs
60± people. .
Annandale Millwork and Allied Systems Cor.poration,is a Winchester-
based, manufacturer' of wall panels,- hand rails and stairs. The company
employs`r100± people on 40,000 square foot'facility.
Cl'ariant Corporation; a 30- employee chemical merchant wholesaler,
occupies 30,000,square` feet,
Winchester 'Woodw. orking Corporation,, a manufacturer of custom
millwork, employs' 30 people and occupies,56,920square feet.
.Probuild; a,manufacturer of wall panels, roof and floor trusses, employs
rover 100 people�and occupies 28,320 square feet.
Creative Urethanes; a manufacturer of castable and •reaction injecting
iiiolding and stamping, employs 30 people and occupies 30,000 square
feet.
A PrOMWn 'Service _Corp.., a 15- employee Winchester -based landscaping
•,company that occupies 12,150 square feet.
13
Action Concrete Supplies, "a 15- employee material merchant wholesaler
that occupies 24,000 square feet..
Navy. Federal Credit Union, which operates in a 109,300 square foot
Office structure on �S'ecurity Drive, where it employees 900± people:.
These :area 'industrial and manufacturing firms employ ,approximately 3,000
people and represent a ready riarket for new 'retail space at Heritage Commons.
There are also five modest "sized office buildings along Airport Road with a total
of nearly 70;000 square feet. These likely have 150+ employees.
The paragraphs to follow describe the developments .north of Heritage.
Commons along Front..Royal Pike and Millwood Pike, east of Interstate 81. Included in
this area ;are structures occupied by, FedEx Freight and Wilson Trucking. Corporation,
among others. This area consists primarily of hotels, 'retailers, •and. offices. There are
older facilities but, in addition to the 3,000± employees at the industrial and office
buildings along Airport Road, another 1;500± ;employees are located here in the
following businesses.
v Costco Warehouse. The Costco store is 129;220± square. feet with 200± employee.
➢ Deico . Plaza, js a 162,630+ .square foot retail center with, a 52,690± square foot
Gabriel Brothers, a 29,000± square foot Food Lion, a 24,4801 square foot Room
Store and a 14;400 ± - 'square bo't Body Renew.
Horizon DevelopmerWShopping, Center has a 34;150 ±, square foot Big Lots Store
and a 13,440 + .square foot Jo -Anne Fabrics & Crafts.
➢ :.Restaurants in this area include: Cracker Barrel, IHOP, Texas Steakhouse &
Saloon, Hibachi:G''rill &`Supreme Buffet,'Golden Coral, Blue Fox, Billiards Bar and
Gri'll•WaffleHouse, Subway and Los Toltecos Mexican Restaurant:
➢. 'Gas Siations•in this.area include:'Citgo, Exxon, Shell and BP..
- 'Office.' The newest office developments built in this area were const'ructed.in.,the
`late =198& and account. or 73,100± square feet. The offices of 'the Middle'.East
.District; U S. ArmyFCorps of Engineers, has 6.00± people employed`,here.
,Hotels. Eight,hotels consisting:of a. total of 808 rooms are "located within this area.
Four were' built during the 1980s, none were built in the 1990s and four were
El
•
The .above retailers, consist of a mix of the large enclosed Appl& Blossom `Mall,
several retail.strip centers (Winchester Commons, Winchester Station'; Apple Blossom
'Corners), and several', large free = standing retailers such �as K -Mart, Wa1- Mart;, Lowe's,
',and Best;Buy. Major retailers in this area are listed`in'.the chartbelow.
~• "i}t'�UurTP
S:- Pleasant Vall "eV Road
....3_:.`.tif..c' !'+•_:Ty
R��.i 1
"q}
-, v'+F,�
Apple Blossom Corners
,r;rJ.x9
�"
,+rr�..
'�C
ZA`V �'^W �
•-
Delco Plaza, .
1,62;630, '
'�
i-
Free.Sianding.
Rti1 .P
7 u1sq'��y
1
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t
+� i"�ryr��
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The .above retailers, consist of a mix of the large enclosed Appl& Blossom `Mall,
several retail.strip centers (Winchester Commons, Winchester Station'; Apple Blossom
'Corners), and several', large free = standing retailers such �as K -Mart, Wa1- Mart;, Lowe's,
',and Best;Buy. Major retailers in this area are listed`in'.the chartbelow.
y .
'Shenandoah UniVersifV. The only uniYersity in Winchester- Frodehck County, is
Shenandoah University, located, approximately' two miles •;north of the Heritage
Commons site.`Thes'4unr ersity currently employs 238 full4ime and T.$9. -part. time
16
Retailers Alone
S:- Pleasant Vall "eV Road
Name
Size
Anchors:
Apple Blossom Corners
240;560
Martm.';s, Office Max „Kohl "s; Book's -A- Million '
Apple Blos_som.Mall
440.600,."
Belk,•JCPenney Sears
Delco Plaza, .
1,62;630, '
Gabriel Brothers, Food Lion,'.Rooiri Store;.- Body,Renew
Free.Sianding.
-...
1C -Mart, Lowe' s, Walmart, Best Buy':'
Pleasant Valley Marketplace „
120000,
'Staples; Dollar Tree.
W,inchesteriCommons
173,790
Target, T.J.'Maxx, PetSmart,'Home Depot, Pier I lr ports,
Winchgkt r,'Station,'; .
167,000
hh regg,.Ress, Bed;Bath & Beyond,,Michaels, Old Navy__
Source. S'. Paiz & Associdi' s field survey
y .
'Shenandoah UniVersifV. The only uniYersity in Winchester- Frodehck County, is
Shenandoah University, located, approximately' two miles •;north of the Heritage
Commons site.`Thes'4unr ersity currently employs 238 full4ime and T.$9. -part. time
16
i
employees for a total, of 427 emlloyees'. Enrollment, trends are: presented in the table
below and' a, Fall, 20.13 enrollment of 4,003, students; of which 53.7% are
undetgrad'uate _students; 'and'' 46.3% are either. graduate or professional students.
Enrollment dropped by, 173. iil the Fall, 2013 semester, driven largely by a 252 - student
decline in undergraduate-enrollment. Graduate, and professional enrollment grew
during this period. '
Table 1: Fall Headcount Enrollment,aShenandoah University„
-
''Fall 2003 — Fall 2013
Unndeegiaduate
Graduate
Professional
Total
'2003
1,4'15
1,030
406'
2,85.1
.2004
1;538
1,04'1
421
3 7000,
2005,
1 -;606
968
424
2;998
2006
,1;527
1,;175
408'
3,110
2007
1,658
1,295
440
37393
2008 "
1',720'
1,371
420
37511'
2009:.,
1,;767
11418,
4.34
3;619
2010
1,882'
1,330
467 •
3,679
20 t1.
2,,290
1.,3b 1
4.61
4;052
2012'
1,402
1,280
494
4,176
201.3;
2,156
1;320'
533'
4;003
Chan e
735
290
127
1,152
Source. S•tato_ouncil,of Higher ucation of ,irgin a
ht terms of projected enrollment, Shenandoah University officials anticipate
enrollment to, remain esseritiall
y flat. until at least 2019- The University's official
enrollment :projection.for2019:is,3,919 students, slightly below the current number.
i
Shenandoah University currently has 840 on- campus dorm beds for
undergraduates, which,are typically fully, occupied, with the remaining non- commuting
undergraduate and[ - graduate' students: residing in off-campus, non' - institutional .
supported' housing, .No' exclu'siv -e 'graduate housing is provided at the University.
Seventy,s,x pereert of a11;First Year students (including transfer students) have lived on
campus. in recent years:
Shenandoah University has early plans to increase their on- campus bed count
from -840 to •a; target' of 1,300 beds, which would ;allow the. University to increase
17
enrollment: New construction in a phased - approach °'i's plaivled .to achieve this goal.
With,tlie net gain of beds, several existing, residence Balls will be.phased out while the
115- bed.Parker Residence Hill will be remodeled, for firstyear students and reduced to
95" beds.'-
Due to planned expansion at the university,, the existing., 840.beds could increase
'to 950 beds by 2017, 1,190 beds by 2022 and 1,310 beds by 2027. This expansion plan
could be speculative, but will clearly be set in place well after Heritage Commons is
started and the; addition. ;of' oil- campus beds will be modest iii, ,the early stages of
expansion. Data indicates• that about 3,40.0± university students currently live off.-
,p ,
campus, primarily.iiZ priyate. E partrri rhts with some students'. living, at -their family home.
i
Data indicates; that about 3,400± university students .eu- rrently live off - campus,
primarily,. in private ;apartments with some students living, at ,their .family home. Even
with the''planned expansion bf on- campus beds to' 1,300± there' will be :at least 3,000±
students ,living, off - campus, not '_including any,.increases in enrollment. The presence. of
these students creates'-,a strong,market for apartments at nearby locations'
Summary.' The above analysis has a three -fold purpose,.. First, and foremost is to
identify the.,site location and determine whether the setting is,marketable for the types of
land,`uses proposed.; The site,"has excellent highway access, proximity to employmen t .
centers and.-commercial facilities and no nearby blighting land uses., It is an ideal
location for students and staff from Shenandoah University.
Secpnd, Heritage Commons is planned to have 100 ;000± square .feet of retail
r
space at build out! The 4,500± employees working in the immediate area;, along Airport
Roa&and.- Millwood Avenue, and 2,500± new employees in office and ,retail space to be
built, on sife; represent;:a ready market for new retailtenants.
The third .iss'ue.',is to establish that, along with the new ,County' office building
that: is phnned for the site, this .location will be, competitive for new office .space
18
development: The. data presented above shows that between office space and flex
industrial space, tlaeRoute 522 /Airport Road,corridor,,have an abundance of office and
flex space; albeit pi rmar ly mature. space. As of the date of ou'r study, the County office
building, is planned for the Heri #age Commons site, however, a final decision has not
been made.
Heritage °Commons Development'Plan
The proposed iGeneralized Development Plan ;(GDP), -for ;Heri:tage 'Cormnons is
presented below. It shows four commercial land',bays with'a- total`of'44 ±,acres. These
are located on the north.side of the' property. Two have frontage along Front Royal Pike
and two have frontage On the new bridge that is,plaruaed for;a,1 -81. crossing. The new
150;000 square foot County Administration Building could. be -located' in Land Bay IV at
the, c_'orner of Freedom ,Plaza and Front Royal Drive.. Some changes 'may be made on
land use locations but the proposed level of development is set.
The County 'Ad ninistriA on Building is proposed to relocate to Heritage
Commons,',The .relocation. is not finalized. However, our'research showed a likelihood
for the relocation, ,aiid a tremendous economic benefit to the County with the -,building
relocation as °an. "anchor`' tenant for Heritage Commons. Thus';, our analysis is based on
the new :County Admini' anon Building being on site. The alternative' is an expanded
amount of retail space.
The residential area consists of two large and one small wand bays' with about 94.
acres. 'TheseJand bays are designated for apartment unit development arid' townhome
j,
development; as shown on page 3 above.
The GDP 'has T2.35 acres set aside for open space as part of an internal site t'rai'l
system. The, Tie o p ens p ae area includes the attractive. Buf falo Lick Run Stream Valley.'
There ar'e , 23 42 acres ,of' road network planned within, the'1'50- acre.. property, including.
the .traffic circle that connects Freedom Plaza Boulevard; Warrior Drive and Center
Boulevard.
I NOTE: Landbay'Br6bk8oWwis'
X,
P
incor orated herein by reference
. . . . . .
01
fl
ZZ,
"Y'
h
WI
V
J,
.6
j ti
11
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M
The 'GDP isi prepared in a general format, at this time, as .the site requires
rezorurT.wAh Frederick County 'staff input to the. plah. A more detailed development
r e planning process progresses. However, at this time, 1,050
plan will be �p epar6d ag', th I`
market fate, upscale apartment units are planned and these will likely be built in several
-c
'Phases of'156.'uniits; per phase. This; of Quise, can change based on market'trends, but a
phased developME is.likely-
-be iownhoffies are to be priced at approximately $240,000 when reported in
'
constant,MA'dollars. This price,excludes any "add-ons" b as e price. These- homes to the
`will, also'%e built- in phases, with an expectation of 30± home sales. 1per .year, with, the
devjloprifeni pace dependent on the expected sales pace.
20
Site ,development. could start by Spring, 2015: with the development of the access
road. The Coun_tyI office building could be started at that time, or prior, pending final
approval. The .new , bridge over I -81 is also expected to be started by .early -2015; with
completion scheduled, for Summer, 2016. Construction timing. of the bridge could
change.
As noted above „Fred'erick County officials have selected the'Heritage Commons
property for the 16caJfion of a new County administration building, which will be
relocated from downtown Winchester.,
The- County's current 65,000+ square foot office building. at'1'07 No. Kent
Street and other County occupied buildings contain approximately
100,000 square ,feet., The new building at Heritage; Commons will have
150,000 square feet and may include employees of- the County's School
Board.. In total, at least 300 people are expected to work ,at the building.
Project opening_ is 'likely in 2015/16. Following' is the conceptual
rendering for the building with an exterior that--is, designed to resemble a
historic °textile; mill:.
a
County Office Building Elevation
With the County "office building on site, the sponsors of Heritage'Coinmons have
committed to construct an adjacent .70,000± square foot office building to house offices
21
for,.companies thi t do,biisiness witli "County government 'staff. This buildingis planned
to be built'at thesame time rame�as, the, County office building.
These two :buildings w;ill,faccount for 220,000'square feet.of, the:propo.sed 600,000
square foot office',':-space: The remaining 380,000 square feet' will be built over" the
followin ''15± years, at .a likely rate of 25,000 square feet per year• o_n' average, based on
market trends,,as pgeserifed ui•.the paragraphs °wliicl follow:.
Hritage. Commons will also:.have 100,000± square; feet of retail space. A# this
time; the,,'l Ieritage, Commons - sporisor has verbal'com,mitments for at least 30.,_ square
feet, including:
.A convenience c enter
:•,
y Two restaurants'
Barik i
Cli'ild daycare,center
to, b'e ex a
' '' • .feet by project opening.
nded to at least 50,000 s uare
it Commerciy p q
This
total is hk�l
Reta'. / _ al space includesa`wde range. of uses .for both residential consumers
And area businesses.
Thus, at,:proec_t opening, Heritage Commons is likely,' to,have:" A-
3_ y 150± apartrhont uri ts. available; for lease _
➢ 30 ±'towriliomes for sale
" ➢' ' 220,00,0 +_,sgiiare'feet of office space built
50 000';'square:.feet of retail. space within `a. small - center, 'on pad sites or as
ground' floonspace within office bu=ildings
The e
imaii ing portions!.ofthe ; developmerit'.will - be ,built over 'time, as described ui4he
market analysis for, each -nand use.
East "Tevis Street/Freedom Plaza Bridge. 'In addihoii to the new County office
building on site; Wine liester City officials and Frederick County officials ,have approved
the ,constru
ction of the,-East Tevis, Street' extension, through the .Glaize Rroper,ty ir5
t 22 -
,a.
'Winchester east and on to the'Heritage Commons property via a new bridge over I -81,
as shown :in the .aerial to. follow.. The road alignment through the Heritage Commons
property is'als. noted. 'Current`plans are for the roadway.improvements to be started in,
early. -2015 and be completed`in,•ni d'- 2016. No timing changes,haVe.been announced.
The Glaize Property is a proposed commercial site that will likely be developed
with new retail space in time. The original site proposal for ,the Glaize Property` was, a
project named The,Shoppes at ..Tevis; but this is no longer active. The connection of•the
bridge. to East Tevis Street,at Legge; Boulevard provides a directconnection to the Apple
Blossom Mall area 'and the adjacent retail centers, along Legge ;Boulevard and Pleasant
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 through Heritage Commons and could be extended past the site
to Front Royal :Pike near. Patsy .Cline Boulevard ,as part of, this project, but that section is
riot part of the bridge, funding.
This`will be a major roadway improvement for the Heritage Commons site and is
likely to be greatly used,:in time due'to the plarmed replacement4the'1 -81 bridge at Exit
313 at the .Route 50/522 interchange, as the current bridge; re'quire's .replacement. This
construction project,could take 10 years before• construction begins'..
Alignment of EastTevis Street Extension and,New I- 81..Overpass
23
Section I, Market Analysis
This. section, of the report, is: a summary market analysis in support of the four
land uses ,,proposed., for Heritage Commons, including apartment unit development, for-
sale townh me sales, office space and retail space. The analysi's of each land use follows,
a demographic and economic analysis of the market area.:of Winchester and Frederick
County.
DeriiogrVhicAnalysi''s
{
Thie Census, total. po.pulation.count for •2010 for the two jurisdictions of the
market area is :a combined 1.04;510. The 2010 market area census is nearly 22,000 above
the. 2000 count, which is an •average net population growth ,of 2,000 per year. The
majority of he- rnarket.,.area population, and most of the growth over the past 30± years,,
has been in the County. The most recent (2013) population estimate for the two
Jurisdiction market�a'rea, is 108,540, or 4,000 above the 201.0 cens'u's count..
The popul'an6n`f6recast'of'118,800 by 2018 is based on a lower growth rate in the
market'area compared with the,2000' decade. The growth during; the 201°0 'to 2013 period '
has been slower due {,to the,past recession and the effects of expected continued modest
growth 'in 'the new,, home sales market. This trend ,is. reflected .in the American
Community ,,Survey (ACS) by the Census, which shows a 2012'population of 102,200 and
a 2010.,population oP108 540. However, jobs and employment are now in, &easing and
the FBI, in, particular;, ' expe,'cted to bring.in 1,200. employees to the .market area by 2016.
While that .is' not !a "hard' acid 'fast'', date, many of the new employees are likely to .move
to `the marke# area by1201 +8. The FBI already has staff•in the County.
We used a four =year, projection period, as that is likely the maximum period' for a
comfort level in forecasting. for real estate development. The first phase'oP.devel'opment
at Heritage Commons will .occur .during this period. Thus, for .housing,, in particular,
current trends are used for the post -2018 tme.frame.
1
r
f
i
j
Additionally, ahe comparison between at- place' jobs and ern l'oyment is modest
L i
in terms : of'out - commuting: The past higher gas,,priceshave been- a deterrent for market,
area workers to commute to Northern Virginia. This would change. All `of these factors
were;taken'into accoun"Hor "our forecast population of 118,800 by 2018.
`fable 2:. Trends 'and Projections of Population.and =Households by
Tenure and Income,
Heritage Commons, VrA.%rket Area,
1990- 2018:(ConstanC2013
Dollars)
1990
2000
2010,
2018
Market Area Population,
67,670
82,790
1'04,510
118,800
Winchester'Cityl'
21,950
23;590
?6,200
--
Frederick County .
45',720
59,210
18,310
-
Group' Q'uarteisPopulation
1,220
1,570'
1,940
2,100
Household opulation
'66,450
81,220
102;570
11'6,700
Persons Pei' Household'•
2.60
2.53'
2 "60
2.53
Households
25;550
32,100
3'9,470
46,130
'Percent Renters
32.9°Io
30.5%
30.20
30:7%
kenter Households
8',500
9,780
'11,940`
14,160
Renters Within,lncomeCategory1/
4 ;220
4,530
5,140
6,070
Percentf Within Income: Category- 1/
49.6%
46.4%
43.1%
42.9%
Note: ]/'Renter- households with incornes
exceeding
$40,000.
r'
Source- .:1990;'2000,and 26.1'0 US. Department
of Coninerce,Bureau of''tlie Census; and
S.
Patz and Associates, Inc.
Half of the. market areas Group Quarters population consists of'students in on
campus dorms at Shenandoah University., The other part of the. Group Quarters
population is persons in hospifals,'assisted living facilities andJi-istitutions. The growth
in Group Quarter's show n.in Table 1 is based on 'the new' dorm rooms expected to be
built by ShenandoahjUniversity by" 2018: The subtraction of Group Quarters population
from total population is Household Population, which are the basis .for the projection
new housing unit,demand.
Household Trends. In.2010,.the market. area had,39,470 households based,on the
census count. This total is 7,400± more than in 2000. A .key point in the growth of
household's 'is that the, average household size increased considerably during the 2000
decade from 2.53 to 2:60 in 2010. This is the result of persons doubling up during the
recession due. to''job •losses, and /or salary deductions. It is also the result 4 persons not
25
forming their own, household due to the overall economy: The increase in, the average
household size meant .that growth, in 2010 was below the level normally created by
population, growth,
For 201;8, 'a reversal of-the increase in the average household size is expected to
decrease to 2.53, the' same' rate °as in 2000. At this rate, households are expected to
increase to 46,130 by 2018, a net growth of nearly 6,700 households.
' Renter Households.. In 2010, the census count showed, that 30.2 percent of all
market area households were _renters. That' percentage would include Shenandoah
University students: who live off campus. The' percentage of renters in ;the market area
declined_ over the past 20± years. If'has continuously been below the state and national
averages. However, based on the data to be presented below`,on new` apartment unit
additions to the market area since 2010, and for the post-2013 period', a slight increase in
the percentage of renters is expected. The market; area is projected to have. 30.6 percent
renter -households by'2M8; or 14,110 renters.
Higher- Income Renter Households. We used $0, 000 as the minimum
1
household'income for. renters who can afford the rents at,.new apartment developments.
.Those rents are ;approximately $950 "to $1,000 net for a new, one- bedroom unit and $1,100
to $1;150 net for a two-
'bedroom with two full baths. At 30 %0 -of income allocated. to net
rent, a Household with an income of $40,000 can afford a net rent of approximately
$1,000. That is currently the market for new apartment units.
The,20_10 Census did not provide income,data. The ACS data, are not fully usable
related to,,householdi 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.'iri 2013` dollars,-:is, 'based on ,a calculation of:-trend .data from the
'1990 an&2000.census by the staff of SPA.,
26
j.
O.ur estirn'ates show that the market area has 5;100+ renters in the income
category under study in 2010 and that total is expected to expand to 6,070. renters by
2018. The-percentage of higher income renters is likely to continue to decline, due to the
expected increase in the for -sale home market, but the absolute totals are.expanding.
Overall, there has been, steady demographic growth in the• market area and that
trend should continue. There 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 new rental housing. In the paragraphs below, the
rental' household data- and trends will be compared with past apartment unite
development and active proposals to calculate net. apartment unit demand over the
forecast period.
Owner' Households. As of 2010, the market area had 15,000± owner households
with incomes, reported in constant 201.3 dollars, of $75,000 and above, That is the
income range 'identified ;as the,'target :market for new home sales .'in the market area,
including the type of for -sale housing proposed :at� Heritage Commons. By 2018, the
number of home owners with 'incomes of $75,000 and. above is? expected to increase by
1 3;500..
Base, Economic Trends. 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 a:t -place jobs are at or above the peak
year of 2008 and are likely to continue to expand with an improving national economy.
This trend is!'also true 'for employment, which differs from 'a't -place jobs ".'and
refers "to the number of..:market area residents. who are employed. Market- area
employrrient'is'increasing and unemployment is decreasing.
There are a few large developments in, the market.area that are expected to generate
net'popial`ation; ,employment,an'd'job growth, including:
27
Navy Federal ':Credit :Union, completed'- construction on a 56,000' square foot.
„
Building lI; of its existing Frederick County campu's on Secur�ty..Drive in August,
2013, where, 45,0; people will., be hired by 2018: ,5ince locating to the County in
2006, Navy Federal has; grown,from 60 to more,than'1;000 erriplcyees.,,Most of the
new.jobs are cust6iner support�positions with salaries'above $40A0.
Dormeo .Octaspring, a mattress manufacturer; .opened its 2nd U.S. 'facility at 259'
Brooke” Road in .tlie .Fort Collier Industrial' -Park : Twenty pe -ople are novV
'employed',fat the'58,000 square footfacility: The pl'ant'allows the'com'pany, part of
London -based Si id.io "1Vloderna' Group, to produce,,its foam coils in the United
States for the'first hire.
.!
Barrett 14la hine, a. metal fabrication company; anmounced in March, 2014'that it,
'
would expa�zd its Frederick County'facility , andMre 27.new'ernployees:
• s, a manufacturer of plastic bottles .and ,containers; amnounced in
M H . & Plastic
„
July, 2014.'that it would. add .45 riew jobs.
Evolve Stone, a `'manufactur.'er of, natural` the; ed''play,environments, announced'
in- March, 2013 thaf"it would' lire 46 people at its 15,000 square`.foot facility-in the
-
Stonewall Industrial Park `Operations in the new:'factory- began_in. May, 2013. ,
Creative Urethanes,.,man'ufacturer of casiable and reaction mject ng molding and
'
stampin g,, ai?no`unced. „in February, 2014 that ,it -would expand its Winchester
operation at Westyie,w,Business Centre by addin&54 new employees.
White Rouse Foods , an apple products processing” company, announced in
Mar ch ,;2014 that;it• would expai-id 'in Winchester by adding 3,1' new jobs.
loe's.Steakh'ouse6,Opened a new 11,000 squ'a're foot restaurant in Winchester in
June, 201,4 where `it employs, about 150 people.
S
'Henkel - Harris Co , a aiousehold furniture manufacturer, announced, in April,
,;2014 that•tlwoufcf hire 18,new employees at its Winchester location.
�
-
_ q , p
� Hood Way where it-
HP.:Hood operates a 375,080 +,s foot milk, -pant at• 160 H •
`uare
employs,1over 420 people: The company announced in May,, 2013 that it,would
expand 'the facility ;to increase ultra -high temperature , ,production capacity,
creating, 75 ,new,. jobs? , The Winchester plant` first' opened in 2001 with 170,
employees, an'd -has been steadily, growing since then. The 75 additional lobs`"will'
".
bring As .1 to 500 workers. The majority, of these new jobs will
'
be 'operating ;,positions, -from within the plarit, and will be' p:'ermane It hourly
PaCt1V 'Corporation 4-manufacturer of corru'gatedi containers,. announced in
November, 2013 tha'A would hire 25 new employees.
„
28'
Amherst _Med cal 'Office B'uild'ing: Construction on :tl is three -story Class 'B
office building began- in,early -2013 and was completed in mid - 2014. This'57,695
square footibulding is fully occupied with medical office tenants,
McKesson. Corp., a Health care services and information technology company,
completed a new distribution center in 2013 that ernploys 200 people. -The
company distributes medical and surgical supplies to phy5 -ician offices, surgery
cerfters,.long",term care facilities and home care businesses.
➢
The Shenandoah Valley Discovery Museum;opened in a iiew, 20;000 square foot
location hi mid 72014 at 19 W. Cork' Street.
L
`Chiick';E. -Cheese. o.pehed a new location in August, 2013 in Winchester where it
employs 50 people.
The FBI is ;currently.,plannirig on building a 256,430± square .foot facility in
Frederick County,• called the Records Management Facility. The facility will
consolidate •FBI's paper.'records and also provides storage for National Archives
^`
and Records Ad'ministration's (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
as many as 1;200 people; but the timeline has been delayed. Construction could
begin in 2017:' As always, thee is no certainty with this proposal, but our
research•shows a strong likelihood that it will occur-.
The Village:;af 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 II.exparision, which will include
additional 80 independent 1'iving apartments and 18 cottages, a 1`5,000 square
foot wellness:'center with an indoor swimming pool, the expansion of the dining
•
areas :,arid; an expansion of 10 suites to, the skilled nursing neighborhood of
Orchard Woods Health Center. Construction on the cottages. began in April,
2014, with an' expected completion date of spring• 2015: Construction on all •other
buildings ' wild commence' in late -2014, and should be coipleted by the end of
2016. I
•�
Winch' ter Marketplace. This 50,OQO square foot retail center, to be. located at
1523S. Pleasant Valley Road,, is currently, under construction. It is located across
South - Pleasant Valley Road from Sheetz and beside Kinart. Thee property would
include a 3,450 square` foot Roy Rogers restaurant. "Up to 180 permanent jobs
could'-be created at the new retail center. ;The site plan includes a 5;,700 square
foot` cor Tner6al 'pad site located behind the existing Jiffy ,Lube. Two, more
buildings are: included in the site •plans: an L- shaped building With wings
measuring 21000 and :12,000 square feet and another building measuring 8;141
square feet.
29
.Soieral small- 'developments are in planning within.. the Frederick County,
priinarily in ,and around ,the industrial parks. These iiiclude'a planned' 75,000
square foot building expansion by Greenbay Packaging at,285'Park 'Center Drive
And a 29,Q00, square foot warehouse expansion at 774 Smithfield, Avenue.
In total; these,new_ companies 'and local expansions will add approximately 2,600
new full -time employment, in addition to new construction jobs.. These totals will
increase on an aiuual basis`.
There have been four m.aj'or ,job loss arinouncements in Winchester- Fredrick
County- since 2013 that`accourted, for "the loss of 240± jobs. These ,are 'detailed below.
y Rub'be'rmaid announced iii December, 2013 that it would move °the headquarters
of its Rubbermaid Commercial Products division from Winchester to
Huniersville, MC. The'move will'relocate 65 jobs in ma rketing,'.finance, planning
and research,and development, but will not affect the.750,employees involved in
warehousing operations and distribution center.
the factory;
Vallq,14ealth announced in January; 2014 that it,cu't 33 positions as part of the
health systehi's; response Ito- national changes in health care; lrr addition to those
33 job cuts, four employees within the system experienced a reduction in hours
and 25 vacant positiq'ns•,were eliminated.
Chenega..liitegrated..S� stems, a security service provider, announced 'in May,
201'3 that it would reduce its Winchester employment base by 55 people by July;
2013.
s Kmart announced in Febr'u'ary, 2014 that it would close its 'store cn South
Pleasant Valley Avenue in Winchester, resultingin: the loss of 91 jobs.
Apartment. Market Analysis'
Follow,iiig, is a' summary - market analysis for new apartment unit development in,
the. "market area. For, this analysis, we studied the market for 150 -200 new units for
Pi nitial ro'ect'' developm, merit- at Heritage Commons. The study is for a new modern
apartment complex, with only one - and fwo- bedroom units. 'The forecast date for unit
.delivery is 2016/171 Current. market area net rents (2014 dollars) founew attractive units
at 'an. amenitized 'apartment 'complex' are $950 to $1,000 for .a one - bedroom: and. $1,100±
30
i
nettfor a two- bedroom with two full baths. We also assume ian apartment complex. with
a competitive` mix of onsiteI- amenities.
Within :these, parameters, market support-is analyzed, for renter households with
incomes,of $40;60N,and above. A $950 net rent will require' an.. income of $38,000 and
above, based, on '2014 dollars; Thus, to be soiitewhat' conservative, 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
demographic factory under study 'for new apartment unit. development is the magnitude
and growth' of renters with incomesf of $40 000 and above, Our�,analysis shows that the
market, area, had ap.' roxirrtately 5;100 renter households: with- incomes of $40,000+ in'
201`0; at, the timeof tl-e,Census;couni. By2018, this total is "exp.ec'ted "'to'increase to about
6,100, or a growth 'of' 900+ renters for the 2010 to .2018 period; -or 100+ households per
year on average:
. j
Competitivel Apartment, Market. The following:, table shows 'a 'list of existing
rental ;housing , uiits that would be competitive; or somewhat _competi tive, with 'new
i
units at Heritage Commons, once built: While most marketplaces throughout Virginia
Iiave:had an abundance of "new apar;tmerit unit d`evelopment:sii ce the recession, this is
not the casein the Winchester area':
The two newest- apartment developments were built iii; 2005. There has been a
considerable number of adaptive r' p units in
euse buildings opened for a artment
downtown Wmchester, but 'b,uerall,, the Winchester area apartment, market .is modest
with:onlya few upscale properties.
j
Sumtnerfieldiand` Stuar:f `Hill' are the two newer and better aparfiiient properties
in the market area. In studying the.Winchester area apartment'rnarket, only 40± percent
of. the identified, better r6ital units are in defined apartment complexes., There are
31
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condos for rent; a :sizable number of towns for rent ''by 'professiona'l real' estate
companies, and currently 80± rentals in.adaptive reuse buildings in Old Town.
t
This list does not include rentals by individual owners - we found very few
available'`un;its on Craig s List - and noes not include single- fariily'rentals. Some of the
units are rented byiunversi'tystudents, but that is a small total ofrthe'occupancy shown
in Table'3.
. c
There are five .key points shown by the data. in 'Table' 2' in regard to the
magnitude and quality of the Winchester apartment market:
1. For a marketplace with 5,400+ renters ,(in 2013/14) with incomes of
$40,000 +,, the total, competitive apartment unit count. is modest, at 1,360 ±,
particularly given' the, fact that many of' the apartment units listed in
Table' 2 are below '.'the rents proposed for new apartment unit
development and -will ,not compete for the $40;000+ 'income renter;
2: The vacancy rate is, near zero for the, identified higher rent properties;
3. Most of 'the new, apartment units being placed on the market at this time
are one- bed'roorr units in, upper floors of rerfovated Old Town buildings;
(except for the ,:units recently opened at Cedar. Hill as noted below);
4. Nearly'60 percent of the apartment units that are listed in Table 2 were
built prior to 20.00,;. and
5. Tasker, Village 'w'itli -_64 units, is the only market rent newer apartment
complex, in Frederick'• County. Many of the other rental units in the
rCourity are attow.ns and condos: for resit.
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Table 3 Char'a'cteristics of Competitive Apartinent Complexes
and Other.fther End,Rentals, lierital!e.Commons
Market Area, - August, ZQf4
Date
'Total
Built
Units
ApactmentComnlexes,
Suiii�ierfield'
2005
64
Treetops
1995
52
Sivart Hill
2003
1,80
Task'er Village
2005
64
Pemberton-
1998
120, .
Peppertree
1987/89
194
(Subtotal)
(672)
Other Rentals D ..
Lakeside;Condo
Mid- 2000's
50
Tevis St.,Apartmenta
1997
20
Fox Court
2002/03
25
Windstone TH'•s
2003
75
Limestone'TH's
Mid- 2000's
20
Old Ti own Rental's
20.06/13
45
Saunders Construction Rentals
NA
120
Oakcrest Realtors:
NA
13.0
Habl'es' Real Estate
NA
210
(Subtotal)
.(695)
Total l2/
1;359'2/
Notes: .1 /- T&alst include rentals that are�nianaged by'these,
companies.
2/ Excludes the recently built
Cedar Hill Apariments.
Source: '-Field and telephone survey by S. Patz. & Associates;3iic.,
i
- Pipeline 'Proposals:' At this time, there are two active proposals for new
apartment-, u rd tdevelopment in the. market area.
1. lubal Square ,is a 140 -unit apartment proposal that has been approved by
City officials for rezoning. Jubal Square is expected to attract Shenandoah
University students for at least 40 of the 140 planned units. This proposal .
will likely'be ready•for occupancy by sometime in 2016/IT, -The. expected
start date ;is late- 2014 , or early - 207.5. the proposal includes. 281 three-
bedroom units and 20',two- bedroom units with dens. The remainder are
one- and two- .bedroom units.
2. Old` town Pr,operaies. 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.
33
:second buildin4g was- available for occupancy by-;the-end of 2013. Both of
these : build ings' are: fully occupied ': The:'last fwo,buil'd ngs are still under
construction, w.itli 'one planned for completion :in November, 2,014 and
,,the e last'expected -to open in early - 2075: This is�a�noin- aineriitized property
and.,, likely aii.attractiveproperty. for universtty.*tudents ' gi "ven its location.
The nitsare' two - :2And three = bedroom.
f
pipeline proposals. are summarized' Bart 'to follow with an
These: pipel p p iii the c
adjustment for apartment units expected to have some.uiiits, occupied `by Shenandoah
University 'students. -These active pipeline proposal's ,are all "in the 'City. 'These data
slipw,, if Jitbal Square is'built.as planned, the number !of ' new competitive market area
w
apartment units for families will be increased by 250 units Twenty =fo.ur of the units at
Cedar Hill are occupted and no; longer pipeline.
Jubal Square 1001/
``CedaE Hill 30 1/
Old T,m0i,., roperties" i 20.
Total , 250 (rounded),
Note 1 /'Adjusted to exclude college
student.oecupancy.
• 'rf
Within the County, ,there are two active development proposals.with apartment
units as plan components. Oi e ts. Heritage Commons: The pother. is ,Madison Village,
which is, located adjacent to the south side of Heritage Cot imoris. ' Madison Village is
planned, for 640 housing, units, of which 480 units will be apartment units. 'lt too will
likely be +- built -in phases.
Conclusions.' Our demand ,analysis shows market support for 800 ±. new
apartment units 'in the n1ar`ket area for the 2010 ' io 2018 period, excluding, units; to be
occupied by area college students This'projecti'on could be conservative; given the large
,.
4.
number o`f 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
l '34
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cons
truck
on with ,the last two buildings and continued. addition of new units in the
downtown with 120± units planned in adaptive reuse b'uildnlgs in Old: Town
Winchester. Jubal Square is the only planned. amenitized apartment property. The net
demand for new units by 2018 is 550 units.
Jubal Square will. be an attractive apartment property., but will have a large
x 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.
35
Completed. Building Building Under G
onstrucfion
i
The adaptive, reuse'apartrnent units in downtown Winchester are attractive, but
serve a small, select segment of the:rental housingmarket.
'Overall, the existing apartment market in the greater` Winchester area is modest.
The .pipeline units will not .change that. condition. The Winchester area has an
abundance of mature townhon es for rent due to an underserved rental apartment
in'aiket'.
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'
art of the development-will 'be for towns, not a artment; unit
• p. p . p .-
development. This', is opposite the development concept for Heritage Commons.
" Ap,artrient °unit•. development `at, Madison Village is likely to start by' late -2016 at 'the
earliest. The number'of;units to be bi- ilt.in the first phase is not now known.
Thu "s, the like �y magnitude of new units to be built during the .2014 -2018 period
Is 250± excluding units 'designated to students at Shenandoah University. This total is
well below- the projected, demand of 860± units. Under these: expected market trends,.
36
sufficient dem airid exists for new apartment unit devel`oprno it at Heritage Commons for
deliveryduring the 2016 to. 2018 period.
Towrihomes
Heritage Commons wilt also, have 150' fownhomes that will -be priced in the
$240,000 range, as an average, with upgrades to the base. price,-and 'reported inconstant
2014. dollars. The chart beloW'shows that there are five active townhome subdivisions in
V
the market area at this: time: 'Excluded is Orchard Hill, which closed. out in early -2013
and B`rookland Mall or, 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 for Heritage Commons.,
Table 4:. Aciive'Townhome.Cornmunities,
Winchester= Eiederick County, August,.2014.
ti Year
Approved
Built
2014 AvernoSales,
Started
Lots
Lots
Prices
Autumn Glen. 1,999.
211
199
''•$290,670
Fieldstone, 2004
225
69
.$246,600
Snowden_ Bridge 2007
104
90
$222,890
Sovereign Village ?013
62
4.
$244;900
:Towns,at Tasker 5/.14
81
1,
$207,000 -$238 0Q0
To'tal'/Average
683
363
$244,000,
Source; Rederick'County Depa'rnnent:of Planning and Development.
I Tliere are_ only 300± lots available at these townhouse subdivisions at this time,
.Except for-Sovereign Vill'a'ge 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 oil. the first phase of 16 homes at'Tl e Townes at Tasker,
developed by Dan Ryan,.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
tlurd will include 1. uI ni ts'and the final phase will include 32 units.
37
f� f r
•r,s
W.�y 4n�N
> ',
� Vie"S" e r. t dic�3an p ki
b s tit ter' c R ,r; o �'� iP , IS
gv
,.,: H•j !f at 111
{
bps `kn*�
�Y
_ a phi; •.�� �, ., �
`Towns afTasker
The, two newest townhome subdivisions are modest in terms of the number of
f units planned. Clearly, the ,,affects.of'the recession are still .anissue witl izew home sales,
but Sovereign Village opened. in 2013 and The Townes of Tasker opened in 2014. New
towns are likely to open in Madison Village-in 2015 or 201:6.
A smaller townhome community is proposed in, Winchester -City called 1570
i 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
„ 1 ,
tar g g` etin households earning $60,000 per year. Occupancy could begin as soon as 2015.
, , r
Following- are photos'. of townliomes at the other four active subdivisions.
Autumn Glen isnot included, as it is marketed as age- restricted housing;..
i
f.
The sales ace;for ne�v'townhome sales in the market p ' t area was 10 +_ in 2011, 50±
in 2012, 60± in 2013 'and approximately 20± to date in. 2014. If :current trends continue,
the 2014 total; will i be near or slightly below the 2013 figure;, when reported on an
,annualized basis:, 2012 and 2013 represent start -up years 'fo'r new home sales after the
recent.recession. None of the four townhomes built at Sovereign Village have sold yet.
i
These data show .market support for new towns at Heritage. Commons in time
and the. proposed price! range for towns at Heritage Commons., New townhome sales
are not'likely at Heritage Commons during the first one or two phases of development:
However, there has been ary increase in new home; development and this is expected to
continue...
Offke?Space
Heritage 'Commons is planned for 600,000 quare feet of office space. That total,
includes the, proposed :150;000 square foot County office building and a 70,000 square
foot build' p
din fanned' for development by the sponsor of Heritage Commons as new
space for ;businesses that need close proximity to County government offices. The
County; office,;buildirg will likely not open before 2016. The: sponsor's planned building
will likely y ''
open "at the same time.. In.addtion to the 220,000 square feet of office space. in
39
these two pui g
'ldins,.Heritage'`Commons will have "•landand approved masfer plan for
380;000 scjiare feet of`additional space.
Excluding some of the 'older office buildings ,in the, historic downtown of
Winchester, and, elsewhere n,'the j_ on, and the buildings-�occupied, by City agencies,
the ,market area h'as.°appioxiinately' '1.4 million - square feet of ;riewer.`office space, with
"newer" defined as space built since 1988. This total alsoexcludes the ex'istilg 65;300
square foot County koffice building:,
p-
The followin g ara g `raphs summarize the findings .of ,our .research on: the market
area office space: '
Of the 1,A± million square feet•of office space ii1 `the market area, 457,700±
square" feet,(33 ± %) is medical office space. -These buildings are ,clustered.
near the ;hos•pita on-Amherst Street and along Jubal Early Drive:{ Both are '
locations. in the City ;of WinchesterP: 1he.Heritage Commons site is not
likely4o be a;corripeti'tiuelocation,for medical office space.,
➢
The,. i rily recent office construction is °the ° Amherst Medical Office
:. � _ - 2014. u'eet f Building;'whih was,compl'eted in mid w9 o
_
s ace. The build
office! . p ing inc-lud`e's 8 condo suites that have all sold as
condominium,sales. Mbst.of the "" suites were sold to, medical tenants..
➢ The medical office space�is.at a riear,l`00% occupancy rate.
➢ ,Excluding the large government�buildings, such as FEMA ,and USACE,
k 'the market.;area has''650;000 ±',square' feet: of;,;newer space: These are
building buildin' s.of`mostly,10,000 to ;50,'000 square feet."
17er'thle,2000 to 2009,period,,12 non- medial related; general purpose "office
b. q
buildings were built with a total of 280,000 s ware feet For the 2000
decade,; th
h e average:annual building pace:for general purpose office space .
was `28;000 square feet per' y, ear , This space has a 10 ±, percent vacancy
rate
Tlie 501 =519 Ju'bal Early Drive buildmg`wrth 39,500 square feet is the:
newest, non- tiedical office: btiild'ing in the market area. The building was
,s .
"started durulg•'the recession: and . completed in 2012 :It'was purchased by'
�a,tenant'who,'will'occupy the inajoi=ity of'the btif d'ii1g. -
y 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
and , iridustriat space;, These buildings ii clude 120,000 square feet of
space; plus the - 110,000 square foot Navy Federal Credit Union.
Ov..erall,. the general purpose office space market is somewhat stagnant with only
E •
the 39,000± square fooe building on Juba] Early Drive built since'2009. The vacancy rate
is high. However, there are three positive issues to reemphasize:
I. The. Fodeial Government is increasing its "presence" in the area
and'expandin&the amount of office space that,, it requires. 'In 2012,
FEX A opened a 11.1,000 square foot'building'for 570 employees;
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
likely be competitive, for, new, office space after the new County office building is open.
I ,
At best,'Heritage Commons will likely attract 25,000 square feet of office space per year,
with expected, additional County space and possibly a lar-ge.4ederal government space.
This, pace .of development, wo.uld,. require 15± year for _full build out of the- "available"
sites for 380;000 'square feet of, office space over arid' above the 220;000 committed square
feet:.
Rkail ;S�ace
Heritage' Commons will have approximately 1'00,000 square feet of
-retail /commercial, s "ace: This will be primarily restaurant space, personnel service,
space and"non- retail 'space such as banks, child day care center, business service space,
coffee ;shops;�coinputer store; etc.. Only half o(,the space is expected to be classified as
retail space for resident expenditure potential. As shown above, the sponsor already has
i •
41
discussions with businesses that would occupy 30,000' square .feet, of which 20,000
„square 'feet will compete for expenditure potential fof.,consumer goods'.
•
Atbuild'out,:H'eritage Commons will have 1,200 homes occupied by households
with an average, income (2014 dollars). of $65,000. These households have a combined
household income of'$78 million.' Households in this income category will spend 15
percentof their income for .(1) food consumed away from_hoirie (2) sorhe. food for home
preparation; (3) miscellaneous purchases;. (4) personal ,services; etc. That total is ,$11.7
million, of which 10 percent can be "captured" by on -site retailers 'if retail space is
available,, or,abouf $2.34 million.
n n•, Are ..'. '::.. ,r.. -:. .� C_ 1 ♦.._ _1___•._ T___•J- _`_'_♦ 1
(2014 dollars)
"
Qp.:Si tel and. Area Employees
Number .
Orr -Site Rouseholds
1.,200
Average H'ousehold'Income
-$65;000
Total. Household Income
$78,000,000
Convenience - Purchases (at- 15 %)
'$1],`700,000
On -Site c otpre, (20%)
$2,340','000
There will ;be 21000 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 $3.6 million can be captured by
on- site;.retail stores.
(2014 dollars)
Number°
Qp.:Si tel and. Area Employees
7,000
Lunchtite Daily Expenditure
Potential, (260 days)
$10.00
Annual Lunchtime Expenditure,
,Poteniiat
$18,200;000
Heritage Commons Retail Store
-Ca pure (at -20%)
$3;600,000'
these' two sources of retail sales expenditure, plus a'20% inflow sales from other
area households, will generate total retail sales potential for, on -site retailers of $7.13
million. At an averag& "sales' per square',foot of $400, this annual' sales potential will
support nearly 30;000 scjuare feet of retail space.
Thus, to. support 100,000'square feet of commercial space on Heritage Commons,
the majority of the space 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 s.peculative,
at,,,best. However, 'there are',sufficient data to provide a comfort level that full market
support exists for the I4er Page Commons proposal, as 'presented, with the following
qualifications.
Even with increased > competition,
-t tats oh,200 homes are marketable within a•15t d
y ar'development period
at Heritage Commons, an 'average occupancy of'80, homes per year'. The
market`are'a population-growth supports new housing unit'demand, and
current "an pipeline competition is modest and not fully competitive for
the market.
To achieve 600,000 square feet of office space, in or beyoizd the 15± year
elevelo.pment period, will require attracting one or; ,more sizable users.
The site setting and,new. bridge over 1 -81 should allow for that. However,
reaching the 600,000 square foot total will require a ;strong marketing
effort,
➢ To achieve .T00,000 square feet, of ;retail space, .given, the nearby-
competition, at least one sizable tenant of 15,000+ square feet will be
`requiied. This is likely.
We used the proposed land use totals for the FIA to follow. The results of the
FIA are positive, for the current, development 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
43
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Section lI Fiscal and Economic Impacts Analysis
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 iinpacts, 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 relport; ;hhe 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
as the real property' and personal property taxes for the development and its residents .
and businesses.
The fiscal impacts analysis also projects the public service and facility costs to be
incurred, by Frederick. County `by development on -site and for off -site spill -off effects.
The results of the .fiscal impacts analysis will be to compare the: tax'revenues generated
by property development .wi*tll the tax- supported costs incurred by the County to
determine -,the net fiscal i rivacts in, terms of a revenue. sur,pfus,.or deficit over costs. This
is done for both 'on site and off -site impacts. Total annual impacts for the property at
buildout of ;the pr.olect'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
6
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 irrip acts of the planned Heritage Commons development as described above over
as 15 -year deyetopmeint 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 demaizd for goods and services Table .6 "presents a summary 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
by the County to serue Heritage Commons. These are annual impacts, expressed in
constant. 2014. doll'ars,,; to avoid projecting inflation rates. The overall yearly impact of
'Her, tage_Commoiis. after buildout and.-full response by the.loca:l economy,,,would be $3:2
"m million in `"net revenue surplus f6r Frederick County. "the ,paragraphs to follow present
the deriv .ati'ons'�of`these`figures.
i
i
" t,r
E
Tab .le'6. Summary' of Tax Re.�enues, Tax- supported' Costs; and Net.Fiscal
Benefits, Oh-site and Off -site; by:Develoument'Components at'
Build 'out Heritage Cori►mons, Frederick "County;'Virgini a (const'ant
-
Tax
Tax- suy6octed
Net Fiscal
Development, Component.
Revenue
Costs' '
Benefit
Apartments.
On -site Impacts
$1,537,250
$1;778,000
- $240,750
'Off -.site Impact's •
$451980
146,5
307 390
Total Impact ` -j,'
$1,991,230
$;1;924,5 -90'
$66;640
Townhouses
On' -site Impacts
$35.1,460'
,$;4.4'6,770
- $95,310
Off- :site' Impacts
$138,590o
$41.,090.,' `
..,$97,500
Total Impact j
$490,050
$78 ',860 `
$2,190;
Commercial Floor Space
On -site Impacts'
$612,030
$73;980:
$538,050
Off -site Impacts
515440
$146,540 ,
�,. 368 850
Total Impact - , ''
•$;1,,127,470
$220;570 '
$906;900
Office Floor Space'
`011= siteIinpacts'
$1,336,01'0
$554,850
"' "011,L60
Off-site Impacts`
$`1;877.450
490 730.
$' =1,386,720
Total. Impact
, $31,243,460
$'1,045,580
$2 „197,880
Total. HeriiAge- Commons. •„
.
On,- site.Impacts i• :'
$3.,866,750
.-$2;853;600
'$1,013,150
Off =site' Impacts � „
$2,985,460
825 -000
$2,160,460,..--
” Total 'Impact. 4,
$6,852,21'0
$3;678;600
$3,173,6.10'
'Sources FY201`5 Adopted Budget
of Frederick'
County, Virgmi'a, :U,S.'De'partment
of`COmpierce; and S
;Tatz'& Associates, Inc.
i
On- sit6lmi actssTax Revenues
The revenues to be considered in this report, are taxes collected by Erederick
County for'General Fund use. These include the property :taxes,v utility tax, -and other
smaller taxes Tle paragraphs to follow document the derivation of`the tax amounts for
the on- site..devel'opment at'the.property.
Real Property Talc. For convenience, the real property (or real estate) tax is
treated; first; for the residential development on -site, and' thew for the; non- residential
development on- site.' This: separation, is done to simplify the presentation. Total taxes
for residential and non- residential will then be combined to give total on -site taxes.
i
'Table 7Tpresents the, findings for 'the real property tax for the residential units to be built
of Heritage Commo'ns,, which 'include both, rental apartments and for.sale townhouses.
The table is straightforward; nurnbers of units are multiplied' by average market value
per unit,, and the result is jaws, at the County' tax rate of $0585, per $100 of value,
Market valuesper unit were confirmed by field research on competitive projects. The
total tax from. residential units at: the property would be almost $917,000 at:buildout.
T_ able 7. 'Der'ivation:of Real Property Tax.for Residential Units On -!site at Heritage,
Coinmon� at Buildoui, Frederick County, Virginia (consianU.. $'2014),
Apartments
Townhouses"
Subtotal
Cost Per Unit.
'$1 15,000
$24000
'$130:630
.Number- of Units
1,050
150
11200
Total Market Value i
$720;750,000
$36,0001000
$156,7,50,000
Real Estate Tax Per $100
$0.585
$0.585
>$0.585
Total Real Estate Tax
$706,390
$210,600
$916,990
Tax Per Unit
$673
$1,404
$764
Source's:' FY 2015 Adopted Budget for Frederick County, Virginia, and 'S':
Patz.&
-Assoc., Inc.
Market value for the non- resurentiai ( commerciat and :ottice) uses• on stye are
based on'.devel'oper hard costs, plus °soft cost's, lahc1 costs and site work. The c'omrnercial
space includes both retail and.,services space. For the office :space;, only the taxable
amount is included; which is 450,000 s care feet out of the amo' q total of 600;000 square feet to
�be built on• site: The :remair ing160,000 square feet will be in pi blic�dse and will be non-
taxable. The 'niethodblogy follows that for the commercial uses, with unit costs
multiplied, by.nurriber..of square feet, and the resulting value: multiplied by the real
property ,tax° rate: Together, 'the `noii- residential uses w•ou'ld produce almost $555,000 in
faxes;per year.
T_ able 8. Derivation of Real'PtOerty Tax- for'Non- residentw Units On -site at
Heritage �C, 6mmons: at-Buildout (constant $2014),
Non- :residential
Commercial
`Office
Subtotal
Cost Per Square foot
$122.00
$'1`83.50'
$172.32
Number of Square Feet'
100,000.
450:000
550,000
Total Market Va.1be;
$12;200,000
$82,575,000
$94;775,000
Real Estatejax Per $1'00
$0.585
$0.585
$0.585
Total Real Estate Tax
$71,370
$4831,060
$554,430
Tax Per-Square Foot
$0:71
$1.07
$ 1.01
Sources: FY`2015f.Ad'opted ,'Budget -for F'r'ederick County,
Virginia;;and
S. Patz &
Assoc:, Inc.
The, chart.bel' summarizesxeal property taxes at the'property for all residential
and'tion- residential uses. 'The 'total real property taxes from on -site development equals
01
approximately $I.5 °rnillion,at,buildout.
Residential
Non- :residential
Total
'Total Market Value $'1561750,000
$;94,775;000
$2511525,000
Real.EstateTax'PerS,1:00 $0.585
$0.585
$0'585
Total Real Estate Tak $916,990
$554,430
$1,471;420
Personat Property Taxes. Both residents and, businesses are assessed personal
(business) " property! faxes. For residents„ this is a tax -of) motor vehicles.: for businesses it
is, a taz^on furniture' ; fixtures; and equipment (FF &E): To address residential personal
property"taxes, the firsf step is to.'estimate 'the average depreciated -value .per vehicle in
the County. The, sequence of calculation to achieve. this are shown in Table 9 and
suimimarized as follows' '
The FY'2015 >Adop'ted Budget, for Frederick County gives an allocation of $44.1
million.for expected. personal Property taxes.
® Based on the. percent of real estate assessments that are residential - 69 percent -
itis,estimate'd that reside'ntial'personal property taxes. are $30 million.
o
Dividing the total resist ential personal property tax by the tax, rate produces the.
total assessed value` of vehicles in the County, $626 million.
o According -to the statistics section of the current budget,. there: are over 31,000
- households (occupied.,housng.'units) -in the County,, each having an average of
2.3 vehicles, for a County,total of aln-ost.72,000 vehicles...
o. Dividing ,.;the number of vehicles into the total assessed value of vehicles gives, an
ayerage assessed value per vehicle of, $8,700.
,
49
,
I'
Table, 9. Estimation of the Average Depreciated
Value of'Residential'Vel icier,
Fred'er &County, Virginia'(constant
Amount
Personal Property'Tax $44;070,226
PercentWsidential 0:60
Residential Prop. Tax $30,408;456
Reside- tial`:Depreciated Value $625,688, 394. .
Number of Households 311-345
Ave Vehicles Per Household 2.3
Numberzof Vehicles, 72,094
Depreciated Value '-r Vehicle $8,679
Sources: ;FY 2015 Adopted Budget and Statistical
Section for Frederick County,`Virginia,
'and Frederick County Department of
Revenue
I
1
Table. 10 applies the, average assessed value per,-vehicle, and the personal tax rate
in_ the County to the numbers of apartments and. townhouses to be built at Heritage
Commons. This yields a personal property tax of $673,000 for„ the :apartments and
$114;000 for the town houses, for a.re'sidential total' of over $787,000. lii the analysis, an
occupancy ate of 9
p y r 5 . ?percent is assumed to account for normal. vac'aiuy and turnover.
This is a. conservative figure; as actual occupancies may be higher.
l..
Y
.t
Table 10. Personal.Property Taxes For Residential Uses °at Heritage Commons at
Buildout (constant $2014)
Coniinons, -at `Buildout (constant.$2014.)
Apartments
Townhouses
Subtotal
Number. of'Hduseh'olds. @95 %d.
998'
143
1,140
'Vehicles Per Household
1.60
1,:90
1..64
Mjbiber of: Vehicles
1,596
271
1,867
Value Per Vehicle ,,
$8,679
$8;679-
$8;679
Total' Depreciated Value
$13,851'290
$2;349,770
$16.,201,060
Tax @. $4.864100
$673,170
$1140200
$7,87,370
Tax Per Unit
$641
$76.1
$691
Sources: S. Patz & Associates, Iii'c.
For non-residential floor space, an average and total FF &E cost is shown in Table
11. This is depreciated. to an average of 40 percent. Multiplying by-the tax rate yields the
projected business property tax for the proposed development, a total of $204,000 for the
non- residential properties'_
Table 1'1 Personal Property Taxes�For Non - residential Uses_at�'Heritage
51
Coniinons, -at `Buildout (constant.$2014.)
Commercial
Offi'ce.,
Subtotal
Total Flg6t Space (Sq. Ft,)
100,000
450.000
550,000
FF &E/,Square Foot;
$15
$20
$19
Total. FF &E
$1,500,000
$9;000,000
$10,500,000
Depreciated to 40%
$600,000
$3,600,000
$4,200,000 ,
Tax . @ $4.86/$100
$29,160
$T74,960
$204,1'•20
Tax Per Square Foot
$0._29
$0.39
$0.37
Sources: S. NU &,Assoc., Inc.
51
r
Residential., Non - residential Total
Total'D.epreciatedTaxableValue_ $16;20,1,060 $4200,,Q0Q $20,401,060
Tax at $4:86 Per,$1 06' $7$7,370 $204,120 '. $991.,490
Tax - Per ,- Unit %Seluare Foot $691 $0;37
Retail Sales !Tax. Of the 1'00 000 square feet of commercial space, at Heritage
y. Commons;, it is estimated that 80! percent 'will �be,*in eonveriience.'retail or restaurant
space, both, subject to the retail sales tax. The remaining 20 percent would be comprised
of non = taxable persona L and business services. This is `a best .guess" estimate at ,this
lime 'as fhe' list of expected. retail tenant's .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 . i
With :averages annual store : sales of $400, per square foot" (ail estimate that may
c'hatige over. time depending on the'ret l /'service space mix); sales' receipts'for°'the retail
and restaurant space would,,:come to,$32,,million annuall'y.. This 'sales level represents an
average for small retailers and restaurants. There is a wide -variation, of sales at retail
p yp ore is' a company, store or :is
spaces; depending upon`the� t ' e; of store and whether the store
indivtduallyc owned. The estimate of $400 -per square footin sales comes from Area retail
brokers aiel d`euelopers of retail space.
- These. are, modest level's ,of business receip'ts.. Retail stores at He _age Commons
NY not Have an` =anchor tenant such .as a, big box store .or supermarket; so sales. maybe
Power compared w7 th,larger�ie'tail cehters. , Taxable sales from on -site retail-stores would
�el_d
$320. r
000,a
_ y ,- t 1.0 percent tax;'rate; based on a: rate. of�sales of $400 per'�square foot.
Table .12..Reiail'Sales Tax for the Commercial,
Space at,Heritage Commons at
.. Buildoui (constant
$2014).
Amount
Corn nercial `Floor Space
I OR '000
Percent Retail7Resiaurant
0.80
Retail %RestaurantSq. Feet
80,000
Sales Per °Square Foot
.$400
Total Taxable Sales
$32,000,000
Sales Tax Rate
0:07
Total Sales Tax
- $320,000
Safes`Tax"Per Gross SF
$3.20`
Source- S7 Pati & Assoc., Inc.
Business License Taxes.. ,Certain businesses are taxed .in the. County under the
Business, Professional, and 'Occupational License (13POL) tax. The two cases in effect
here 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 13, the respective BPOL tax rates are applied to the taxable
receipts, in commercial and private office space, yielding .a itotal, of .$716;500 in ,BPOL
taxes annually.
53
i
Consumer Utility Taxes. Expenditures on utilities are typically taxed in Virginia
municipalities on atideast three ,of' the following, utilities: `!electric, gas, water, ,land- line,
cell ,phone, and ihternet. For households most utility taxes, are approximately .$3.00 per
month per utility, for three utilities this is '$108 per household per. year. For the
approximately 1,000 ;h6useholds in apartments, this comes to a 'tax of $107,730, and for
the approximately 140 household's in. townhouses this tax comes to :$T5,390, for a- total in
residential units of $123;120':
Non - residential .utility taxes are determined by backing residential. utility taxes
out.of the total County FY 2015.budget.for utilities of $4.25 million. This is done in Table
14;'resultin`g in `a :estimate of $32 -:in "utility taxes per employee per year. With an
estimated 200 employees in `commercial space, the utility tax for that space would come
to $6,480' ',Similarly;. with 1,500: employees in private office',space, the utility taxes in
offices w
ould.co
_ me to. $48,610, for. total non - residential utility taxes of $55,090. '
54
Table 13. Business, Professional,=and Occupational
(BPOL)'Tax at the,.Non-
residential Uses at.Heritage Commons atBtiildout (constant $2014)
Commercial
Office., Total
Taxable Floor S, ce
80,000
450;000 530,000
Rec6pts:Per Square.Foot,
$400
$250
Total' Receipts,
$32,000;000
$112,500,000 $144,500,000
Tax Rate Per $';100
$0.20
$0.58'
BPOL Tax
$64,000
$6521500_ $716,500
Tax Per "Gross Square. Foot'
$0.64
$`1,.45 '. $1.45
,.Source: S. Patz &.!Assoc., IiSc.
Consumer Utility Taxes. Expenditures on utilities are typically taxed in Virginia
municipalities on atideast three ,of' the following, utilities: `!electric, gas, water, ,land- line,
cell ,phone, and ihternet. For households most utility taxes, are approximately .$3.00 per
month per utility, for three utilities this is '$108 per household per. year. For the
approximately 1,000 ;h6useholds in apartments, this comes to a 'tax of $107,730, and for
the approximately 140 household's in. townhouses this tax comes to :$T5,390, for a- total in
residential units of $123;120':
Non - residential .utility taxes are determined by backing residential. utility taxes
out.of the total County FY 2015.budget.for utilities of $4.25 million. This is done in Table
14;'resultin`g in `a :estimate of $32 -:in "utility taxes per employee per year. With an
estimated 200 employees in `commercial space, the utility tax for that space would come
to $6,480' ',Similarly;. with 1,500: employees in private office',space, the utility taxes in
offices w
ould.co
_ me to. $48,610, for. total non - residential utility taxes of $55,090. '
54
1
Table 14. Utility Taxes Per Employee,
Frederick County, Virginia.(con "starit'
i
Amount '
County Utility Taxes FY 2015
$4;250`00
1Vurnber of HoLiseh'olds
31,345
UtilityT.axesePer Household
$108'
Residential'Ut'ility Taxes
$3,385';29,7
Non - Residential Utility Taxes
$864;703
Einploynnent
26,684"
Taxes Per Employee
$32
Sources: FY, 201 5 Adopted Budget 'and.,Statistieal
S'ection,for Frederick County, Virginia
Total residential and non - residential, utility taxes would total. ,$1. 78,210 annually
after buildout in,constan't year 2014 dollars.
Meals Tax. Of .the 100;000 ,square feet of commercial space at• the site; up to
80,000 square feet,co,uld be c'o'nvenience retail or restaurants, the:latter'comprising 10,000
square approximately. Restaurants are fairly receipts - intensive) 'here assumed at $300
per "square foot, for sales (recei'' ts) of $3.0 million. Tax 'on $3':0 million of sales at four
percent gives an. amountof $120,000, as Table 15 show's.,
-Table 15'. .Meal Taxes at Heritage Commons at
Biuild'out (constant $201:4)
Amount
'Restaurant Floor Space Sq. Feet 10,000
Sales Per Square Foot $300
Total Sales $3,000;000
Tax''4 4.06k $ 1 20,0.00
T"m Per'Gross SF $1.20
Sources: �S..Patz &Assoc., Inc.
Motor Vehicle Licenses. The :analysis for personal property' .taxes estimated
1;596 vehicles at the. apartments, and 271 at the townhouses, The license fee is $25 per
vehicle, giving total; fees of $30,900 at the apartments` and $6,770 at the townhouses.
Total fees would be $46,670.."
Recordation Tai. Real estate ownership transfers are taxes at the state level at
the rate of $0. 25 per $100 of value. One third of this is returned t'o,,the municipality, a
rate of $.0833 per $100. Assuming that townhouse units are •registered for recordation
three'times in. 20 years - initial recordation plus resales every 10 years - and apart eats,
and :non= residenfial are° recorded twice in 20 years; the following annual average:
I ecordation taxes would accrue (see:T,able 16).
56
}
Table 16., Annual Average Recordation Tax at Heritage Commons; -at
Buildout (constanV$2014)
Tofat'10-
Annual
Taxable Value
YearTax
Ave. Tax.
Apartments
$241.,500,000
$201,250
$'10,Q60
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
$137,630
$6,880
Non - residential!
$189,550,000
$157,960
$7,900
Total Recordation Tax
$539,050,000
$449,21.0
$22;460
Source: S. Patz &Assoc.;, Inc.
1 Summary of On -site Tax.. Revenues. Table 17'- summarizes the taxes by type for
residential uses at the site, and Table 18 presents those taxes for non-residential uses.
Both tables are' for 'project. buildout. Residential taxes total $1.9 million and non-
..
residential taxes total] $2:0 million. As Table 16 shows, the total taX revenue to. accrue to
Frederick County atbuildout of theaite would come to $3.9 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.
J
' � xes.Residential`Uses °at Herit'age Commons,
Table 17. Suinmary'of Ta
'at.Buildout;.Ft4eerick County,
Virkinia {coit'stant $2014)
Apartments
Townhouses . _
Residential
'Real EstateiTax '', $70,6;390
$210;600
$9 [6;990
Per sonal.PropertyT�x.•• ;$673;,170
$114,200,,,
$787;370.
Retail Sales; Tax $0
$0
$0
BPOL Tax, $0
$0.
$0
Consumer Utility Tax $'107,730
$15,390 ,
$ l 23,120
Meals Tax 30
$0
$0
Motor Vehicle L ic: Fee $
, 300
$4.6,'670
- $10,060
Recorda6b' n Tax
:$4,500
$-14,560
Total Annual Taxes `, $1,537,250
$35.1,460
$,1;88$•;710
Taxes'Per. Unit , $1,464
$2,343
$•1574 -
Sources; S. Patz, &Assoc., Inc.
Table.18. Summary of Taxes' Non - residential Uses at,Heritapae
Commons,.at
Buildout, Frederick County;
Virginia
(constant $20114)
Commercial
Office;
Non - resid.
Real Estate Tax
$71,370
$483'060'
I
$554,430
Personal Property Tax'
$29,160
$174;960
$204,120
Retail Sales, Tax
X320,000
SO
$320,000
BPOL Tax
$64,000
Y $652;500
-$716,500
Consumer Utility Tax
$67480 `
$48,,616
$55,090
Meals
iVl
$120,00.00
;$120,000
Motor,`Vehicle Lic., Fee
$0
$0
$0
Recordation Tax,
1' -020
6 880
:$7;900
Total Annual Taxes
$6127030
$1;366,01;0
$ G;978,040
Taxes,, Per Sq. Foot
$6.12
$3:04
$160
I
Sources: S.'Patz &,Assoc:, Inc.
Among all•taxes.from,the,site; the two predominant ones, are the two property
taxes, with approximately $2.5 million in tax receipts for the Counfy. This means that
the property taxes account for almost 64 percent of,total taxes -. The BPOL tax is third in
size; ._at�$0.7 million, or, 20 percent_of� the ,total. This 'tax derives primarily from the office
Space.
59
Table; 19. $u nmary.of'Taxes From Residential, and,Non- residential
'Uses,,at,Writage:Commons, at Buildout.('consiane$2014)
• `Residential
Non- Resid':
Total Amount
Real Estate Tax
$9.16,990'
$554;430
$1,471,420
Personal Property. Tax
$1,150,590
$247,860
$991 „490
Retail Sales Tax
$0
$320 000
$320,000
BPOL Ta_x
$0
$716;500.
$-71.6,5.00
Consumer - Utility Tax,
$123,120
$55,090
$178,210
Meals Tax
$0
$120,000
$1`20:000
Motor Vehicle,.Lic. Fee
$46,67.0
$,0
$461670
Recordation Tax'.
$14,560
1120
$22,460
Total Annual Taxes
$2;251,93.0
$2.,02t,780
$3,866,750
Sources: S: Patz & Assoc:, Inc.
Costs to'the County
Tlie 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
deposited in the 'Couiify''s., Geiiei al Fund, those' revenues for the site: are compared with
the ,tax = supported costs• that °'the County would incur in servuig 'the residents and
businesses *.'the site. Other-sources of revenue 'and. costs 'are excluded, since they
accrue to separaie' funds, in which expenditures generally equal revenues.
-The sotirce,for'tl e tax - supported costs the County would incur for service to the
residences and businesses at Heritage Commons is the County's FY 20TT Adopted
Beudget. In :the.succeedng paragraphs the budget is presented both in terms of
.budgeted revenues and budgeted expenses. The tax - supported portion of the budgeted
expenditur es, .is 'derived and expressed. on a per capita, basis. - for population
(representing residents), . employment (representing businesses), acid pupils
60
'(representing? costs. of public education. The per' capita costs- ,to the County will 'be
ap pl ,d ;,to the population, employment and pupils ° at the 'site to 'determine the overall.
costs to the, County from_the,development of the site.
County Budget Revenue's. The purpose of presenting a' :summary of County
revenues in the chart below is twshow what portion,is from locaf taxes., This proportion
represents ° the 'tax -burden'' for. the budget; representing the ainount °of' the County's
local revenues that County resk en.'ts and businesses musk make up in taxes. The chart
shows that of $129.5 milliol in revenue from local sources .in the FY-2015 budget, fully
95.5 percent must come from local taxes.:
General Fun Revenue
General Property Taxes,
Other•Local Taxes
..,.-7r __., _.
Subtotal -Local Taxes
Local Non =tax Revenue,
Total Local. Revenue
Percent'L 0-cal Taxes
FY2015'
$93,490,22.6
$30,2'13;61 1
$123,703;837
$5;837;265'
$1- 2,9541,102,
95.49%
County Budget - Expenditures. Table 20 summaries FY2015 bud'g'eted General
Fund expenditures by„ major ;function for Frederick County and' the °portion that is to be
boded from local sources' •.,(A detailed table' of expenditures is presented' -in Appendix
Table A -1.) These 'data' w.ill,be applied below to determine. per 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'General Fund budget for FY2015 is $142 million, of which`$13,0 million
mu,st;come -from local,sources... This is over 90, percent.. Other sources are ,transfers from
the State.and Federal;goveinmeinfs.
Table, 20_. Summary of Budgeted General Fund'Expendiiures,and
the Amount:to�conie from Local'.Funds-, F..rederick.Gounty,
Virj ia,FFY2b15
Generaffund Functional Areas FY2015 FY2015
Expendifure.Budget. Adopted Local FuInds
General,Gov't,Adminis'tration
$8,834,088
$8;037,938'
Judicial Admiiii'stratioi!
$2,273,085
$ °1,198 ;643
Public S'afet"
$28,4.111,307
$24,55;�1�,14.6
Public Works
$4,172,249
$313.12,968
Health and Welfare.
$6;91.0,546
$3,490;604
Community. College
.$56;000
$56,000
Parks, Recreation &"Culture
$5;530;713
$1,227,880
Community" Development
$1,9.24,902 '
$1.,514,744
County.Debt Service
$2;56'1,645
$2156.1,645
Other Departmental ex. Schools
$1,739;136
$1,739:136
Subtotal
$62,413,671
$49;690,704
Transfer to School, Operating Fund
$65;347,740
$65;347;,740
Transfer ,to School Debt Service
$14,626,151
$1.4;626,15' -1
Subtotal Schools'
$79,973,891
$79';973,891
Total'General'Fund
$142,387,562
$129,664,5.95
Source: Adopted FY2015 Annual Budget for Frederick County, Virginia
Per Capita. Courify Costs, In. Table 21. budgeted General' ;F.urid expenditures
funded' from local sources for' FY2015 are allocated to popu'laiion,,, employment, and
public school pupils °and the.'local tax share is calculated. One hundred "percent of the
General. Fund transfer to'the School Fund is' tax" supported, meaning `that General Fund
tax-supported costs per pupil are. $5;845 based on "recent enrollment of 13,066 pupils in
the County unty school. system: Non-school expenditures are allocated by department to the
tw,o,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 their er►tirety to,population. The table shows that the per capita tax- supported,costof
62
services and facilities for the. population average, $447 per capita; for employees, the
amount s'$370 per cap'ita..
Table 2L: 'Generalfth d Expenditures for Population,'Enrployment, and Public School
',Pupils', Erederick County, Virginia, FY2015
General Fund Functional Areas
Population
Employment
Local
ExpenditureBuftet
iShare
Share
Funding
0.759154459
0.24084554`1
General G'ov't Administration
$6,102,036
$1,935,902
$8,037,938
Judicial Administration
$909,955
$288;688
$1;198;643,
Public Safety
$;18,638,1 12
$5;9131034.
$24;551,146
Public Works
$2,515,054
$797;914
$3,312,968.
Health and Welfare
$3,490;604
.$0
$3,490,604
Community College
$56,000
$0
$56,000
Parks, Recreation & Culture
$3,227,8180
$0
$3,227;880
Community Development.
$1,149,925
.$364;819
$1,514,744
County Debt Service
$ 1,944,684
"$6.16,961
$2,561,645
Other Departmental ex. Schools.
$1 320,273
$41,8;863
$1,739;136
Subtotal
$39;354,524
$10;33'6,180
$49,690,704
Percent Taxes
$1
$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
$376
$428
Transfer to School Oper. Fund
$65,347;.740
$0
$6573471740
Transfer to;School DebtServ.
$14,626,151
$0
$14,626,151
Subtotal Schools
$79,973;891
$0
'$797973,891
Subtotal School Taxes '.
$76,370,179
$0
$76,370,179
FY201.5.Pu "I 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 FY2016, 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 fhat F'rederiek County will.,incur in serving the Heritage; Commons development at
6ttildoui. The following paragraphs derive the esdrnated costs to the County .from the
63
development, first population; next pupils, and finally .employmert...Data in Table 19'
show' the number 'of, Households at 95 perceiit'of' all residential uiaits,: which it has been
..,shownI is conservative. At $44:7 per capita, the apartrnerits entail County liopulation. tax -
supported.costs,of $758,000 annually;. in constant year 2014 dollars. �By comparison, the
townhouses entail $1172;,000 in:populat oncosts.
Table 22. General'FundCosts for Frederick..County Allocated to
Residents- at'Heritage Comnt6ns;(constant'$2014)
q
Apartments
. Townhouses
Total
No. of'Hou'seholds
998
143
1,140
Popufation/HousO old
L7
2 ='7
1;83
Total,Populatiob
1,696
385
2,081,
Cost-Per Capita .
$447
$447,
$447
Population.Costs
$75:7,69-0
$171,910-1 -
$929,600.
Costs`PerUnit °'
`$722'
$1,146
Sources FY 2015 Adopted' General Fund B'udget'and Statistical"
Section, Frederick County, Virginia, aild'S. Patz & Assoc., .
Inc:
School costs have the .greatest cost impact from'the 'situ on ;the. County. The 'key
.to school ,costs is the pupil generation rate,. that is, 'the number of public school pupils
that can be expected',-on average, from each hob'sing unit: The pupil generation rate for
apartments' is based on our, research of the area's two better' ;and most comparable-1-
apartments. ,Bo th. ha en to be `in Winchester; there y = subsidized
PP is onl oile' non.
apar`'tmen.t complex in the, County, and it is not of the quality that will' be developed at;
tlie'Herrtage Commons, -site. There are few decent apartment comparables to; *evaluate,
student generation rates for.,tlze study of Heritage. Commons, as most, area - apartment
r .
communities ,are, at.lower, rents: Pepper, Tree and Stuart Hill are the two ,best examples;
r.
,of,co ' arables to I erita'ge Commons, where data we'r`e available. Pupil generation rates .
for - those two apartments. are shown in the,ehart below.
64
Apa'rfinents
knnj!s
Units,,
:Rate
Pepper Tree
20
194
,O. 103
Stuart Hill
9
1$0
0.050
Total
29
374
0.078
To be more conservative, -a pupil generation rate of 0.1.75 pupils per apartment
unit is assumed. For townhouses, the rate for better properties is 0.31 pupils per unit.
For the townhouses, a similar "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 ate-from the Frederick County Scllool District).
Townhouses
PupllS
Units
`Rate
Brook land Manor
20
68
0.294
Snowden Bridge
20
44
0455
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 in the chart
above would "suggest'' a 0.1t Late of pupil per apartment unit. Higher rent apartment
properties ,generate. lower rates, of students than lower rent properties. We used the
ratio of Q175 to 26e conservative, which is almost double the rate shown in the chart.
Using this, higher °rate reduces net 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 Herita
g e Commons will. be' in a sub. urban setting. Within the Winchester marketplace,
only the more modest rent a,parhnent 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, townhoues. This is' an appropriate ratio.
65
At:$51845 in General' Fund taxes pet,' pupil using the .above rafios, the 222 pupils
expected 'at the, on site;;housiiag w,o:uId generate :•$1J million 'in tax- supported..school
costs for they County, $1.0 rriillion from the 'apartments and $0.3. "million for the
townhouses.'
Table -23 'Cos64o.Supoort POW ic School Pupils at Heritage.
Commons'.by "Housing Type (constant $20141 `
Apartments Townhouses; Total
No. of Fl usel►olds 998 143 1,140
PupilIs.Per H old 0.175 0.330 0.194
No. of Pupils 175 47
Cost Per ;Ptood •, $5,845 $5,845 $51-845
School. Costs $1,0.20.;310 $274,860, $1';295 1'7O
Cost Per Unit, x$972 $,1;832 .$4X-9
Sources: FY 2015 Adopted' General Fund Budget and
Statistical, Section,, Frederick County, Virginia,
'Frederick County School, Di strict., and S.,Patz &:
Assoc., Inc.,
The following chart surrimarizes the costs to the Courity from the residential
development proposed fo.r the.'site:"
•' - Apartments
Townhouses,
Total
Population - Costs $757;690
$171;910
$929,600
School .Costs $'l ,020,310_
$274,860
$'1;295•,170
Total,Costs ;. $- 1.,778,000
$446,770
$2,224,770
Costs from the, 'businesses at Heritage Commons come from, the number of
eirtployees at the'establisl merits. Costs are relatively small from the commercial space
since., it; is of limited extent, a' tI74,000 annually. Costs attributed to employees in office
space would come to $55500; for 1,500 employees.
66
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 planrJed..At buildout Heritage Commons would produce a total .
net surplus revenue of $I O'million,-as shown in Table 25. This is the difference between
revenue-of $3.9 million and costs of`$2.9 million annually.
M
TabI624.:Costs for to Support EmplaVies
at Heritage
.Commons�('consfant $20.141
Office
Commercial
Taxable
Total
Floor S pace SF 100,000
450,000
550,000
.,Sq. Ft: /Employee, '500
300
324
Employees 200
1,500
1',700
Cost Per Ernp'loyee $370
$)70
$370
Einploymen.t Costs $73,980
$554,850
$028,8.3:0
Costs Per Sq.''Ft. $0.74
$ [.23
$1.14
Sources: FY 20'15. Adopted General Fund. Budget and
Statistical Section,.FrederickCounty, Virginia,
and"S.
Patz & Assoc., Inc.
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 planrJed..At buildout Heritage Commons would produce a total .
net surplus revenue of $I O'million,-as shown in Table 25. This is the difference between
revenue-of $3.9 million and costs of`$2.9 million annually.
M
Table 25 Summary of On -site Tax, Revenues, ConntyCosts, and Net Fiscal
Benefit, by Type, of Development at Heritage.-Commons -at Buildout
Sconsiant $2014).
Apartments
Townhouses
Residential
Total'TaxReveiiue
$1;537,250
$3.51;460
$1,888,710
Tax- supported Costs
$1;778,000
$446,770
,$2;224,770
Net Fiscal Benefit
- $240,750
-$95;3 f0
= $336,060
Number of Units
L,050
150
1,200
Net Benefit Per Unit
-$229
-$635
Commercial.
Office
Non - residential
Total Tax Revenue
$612;030
$,1;366;01,0
$1,978,040
Tax - supported Costs.
.$7,3,980
$554,850
$628,830
Net Fiscal Benefit
$5.38,050
$811,160'', .
°, $1,349,210
Number of Sq. Feet
1 -00,000
450,000,
550,000
Net Benefit Per S. F.
'$5.38
$1.80
Residential
Non= residential
Total '
Total.T,ax,Revenue
$,1;888,77.0
$1,978,040
$3,866,750
Tax - supported Costs
$2,224;770
$628;830
$2,853',600
Net Fiscal Benefit
$336;060
$1,349,210
$1,0.:13,150
Source :,'S..Patz,& Associates, Inc.
Off -site Impact's: 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 b'u_siness receipts off-site for the p•urchase� of goods and
services -from other vendors in the County. The multipliers, used in. this analysis 'are;
speeific.�ao 'Frederick County; Virginia. Consumer budgets are identified b.y the U:S.
Bureau, of Labor' Statistics by area and income level. There is ' no direct budget
il, information for`'Fred'erick County, and the income level for the Washington, D.C. area is.
too high to be applicable here. Instead, national data. for a budget for household, income
in the $50000's has been chosen for the apartments, and household incomes of $90,000
for residentsinthe 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. ai d 'businesses expenditures from the on -site development -; area made outside
of Frederick County, -and 60 °percent are retained within the. County. Among the'larger
expenditures by consumers are; 19 percent for shelter and 27 percent for retail trade,
including automobiles.
Consumer expenditures: made off -site in the County are translated into economic
impacts in the County using multiplier mafrices 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 County initiated by residents and businesses-from on- site. There are
separate matrices for business receipts;. employrnent'and employee earnings. The items
a.
in the consumer budget are multiplied in turn by these expenditure - specific categories
in each matrix and summed to give the "ripple effect," `°spill- 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 million when housing units are•.oecupied
and businesses in operation. The largest component would come from the 450,000
square, feet of .privately - occupied office space..
eW
. 'c.
r-,i $1.70'million'in expenditures for goods and services would be expected to
comprise; - percent in county 'dollar flows, which; would create another $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 commercial, `where retail trade can be
expected to make most gf,-its wholesale purchases of goods and services from sources 1.
outside the County. : Residents 'of townhouses create rel atively. greater - impacts than do
apartment renters. because•of.higher income ofhousehold's m towidzouses. Altogether,
the ;business impact in";Frederick ;County would come to $391•aiiillion. These off -site
i'macts also create tax1 °receipts and costs to the County as. do: on -site; impacts (see
above).
Off -site Impacts byland Use
;Apartments
Townhouses
Commercial,
y
'.Office
Direct Expenditures ''
$23,206,000
$6,365;000
$28,000;OOp
$1.,12,500.10.00
Indirect Spin ofPEffect
$47,65.1,000.
$17,669,000
- $8;026,000,
$14.7.;938,000
Total Business Receipts
$70;857,000
$24,03.4.000
1:'$36;026,000.
:$260,43:8,000
Employment and' Earriin s
Previous.:,aAalysis identified 1,700 employees that would 'be 'oh-site at the
property, most being,occupants of office space.. Another 2,240 jobs would be created off l;,
site by the spin -off from the on -site development. ' The :office space on site, `at; Heritage
,
Commons would hAvei the greatest impact,` creating over 1',3001 off -site jobs off -site in the
County. These off s�te.'employment. impacts would generate ;$149 million . , in employee
earnings;in the County, This would bean average! of about.$67,000�per employee. This'•
is Heavily `influenced by,-the. higher income jobs spun -off from the offices on'sit'e!
Off -site Fiscal Impactsi.
The •methodology used' rn projecting fiscal impacts-off -site mirror those used to
project fiscal.irnpacts oil - 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 11 multipliers
7.0
from 'the Bureau bf Economic. Analysis break receipt's, employment and earnings
impacts 'clown, into 21 different sectors, and the impact dollar amounts (business
revenues) in they sectors form the basis for determining taxes. Many taxes can be
calculated, directly 'from "these receipts, or from employment created off -site in the same
fashion as for' o itsite 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
buildout inconstant 2014 dollars. Table 26 below summarizes the off =site fiscal impacts .
by type of use. Appendix Tables A72,- A-3, and A4.give, the, individual tax sources for
each type of use.
i
Table 26: ,I umri►auy. of Off- site, Spin -off Impacts for Heritage Commons, at
Build6ut, *'Type af'Use (con4ant,$20I4)
Tax Tax-supported Net Fiscal
,Type of Use Revenue Costs Benefit
Apartments $453,980 $146,590 $307;390
Townhouses $138;590 $41,090 $9,7,500
Commercial $5115,440 $146,590 $3.68,850
Office $1;877;450 $490,730 $1386,720
Total's Off -site Impacts $2,985-,460 $825.,000 $2 „160;460
1.
SOUrCeS: Bureau'of, Economic Development and Bureau, of Labor Statistics,
U.S. Department of Commerce, Adopted FY20.15 Budget for
Frederick County, Virginia, and S. Patz & Associates', Inc.
71
t
Su mmarv_of On -.and Off -site Impacts
The overall annual impacts, both on -site, ;and--off-site spinoff, would be
substantial from-Heritage Commons for Frederick County. Total tax revenue each year
would be =$6.9� million, compared to costs to the County of $3.7 million: Tiiis would leave
'a net fiscal'bene'fif of $3'.2 million annually for the, County. These, overall impacts .are
summarized 'in Tab16,27 by type of use on -site at Heritage Commons. Table 6, above in
the introduction to this section, and Appendix Table A -5 provide detail"on both the on-
s ite and off -site impacts from di&deyelopment.
Table 27. Summary of Total, On =site and Off -site Impactslor Heritage,
Commons .ai:Buildout, "bi 'Type-of Use '(constanE$2014)
Tax Tax-;'supported Net Fiscal
Revenue Costs 'Benefit
Apartments $1 „991,230 $1,924,590 $66,640
Townhouses $490,050 $487,860 $2,190
Commercial $ 1,127.,470 $220;570 $906;900
Office 13,243;460 $1•,045;580 $2,197,880
Total Off -site Impacts $6,852,210 $3,678,600 $3,173;610
Sources:. Bureau of Economic; Development and Bureau; of Labor Statistics,
U.S..Dep'artment of Commerce, Adopted FY2015• Budget for
Frederick County, Virginia; and S., Patz & Associates, Inc.
Phasing of Heritage Commons
The deve'loprrient of, Heritage. Commons is °,pl'anned for three five -year phases, for
a_ "buildou't period of 415 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_Count'y for each, type of use for, each phase.
Phasin>±:,By °Use
1st5 yrs
2nd 5 Yrs .
3rd' 5 'Yrs '
"Total
Apartment Units
350
350
350
1,050
To W' nh'ouse,Units
100
50
150
Commercial;Square,Feet
50,000
25,000
25,000
106,000
Office Square Feet -
100,000
175,000
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 (fornon,- residential). All of these benefit
parameters have been ".derived' and set forth ':in previous tables in this economic and fiscal
impacts, section of the.repor;t, :or, in Appendix tables in 'the case of off =site benefits: The
calculations are suinmarized.in Appendix Tables A -6, A -7, and A -8.
Heritage Commons would generate on -site net benefits *of $300,0001 during each
g g
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 educatin g public s n
school students living -in townhouses. These are annual
.,
amounts, in constant 2014 dollars. Total aiznual on -site benefits at the crud of'the 15 -year,
development program would come, to.$1.0 million each, year: Off -site' net, fiscal benefits
average' about $700,000 'each year, for a .total of $2.2 mil. lion .over' the 15 =year buildout
period. It should;-'be reiterated actual off -site benefits may lag behind on -site
development and impacts—d ue`,to give the market time to respond to rncreased demand
in the, County from Herifage Commons.
Total net fiscal benefits- on -site and off-site, would be in the $�] .0 million to $1.1
million range' "'for each five-year development phase in the 15 -year development
program., The c ommercial space would contribute about $900;000 in benefits over .
, ,
buildout, with the office space contributing $22 million. The total annual net fiscal
benefit for Heritage Commons,would be. $3.2 million: Total'on -site and off -site net fiscal
benefits are summarized in Table 28 by type of development component and five -year
phase (see Appendix tables).
Tahle'28`:
• � f
APP,EN;DIX A Review of .Deuelopment-Impacts Model
' Following is,our brief review of the .County's proposed D'evel`opinent Impact
Model (DIM), which' is a planning cool to provide guidance tc ,Cow ty' staff and elected
officials on the evaluation of iiew , developrent proposals and rezoning: There are a
nuo ber of factors described in the DIM that, in our•. judgment, are incorrect or poor
comparables and.thu's could'generate an;incori-ect conclusion for some reviews.
It is not the purpose,of`this',br-ief analysis and evaluation of the DIM to be critical,
rather; our purpose is to identify issues' that may require more review Following is a
list of report assuin_ptions that we would like to discuss;,; as'County officials, review our
attached FIA for Heritage Commons.
x 1. The DIM=uses `U.S. Cer sizs''data to determine 'the average household.-size
in the County anu,. the •nuiilber of students per ' housing unit by type:
While these are clearly correct data, they .often, do" .no't' represent
comparable data-, for -the evaluation, of a new ;development proposal;
particularly a. riiore >;' upscale new proposal compared. with the County
average. -
Using census data, for both cal'cilations includes all housing, types; :i.e;,
market,reni;'affordable, mature,'new; etc." For apartrent units, the older
and-Jo wer rent units often have ar► aliw�dance;,of three- bedroom units,
! Which ;in turn; generates, more, school children The" ,-compaf'ison of censu''s
data is therefore problematic in ithe eva luation -of a new. apartment
proposal without tluee' bedroom unit's,, in ,particular, The pupil
Ib e_ n: eratrr o - n ratio could be� much lower f or these higheri re
apartment
unitscom ared wiihthe Count average;
If ', ur analysis 'of the, DIM ,is correct, it does not include, all. faxes paid by,
;home. o#,ners o`r' renters. There is a wide, range of taxes, iV addition to . :.
real estate,, and' personal ,property taxes, -that accrue to 'the, County from
County households, These are shown in our FIA of Heri'tage!,Cgmmons.
°3. Nlostimportant n;the comparison of r "evenues ai d expenses'from County `
households is'theY off sit' expenditures from households, i.e .A the amount
of, money spent at,.local commercial establishments. This. expenditure.
,creates a ' spin-off' or ';ripple effect' of monies within a- junsdict'ion'
°' which ;generates a rati o_of 1.8 times the on -'site benefits of real., estate and
personnel taxes:
•
76
Th'i's ratio„ calculated; by officials ,of the Federal Bureau of Economic
Analysis, shows that total net revenues from new housing units is nearly
double the on -site benefits of real estate and personnel taxes.
hi conclusion; our analysis is intended to state that new housing units can
generate a net positive, economic impact for they County, depending. upon the value of
the home and incomes of the occuparits. This conclusion is not evident'in the DIM.
Additionally, retai_t.space and office space, in particular, im' nnot be successful
without a sizable and expanding,,population.. That can only cone .from.. the.addition of
new housing. The D IM. does. not calculate the amount of tax revenue from commercial
establishments'that are _derived from household expenditures.
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.
77
Table A -1. ,Detailed 'General Fund Budget
for FY2015 Showing. Share of
Fxpendit'ures Coming, From Local Funds' Frederick- County,
Virginia (current dollars)
GeneralaFund Functional.Areas
FY2015
FY2015
Expenditure'Budget
Adopted
Local Funds
GENERAL,GOV'T ADMINISTRATION
Board ,of Supervisors
$248;336,
$248,336
County Administrator
$702 53:9''
$702,539
County Attoine,y
$239,668
$239,668
Human Resources
$320,209
$320,209
hidependengAuditor` .
X66;000
$66,000
Commissioner of Revenue
$1,200;010
$1,000;106
Reassessment
$'1,93;948'
$193,948
Treasurer
$1.,1;79,735
$655,235
Finance
$763;469
$763,469
Information Technologies
11
$1, 191.,998
$1,,163,298
Management'iInformation System
$523,8`1 -0
$523,810
Other
$1,935,084
$1,935,084
Electoral Board;
$106,413
$1.06,413
General Registrar
$162,769
, 1'19 823
Subtotal
$8,834;088
$8,037,438
JUDICIAL ADMINISTRATION
Circuit_.Court
$61,300
$61,300
General District Court
$'15;.926
$15,926
Juvenile $ Ddmestic'Relations Court
$19,785
$1.9:;785
-Clerk of the Circuit Court '
$741,447
$242,1'85
Law Library
$J 2,0.00.
$0
Commonweal ,6s Attorney
$1,296,557
$833,377
Virginia, Witness Progran.
126 070
$26,070
Subtotal
$2,273,085
$1,198,643
PUBLIC SAFETY
Sheriff.
$11,241,5'15
$8,42678'62
Volunteer Fires Departments
$8421560
$642-,*W ,
Ambulance and'Rescue Services .
$395,200
$315,200
Public Safety Contributions
$5',4'67,925'
$5,467;925, :
JuvenileCourt;Probation'
$141,780
$2:1;780
lnspectionss
$1,090,017
$399;917
Fire and,
$7,871,989
$7,983,58,1
Public Safety,Corriniission
$1•:360,321
$1,293,321
.Su6iot4ll
$28,411,307
$24,551,146
79
Table, A4. , Detailed General Fund Budget for:FY2015 Showing Share of
Expenditures�Coining From Local Funds Frederick'County„
Virginia (current dollars), continued
General Fund Functional Areas FY2015 FY2015.
Expendifure'BUdget Adopted Local Funds
PUBLIC WORKS
Road Administiation
$28;000
$27,000
Street Lights
$43 ;000
$0
General Engineering
$356,788
$219,.788
Refuse Coliection
$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`706,
$518,831
Subtotal
$4,172'249
$3;3'12,9.68
HEALTH AND WELFARE
Local HealtbPepartnient
'$30:1 „000
$301,000
Northwestern Community -Service
$3`118,000
$3.18;000
Area Agency on A'gin'g
560;000
$60;000
Property Tax R'el►ef ;Elderly
$520,000
$520;000
SocialaServices,Adirunistration
$4,248,461
$2,1'41;614
Public Assistance,
$1,463,085.
$149,990
Subtotal
$6,910,546
$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
Clearbrook Parka
$346;984
$,145,484
Sherando Park
$359,534
$234,934
Regional Library'
80$ 0,000
800000; .
Subtotal
$5,530,713
$3;227,880'
COMMUNITY DEVELOPMENT
Planning'and Development
$ l ;098,754
$688,846
Economic Development Authority
$544,223
$543;973
-Zonirig'Board
$6,368
$6,368
•Buildingappeals Board •
$550
$550
N S.V. _R'egional Commission
$40-00
$43,000
Soil. and Water Conservation
$7,000
$7,000
Extension
:$225;00 7.
225 007
Subtotal
$1.,924;902
$1,5141744
80
Table A -1.1, Detailed General Fund Budget for FY2015 Showing;Share;of
Expenditures Coming
From Local Funds; Frederick. County,
Virginia (cureent dollars), continded
GenerahFund Funcfi'onA Areas
,FY2015
FY2015
Expenditure Budget
Adopted
Local Funds
I
COMMUNITY DEVELOPMENT
Planning'andDevelopment,
$1,098,754
$688;846
Economic De.velopnIent Authority
$544,223
$543,973
Zoning Board " -
$6,368 '
$6,368
Building.appeals:Board
$55,0
'$550
N.S.V. Regional Commi'ssidn
$4000
$43,000
Soil, and Water Conservation
$7,060
$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
$'141626,151
$14,626,1'-51
Transfer to County Debt' Service
$2,561,645
$2,561,645'.
Other Non,departhiental
$1,739;136
$1,739,136
Subtotal
$84;274,672
$84,274;672
Total General Fund
$142,387,562
$:129;664,595
So,urce:,:Adopte'd: Budget for FY2015, Frederick County, Virginia
Table A -2. •'Summhfrof Annual, Tax, Revenues„'County.Costs, and Net
Fiscal''B'enefit Creafed Off -s to '.by -the''Residential..Units at
Heritage;Coni ions, at B6ildout.(c6nstant$2014)
;.
Aiartments,
Townhouses,
Residential
.Impacts, -
Impacts,
- Impacts:
Real Estate Tax!*
$;1,04,320
$30,650`
$;134970.
Business Property Tax..
; :$86;670 '
$25,460
$112,130'
'BPOL Tax ''.
$81;900
$22;800.
$1.04,700
Retail Sales Tax
.$73;430
$24;910`
$98',340
Motel Tax
$1`2,'880:
$4,370
$1'7,250
Meals Tax
$65,100
$22;080•
$87,1,80
Motor Uehicle:rLieenses
.$16;840
$41-720
$21,560
Utility Tax,
$12,840
3 600
$1;6,446
Total Revenue
$453,980
$138,590 '
$592,570
Less Costs
= $146;59.0.
_ $41,090
7$187,680
Net.Fiscal: Benefit
$307;390
$97,500
,$404;890
Number Of'Units
$293
$656
-$337
83
Table A 3: Summary of Annual Tax.Revenues, County Costs; and Net
Fiscal Benefit.Created Off -site by the Non = residential
Components at Heritage Commons, at Buildout
(constant
..
Commercial
Office Non= residential
Impacts
'Impacts,
Im_J acts
Real Estate Tax $104,320
$349,240
$453,560.
Business Property Tax. , $86,670
$290,:1`40
,$376,810
BP.OL Tax $11,020
$961,280
$972,300
Retail Sales Tax` $-1..61,290
$21,040
$1821330
Motel. Tax $4,340
$71,780, ..
$761,120
.Meals Tax $130,53.0
$84,600
$215,130
Motor Vehicle Licenses $4,430
$56,380
$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 x$368,850
$1,386,720
$1,7755,570
Number of Sq. Feet $3.69
$3.08
$3.1'9
Net Benefit Per; S5. $104,320'
$349;240
$453,560
Sources.: Bureau ofoEconomic Deuelopment.,and:;Bureau
of Labor Statistics,
U.S. Department ofifComrrierce, Adopted FY2014 Budget for
Frederick County, Virginia, and S.
Patz & Associates, Inc.
83
Table A -4. Sutnniary of Annual Tax: Revenues,`County,Costs,!and Net
Fiscal Benefit Created Off -site by the, Residential and Non -
�residential .Comoonents:at:.Heritage Commons, at Buildout,
Fredenck County; Virginia (consfai t $2014)
Residential
Non= "residential. Total
Impacts
Impacts. fmpacts
Real Estate Tax $134,970
'$453,560 $588,530
Business Propef '7 $1 12,130
$3761,810 $488,940
BPOL Tax $1104,700
$972;300 ' $1,077,000
Retail Sales Tax. $98,340
$ 1 82,330 $280,670
Motel Tax $17,250
.$76, 120 $93,,370
Meals Tax $87,180
$215',130 $302,310
Motor Vehicle Licenses $21,,560
$60;810 $82,370
Utility Tax
$55,830 $72,270
Total Revenue $5:92,570
$2,392;890 $21-985,460
Less Costs - $1:87,680
- $637;320 - $825,000
Net Fiscal :Benefit 34.04,890
�� $- 1',;755,57.0 $214,60,460
Sources: Bureau of Economic Development
abd'Bureau of Labor Statistics,
U, -'.S, Department of Commerce, Adopted
F .2014 Budget for
Frederick County, Virginia, and S.
Patz &.-Associates, Inc.
1 .r.
l
84
Table A- 5. :Summary of All Annual On- site,and'Off=site:Impacts of Heritage
Commons by Type of Use on Site, at,Bitildout, Frederick
Cowi6,.Virginia "(eonstant $2014) '
Apartments
Townhouses
Residential
Total Tax Revenue
'$ I 199:1,230
$490,050
$2,48 1,280
Tax- supported�,10sts
- $1.,924,590_
-,$487,860
7$2,41.2,45,0.
Net - Fiscal, Benefit
$66;640
$2,190
$68,830
Units
1,050
150
1,200
Net' Benefit Per Unit
$63
$15'
y
Commercial
Office,
Non = residential
Total Tax Revenue:
$1,127,470
$3,243,460 ,,
$41370,930
Tax- supported Costs
-$2,20',570.
- $1,045,580 „
- $1;266,150
Net Fiscal Benefit
$966;900
$2,197;880
$3;104;780
Square Feet
1,00.,000
450,000
550,000
Net Benefit Per'S.F.
$9.07
$4.88
Residential
Non' - residential
Total
Total Tax Revenue,
$2,481,280
$4,370,930
$6,852;2'10
Tax- supported Costs
- $2,4:12,450
- $1,266,150
- $3;678;600,
Net Fiscal Benefit
-$68;830
$3,104,780.
$3, 173,610
Sources, Bureau of Economic Development and Bureau of Labor Statistics, U.S.
Department
of Commerce; Adopted FY20.14 Budget for Frederick
County, Virginia; and S. Patz & Asso'ciates, Inc.
85
Table A= 6._,Summa6`of On =site Net Fiscal B'enefits'for Each Development Compolient
for Each Phase:0"'f4he Development Program „Heritage: Commons.at
Buildout Erederick,County, Virginia (constant $2014)
Phases tst 5 yrs 2nd 5 Yrs 3rd 5 Yrs Total
86
Number of Apartment Units
350
3.50.'
350
1,050
Net Benefit at =$229 /,Unit
-$80,250
- $80,250
= $80,250
- $240,750
Number of Town houseUnits
1100
50
150
N'et Benefit -at - $635 /Unit
=$63,540
- $31,,770
- $95,31.0
Number of Commercial Sq: Ft.
50,000
25,000
25,000
100,000
'
Net Benefit at 55,38/SF
$269;030
$`134,5 -h0'
$13'4,5`1`0
$538,050
Number of Office Square Feet
1'00,000
175,000
175,000,
450,000
Net.Benefit at $1.80/SF
$180,260
$315;450
$3151450
$811,160
Total Net On -site Benefit
3305,500
$337.940;.
$369,710
$1;013,150
Source: S. Patz &' Associates, :Inc.,
86
Table A- 7.,Summary,of Off ° - site- Net,Fiscal Benefits for Each Development Component
;for Each.Phase of the ;Development Peogram, Heritage Commons-at
Buildout,!Frederick County,.Virginia (constant $2014),.
Phases
lst,5 yrs
2nd 5 Yrs,
3rd S.Yrs.
Total
Number of Apartment Units
350,
350'
35,80
1,050
Net Benefit at $293 /Uriit,
$1.02,460
$,102,460
$102,460
$307,390
Number of Townhouse Units
100
50
$2212.10
15.0
Net Benefit at $650/Unit
$65,000
$32,500
$1,460
$97,500
Number of Commercial' Sq. Ft:
50,000
25,000
25,000
100,000
Net Benefit at $5.69/8V
$184,425
$92,,213
$92,2:1,3
$368,850
Number of Office Square Feet
100;000
`175,000
175,000
450,000
Net.Benefit at $3.08/SF
$308,7160
$539,280.
$539,280
$1,386,720
Total Off -site Benefit;
$660,050
$766,450
$733,950
$2,1.60,460
Source: S. Patz &. Ass ociates, Inc
Source: +S. Patz & Associates,.Inc.
Table A -8.
Total On -site and Of`f -site Net Fiscal Benefits'by hase,.Heritaie
Commons at Buildout {constant$2014)
1st 5 Vrs
2nd 5 Yrs
3rd 5 Yrs
Total
Ap farrients
$2212.10
$22,2.10
$22,210
$66,640
Townhouses
$1,460
$730
$2,190
Commercial
'$453,455
$226,723
$226,723
$906,900
- Office
$488,420
$854,730
$8541730
$2;107,880
Total'Nef`Benefit• $965,550
$1,104,390
$7,103,660
$3,173,61.0
0
Source: +S. Patz & Associates,.Inc.