HomeMy WebLinkAbout03-24 Economic & Fiscal Impacts of Snowden Bridge
The Economic and Fiscal Impacts of
Snowden Bridge on Frederick County, Virginia
By
Stephen S. Fuller, Ph.D.
University Professor Emeritus
Founding Director of the Stephen S. Fuller Institute
George Mason University
Arlington, Virginia
Prepared for
Brookfield Properties
Fairfax, Virginia
May 2023
1
The Economic and Fiscal Impacts of
Snowden Bridge on Frederick County, Virginia
Executive Summary
Snowden Bridge is a 2,465-unit, 795-acre master-planned residential community
being developed in Stephenson (Frederick County), Virginia. Snowden Bridge’s first
phase includes 1,233 housing units. It began construction in 2007 and likely will be
built out in 2023. It includes 676 single-family detached homes, 557 townhomes,
and amenities including a pool and clubhouse and 10,000 square foot private day
care center. The plan for Snowden Bridge also provides for a 20-acre school site on
which the county constructed an elementary school for 500 students that opened in
2020 and 24-acre were set aside for a regional park that has yet to be developed by
the county.
Snowden Bridge’s Phase 2 is the focus of this economic and fiscal impact analysis. It
will consist of a mix of 1,232 housing units to include both single-family attached
and detached units as well as housing designed for and restricted to active adults in
a private gated community with its own pool, clubhouse, and recreational facilities.
Additionally, Phase 2 will include 250,000 square feet of commercial space for retail
and office uses. Amenities will include a pool and fitness center for use by residents
of both Phases 1 and 2. While the focus of the analyses presented herein are on
Phase 2 of Snowden Bridge, the report will also present the economic and fiscal
impact analyses of Phase 1 as it approaches completion for comparative purposes.
Inputs to the project review process by Frederick County are the economic and
fiscal impacts of proposed residential community to establish how its development
would contribute to the current and future benefit of the county. Economic impacts
include the income stream and jobs that will be generated during the construction
period of Snowden Bridge and the annual flows of income and jobs that will be
supported following the completion of construction and occupancy of its new
housing units. Fiscal impact analysis has the objective of determining what the fiscal
consequences of new residential land uses might be before project approval—will
these be a burden to the county’s budget and existing taxpayers, generating more
demand on county-funded services (county expenditures) than the off-setting
revenues it would generate, or will the proposed project be a fiscal asset to the
county, generating more revenues than expenditure demand on the county once the
project is completed and fully operational?
The Economic Impacts of Snowden Bridge on Frederick County
The analyses presented in this report confirm that the development of both phases
of Snowden Bridge would generate significant positive economic impacts during
their extended construction periods and would continue to generate important
economic benefits for Frederick County on an annual basis over its life span due to
the local spending at retail and consumer service establishments by the 2,465 new
2
households attracted to Frederick County to reside in this new residential
community. These economic impacts are summarized in Table 1.
With an aggregate hard cost and soft cost multiplier of 1.5435, the total direct
outlays of $769.4 million (all dollar values are for 2023) for the full development of
Snowden Bridge, Phase 1 and Phase 2 as proposed including site development and
on-site infrastructure, soft and hard costs for all buildings, and landscaping and
amenities, would contribute $1.188 billion to Frederick County’s economy over the
full construction period. These direct outlays would support a total of 5,319.3 full-
time, year-round equivalent jobs worldwide, and generate $307.3 million in new
personal earnings accruing to an estimated 3,457.5 workers residing within
Frederick County.
Table 1
Summary of the Economic and Fiscal Impacts of
Snowden Bridge, Phase I and Phase 2, on Frederick County
(economic impacts in millions of 2023$s, fiscal impacts in 2022$s)
___________________________________________________________________________________________
Economic Impacts1 Direct Total Personal Total Jobs
Outlays Output Earnings Supported
___________________________________________________________________________________________
Phase 1
Construction Outlays2 $323.0 $499.3 $128.8 2,228.7
Post-Construction3 $57.3 $81.6 $20.5 490.7
___________________________________________________________________________________________
Phase 2
Construction Outlays2 $446.4 $688.3 $178.5 3,090.6
Post-Construction3 $47.2 $66.8 $17.0 384.3
___________________________________________________________________________________________
Total Snowden Bridge
Construction Outlays2 $769.4 $1,187.6 $307.3 5,319.3
Post-Construction3 $104.5 $108.4 $37.5 875.0
___________________________________________________________________________________________
Fiscal Impacts Revenues - Expenditures = Net Impact
___________________________________________________________________________________________
Phase 1 $3,800,841.30 - $5,991,975.40 = - $2,191,134.10
Phase 25 $4,955,575.20 - $3,654,823.90 = +$1,300,751.30
___________________________________________________________________________________________
Source: calculations by author
1see Table 5b, page 11 for heading definitions.
2hard and soft costs including site development, infrastructure, buildings, landscaping, amenities.
3post-construction spending by builder for marketing and management during project closeout.
4annual resident spending potential for locally supplied retail goods and personal services.
5included both residential and commercial land uses.
3
Additional annual economic benefits will accrue to Frederick County with the
completion of Snowden Bridge and many of these benefits will continue to recur
annually. These economic benefits will be generated by Brookfield Properties’ post-
construction spending to market, sell, and maintain the community through close
out and the new annual spending potential generated by the 2,465 households
residing in Snowden Bridge; this annual spending potential for local retail goods and
consumer services is estimated to total $49.0 million. This new annual local
spending by Snowden Bridge residents, with an aggregate multiplier of 1.45, would
contribute a total of $71.0 million to the county’s economy annually and support a
total of 472.4 full-time, year-round equivalent jobs, of which 307 jobs would be held
by workers residing in Frederick County with annual personal earnings of $17.1
million.
Total post-construction spending of $55.5 million for marketing, sales and
management at Snowden Bridge for both phases over their respective closeout
periods that extend throughout both construction phases to project completion.
This spending will contribute a total of $77.4 million to the county’s economy over
this period, generate new local labor income of $20.4 million and support 402.6 full-
time, year-round equivalent jobs locally and regionwide of which 261.7 would be
held by Frederick County resident workers.
Fiscal Impacts of Snowden Bridge on Frederick County
The fiscal impact analysis presented herein found that had Phase 1 of Snowden
Bridge been fully occupied in FY 2022 with 4,485 residents, including 446 student-
age children, it would have generated a net fiscal cost totaling $2,191,134.10 or a
fiscal cost of $488.55 per capita. This compares to a fiscal cost of $668.21 per capita
for existing county residents.
The fiscal impact analysis for Phase 2 of Snowden Bridge as proposed found that
had it been fully developed and occupied, its 2,895 residents, including 182 school-
age children, it would have generated a net fiscal cost of $881,388.20 or a per capita
fiscal cost of $304.45. However, when combined with the fiscal benefit of
$2,182,139.24 of Phase 2’s 250,000 square feet of commercial development, the
land uses proposed for Phase 2 generate an overall net fiscal benefit of
$1,300,751.24 or $326.08 for each resident and each job housed on site.
The answer to the central fiscal question, would the residential and commercial uses
proposed for Phase 2 of Snowden Bridge generate a fiscal burden or a benefit to the
Frederick County, is that the 1,232 single-family housing units and their 2,895
residents, including 182 school-age children and the proposed 250,000 square of
commercial land use, combined would have generated a positive fiscal impact on the
county in FY 2022. Had Phase 2 of Snowden Bridge existed and been fully occupied
in FY 2022, it would have represented a net contribution of $1,300,751.30 to the
Frederick County budget for an average fiscal benefit of $326.08 per resident and
on-site job.
4
The Economic and Fiscal Impacts of
Snowden Bridge on Frederick County, Virginia
Introduction
The objective of the economic and fiscal analyses reported herein is to calculate the
impacts of Phase 2 of the Snowden Bridge, a master-planned residential community
being developed in Stephenson (Frederick County), Virginia. As proposed, Phase 2
will consist of a mix of 1,232 housing units to include both single-family attached
and detached units as well as housing designed for and restricted to active adults in
a private gated community with a pool, clubhouse, and recreational facilities.
Additionally, Snowden 2 will include 250,000 square feet of commercial space for
retail and office uses. Amenities for Snowden 2’s non-active adult units will include
a pool and fitness center that will be designed to serve Snowden Bridge’s residents
in both Phases 1 and 2.
Phase 1 of Snowden Bridge includes 1,233 housing units and began construction in
2007 and likely will be built out in 2023, with 676 single-family detached homes,
557 townhomes, and amenities including a pool and clubhouse and 10,000 square
foot private day care center. The plan for Snowden Bridge also provides for a 20-
acre school site on which the county constructed an elementary school for 500
students that opened in 2020 and 24-acres were set aside for a regional park that
has yet to be developed by the county.
While the focus of the analyses presented herein are on Snowden Bridge’s Phase 2,
for comparative purposes this report will also present the economic and fiscal
impact analyses of Phase 1 as it approaches completion. The results of these
economic and fiscal impact analyses will provide important information to public
sector professionals and decision-makers regarding the magnitudes of economic
benefits and fiscal impacts that will be generated by the development of Snowden
Bridge’s Phase 2.
The Economic and Fiscal Impacts of Residential and
Non-Residential Land Uses on Frederick County
The impact of Snowden Bridge’s Phase 2 on Frederick County’s economy is based on
the sources of these economic flows and the timing of when these would occur.
These economic impacts are grouped as follows:
(1) Construction-phase benefits that include soft and hard costs for all buildings and
infrastructure, site development, and related expenditures resulting from the
development of Phase 2 and the impacts these will have on the Frederick County’s
gross county product (GCP) or its total output, the new personal earnings generated
to the benefit of workers residing in Frederick County, and the overall employment
effects supported by this spending; and,
5
(2) Post-construction impacts that will be generated by the annual household
spending potential of the 1,232 new households residing in Phase 2 and the post-
construction expenditures associated with the marketing, sales and management of
Phase 2 between completion of construction and project closeout.
The values used in the economic impact analysis are expressed in 2023 dollars and
reflect estimated construction and post-construction outlays, and sales data
provided by Brookfield Properties. Multipliers used to calculate total output effects,
personal earnings generated and jobs support by the direct expenditures associated
with residential and non-residential construction and post-construction outlays are
provided by the U.S. Bureau of Economic Analysis for Frederick County and reflect
the most recently released values (March 2023).
The fiscal impact analysis is based on the expenditure and revenue data presented
in the most current Frederick County Comprehensive Annual Financial Report
(CAFR). All data utilized in this fiscal analysis are for FY 2022, the most current and
available at this time. The first step in this analysis is to divide the county’s
expenditures and revenues into those that serve or are generated by the residents of
the county (its population) and those that are related to or generated by the
county’s non-residential functions, including tax exempt properties, with these
being assigned to the workers (jobs) who work within the county regardless of
place-of-residence. This assignment of expenditures (demands for county services)
and revenues is expressed for the county’s 121,609 residents (2022 U.S. Census
estimate) on a per capita basis and for the county’s non-residential functions based
on its estimated 35,957 at-place jobs (2nd Quarter 2022, BLS) across all sectors
(private and public) on a per employee basis.
This analysis of the county’s revenues in FY 2022, including all taxes, fees, permits,
fines, user charges, and intergovernmental transfers, found that these were divided
between residential and non-residential functions, respectively, on a 44.5% and
55.2% basis. An analysis of the county’s expenditures (demand for services) for FY
2022 found that these were distributed between residential and non-residential
functions, respectively, on an 90.3% and 9.7% basis. These differences in the
percentage shares for revenues and expenditures between residential and non-
residential land uses explain why, on average, Frederick County’s existing
residential uses generate a fiscal cost to the county and existing non-residential land
uses generate a fiscal benefit to the county.
As the county’s operating expenditures include debt service outlays (and perhaps
for other reasons), the county’s revenues and expenditures were not initially
balanced and required transfers and other adjustments to ultimately produce a
balanced operating budget (in FY 2022 revenues exceeded expenditures; the budget
ended the year with a surplus). Annual capital outlays are not included in this fiscal
analysis as these vary from year to year. However, the payment of principal and
interest on accumulated debt obligations are included in the operating budget and
allocated in the fiscal impact analysis. The results of this countywide fiscal analysis
are presented in Table 2.
6
Table 2
Fiscal Flows in Frederick County for
Residential and Non-Residential Land Uses, FY 2022
(in 2022 dollars)
_______________________________________________________________________________
Source Per capita1 Per Job2
_______________________________________________________________________________
Expenditures:
County-wide average $1,382.18 $499.69
Education Only 759.52
All Other Expenditures 622.66
Revenues:
Countywide average $685.19 $2,856.95
Real Property 430.37 574.51
All Other Sources3 254.82 2,282.45
_______________________________________________________________________________
Net Fiscal Impact - $696.99 $2,357.26
_______________________________________________________________________________
Source: calculations by author
1the county’s population in 2022 totaled 121,609 (U.S. Census estimate for 2022),
includes the City of Winchester.
2the county’s at-place employment in 2nd quarter 2022 totaled 35,957 (BLS).
3includes property tax, other local taxes and permits, charges for services, inter-
governmental (state and federal) transfers and others.
This analysis of the FY 2022 fiscal data found that on average each resident of
Frederick County cost the county $1,382.18 for the services provided during FY
2022. This value represents the cost of making county-funded services available to
all residents whether or not they used these services during the year. The largest
single source of county expenditures, accounting for 55 percent, was for public
education. While on a per capita basis this education cost (this is all assigned to the
county’s population as they are the direct beneficiaries of these services) was
$759.66 per capita, for the 12,876 students enrolled in the county’s public schools in
2022 the county’s per student cost of education was $7,173.42.
On average, during FY 2022 each resident of Frederick County generated revenues
directly or indirectly (e.g., intergovernmental transfers) that totaled $685.19, with
real property taxes accounting for $430.37 or 62.8 percent of this total. Subtracting
expenditures from revenues yields a per capita annual deficit of $696.99; that is,
each county resident cost the County $696.99 in FY 2022.
On a per job basis in Frederick County, non-residential land uses generated
revenues averaging $2,856.95; real estate taxes accounted for 20.1 percent of these
non-residential revenues. In comparison, non-residential land uses cost the county
$499.69 for services on a per (at-place) job basis while generating revenues of
7
$2,856.95 per job, resulting in a fiscal benefit of $2,357.26; that is, each job in the
county resulted in a positive fiscal impact of $2,357.26. This fiscal benefit, in effect,
offsets the fiscal cost generated by the county’s residential uses (and tax-exempt
properties), as measured on a per capita basis.
Snowden Bridge: Land Use, Population and Jobs
The Snowden Bridge consists of two phases: Phase 1 includes 1,233 single-family
housing units (detached and townhouse) and Phase 2 is planned to include 1,232
housing units: 236 single-family detached and 256 townhouse units, 740 active
adult (age restricted) units, and 250,000 square feet of commercial space for retail
and office uses plus supporting amenities. The estimated construction costs of
Snowden Bridge—hard costs including site development, infrastructure, and
amenities—are presented in Table 3.
Table 3
Snowden Bridge: Land Use Profile
(in millions of 2023 dollars)
________________________________________________________________________________
Unit Type Units Construction Hard Costs1
_______________________________________________________________________________
Snowden 1 1,233 $302.153
Snowden 2 1,232 $393.760
Totals 2,465
Commercial 250,000 sf $23,000
________________________________________________________________________________
Source: Brookfield Properties
1includes hard costs for all structures and infrastructure, site development costs and
amenities but excludes soft costs, land value, taxes, insurance, permits and financing costs.
The housing units planned for Phase 2 will accommodate a total of 2,895 residents
at full occupancy, including 182 school-age children. Estimates for Phase 1 place its
total built-out population at 4,485, including 446 school-age students. These new
households will place demands on publicly funded services provided by Frederick
County as well as generate revenues to the benefit of the county. Additionally,
Snowden Bridge’s new residents will support economic activity that will benefit
Frederick County’s local retail and consumer and professional services
establishments.
The population profile for Snowden Bridge shown by unit type in Table 4a. These
household sizes are based on profiles associated with new housing in the county
while school-age generation rates were provided by Frederick County. These
student generation rates reflect countywide averages and are not specific to the unit
sizes and values in Snowden Bridge.
8
Table 4a
Snowden Bridge: Estimated Population and School-Age Children1
________________________________________________________________________________
Unit #/ Type Persons/ Total School-Age
Unit Residents Children2
________________________________________________________________________________
Snowden 1
676 Single-family Detached 3.75 2,535 252
557 Single-family Attached 3.5 1,950 204
Totals: Snowden 1 3.64 4,485 446
Snowden 2
236 Single-family Detached 3.54 836 88
256 Single-family Attached 2.87 734 94
300 Active Adult (2100 sf) 1.85 555 0
440 Active Adult (1900 sf) 1.75 770 0
Totals: Snowden 2 2.35 2,895 182
Totals: Snowden Bridge 2.81 7,380 628
________________________________________________________________________________
Sources: Frederick County Student Generation, County Planning; author
1resident population and households based on 100% occupancy.
2based on Frederick County countywide calculations irrespective of unit sizes.
The plan for Phase 2 provides for 250,000 square feet of commercial land uses. At
the time of the initial development plan was formulated and approved there was
little commercial space available designed to support the new market demands of
Snowden Bridge’s new households. Over the construction period of Phase 1 some of
these market demands have been fulfilled by the development of new commercial
services elsewhere in the county. With changing markets for retail and office users,
the mix of commercial users that would occupy the proposed 250,000 square feet of
commercial space planned for Phase 2 can only be generalized at this time as
outlined in Table 4b.
Table 4b
Snowden Bridge, Phase 2: Estimated On-Site Employment
________________________________________________________________
Non-Residential1 Square Feet/Job Total Jobs
________________________________________________________________
Retail @ .25 = 62,500sf 475 132
Office @ .75 = 187,000sf 195 962
Total = 250,000sf 1,094
_______________________________________________________________
Sources: Brookfield Properties, author
1illustrative mix of commercial uses that could include medical,
personal services, educational, non-profit, specialized retail and
full range of local-serving and non-local serving office uses.
9
The Economic Impact of Snowden Bridge on Frederick County
The economic impacts of Snowden Bridge are measured by the magnitude of direct
expenditures generated by (1) the construction of its structures and supporting
infrastructure and amenities including site development and infrastructure, soft and
hard costs, landscaping and amenities, and (2) the builder’s operating outlays for
marketing, sale, and management during the project’s close-out phases and the
annual post-construction spending of its households for goods and services in local
business establishments. The multipliers, provided by the Bureau of Economic
Analysis, RIMS II, for residential and non-residential construction and site
development spending and related soft costs, and local spending for retail and
consumer services spending by the 2,465 new households residing in Phases 1 and
2 of Snowden Bridge and the builder’s post-construction outlays for marketing,
sales, and management in Frederick County are used to calculate the full economic
impacts of this direct spending. These impacts are presented in Table 5a for both
phases of Snowden Bridge and the economic impacts for each phase are presented
independently in Table 5b.
The economic impacts show that the projected total outlays of $769.4 million for the
full development of Phases 1 and 2 of Snowden Bridge will generate $1.19 billion in
total contribution to Frederick County’s Gross County Product (GCP) during the full
construction period, reflecting a total output multiplier of 1.5435. This direct
construction spending will also generate new personal earnings (labor income)
totaling $307.3 million that would support a total of 5,319.3 full-time, year-round
equivalent jobs locally as well as throughout the Commonwealth and beyond, over
the full construction period of which an estimated 3,457.5 or 65 percent of these
workers (full-time, year-round equivalent) would be residents of Frederick County.
Snowden Bridge will continue to generate economic benefits following the
completion of construction. These benefits will include outlays by the builder for
marketing, sales and project management during the project close-out period and
annual market potential for locally provided retail goods and personal services from
the new spending by Snowden Bridge’s 2,465 new households.
Post-construction outlays by the builder would total $55.5 million. With a multiplier
of 1.395, these outlays would generate a total of $77.4 million to the county’s
economy during the post-construction periods. This spending would generate $20.4
million in new personal earnings accruing to an estimated 261.7 workers (full-time,
year-round jobs) residing in Frederick County and support a total of 402.6 full-time,
year-round equivalent jobs across the broader economy.
10
Table 5a
The Economic Impacts of Snowden Bridge Phases 1 and 2
on Frederick County (in millions of 2023 dollars)
________________________________________________________________________________________
Sources by Direct Total Personal Jobs
Parcel Outlays Output1 Earnings2 Supported3
_______________________________________________________________________________________
Construction Outlays
Hard Costs* $725.91 $1,121.13 $281.00 4,966.5
Soft Costs** 43.50 66.46 26.31 352.8
Totals $769.41 $1,187.59 $307.31 5,319.3
Post-Construction
Post-Construction*** $55.50 $77.42 $20.38 402.6
Resident Spending**** 48.95 71.01 17.12 472.4
Totals $104.45 $148.43 $37.50 875.0
_______________________________________________________________________________________
See Table 5b for footnotes.
The spending by Snowden Bridge’s residents in the county’s economy will have
important economic benefits that often are overlooked. The magnitude of
residential economic benefits is determined by their income levels with an
estimated 24 percent of this household income, on average, being spent on locally
provided retail goods and consumer services. These economic benefits generated by
Snowden Bridge’s new residents will recur annually and continue contributing to
the county’s economic vitality by supporting local businesses and the local
workforce over the long term. The annual impact of this new household spending on
Frederick County’s economy is presented in Table 5a for the sum total of both Phase
1 and Phase 2 and in Table 5b that presents the economic impacts of each Phase
independently.
Based the weighted average household incomes of Snowden Bridge’s residents (in
2023 dollars), these new households represent new market potential totaling $49.0
million annually for Frederick County’s retail and consumer service businesses and
have an overall $71.01 million annual impact on the county’s economy reflecting a
multiplier of 1.45. This new spending will generate $17.12 million in new personal
earnings (labor income) to the benefit of an estimated 307.1 workers residing in
Frederick County and support a total of 472.4local, regional, and national jobs (full-
time, year-round equivalent) annually across multiple sectors including retail trade
and consumer and business services, health care, restaurants and recreational
services, and local government.
11
Table 5b
The Economic Impacts of Snowden Bridge By Phase
on Frederick County (in millions of 2023 dollars)
________________________________________________________________________________________
Sources by Direct Total Personal Jobs
Parcel Outlays Output1 Earnings2 Supported3
________________________________________________________________________________________
Snowden 1
Construction Outlays
Hard Costs* $302.15 $467.52 $116.21 2,060.0
Soft Costs** 20.80 31.78 12.58 168.7
Totals $322.95 $499.30 $128.79 2,228.7
Post-Construction
Post-Construction*** $25.900 $36.13 $9.51 187.9
Resident Spending**** 31.372 45.51 10.97 302.8
Totals $57.272 $81.64 $20.48 490.7
Snowden 2
Construction Outlays
Residential
Hard Costs* $393.76 $609.26 $151.44 2,684.5
Soft Costs** 22.70 34.68 13.73 184.1
Commercial*** 30.00 44.35 13.35 222.0
Totals $446.46 $688.29 $178.52 3,090.6
Post-Construction
Post-Construction**** $29.60 $41.29 $10.87 214.7
Resident Spending***** $17.58 25.50 6.15 169.6
Totals $47.18 $66.79 $17.02 384.3
________________________________________________________________________________________
Sources: Brookfield Properties; Bureau of Economic Analysis, RIMS II; author
*hard costs, site development and infrastructure excluding land cost.
**soft costs—legal, A&E, consultants, project management; excludes fees, financial costs,
and insurance.
***combined soft and hard costs
****total post-construction spending by builder including marketing, sales and management.
***** local retail spending by residential households based on 24% of total household income
being available to spend locally for retail goods and consumer services.
1the total value of goods and services generated directly and indirectly because of
construction spending, annual operating outlays, and local spending in the Frederick
County economy.
2the additional earnings generated within the Frederick County economy accruing to
workers residing in the county from outlays for construction and subsequent post-
construction outlays and resident spending.
3the total full-time, year-round equivalent jobs supported locally and elsewhere by the
spending and re-spending of direct expenditures for construction and post-construction.
12
The Fiscal Impact of Snowden Bridge on Frederick County
The framework for the fiscal impact analysis of Snowden Bridge is provided by the
per capita and per employee fiscal impacts calculated for Frederick County based on
its FY 2022 comprehensive annual financial report (CAFR), as summarized on Table
2. These per capita averages for the county’s expenditures and revenues provide
the basis for calculating the fiscal impact of Snowden Bridge’s housing mix, number
residents and estimated school-age children. The results of the fiscal impact analysis
are presented for each phase of Snowden Bridge separately in Table 6.
There are three key drivers of Snowden Bridge’s fiscal impact:
(1) the number of residents residing in the 2,465 housing units proposed for
Snowden Bridge—1,233 units in Phase 1 and 1,232 units in Phase 2—when
completed and fully occupied, including an estimated 446 school-age
children in Phase 1 and 182 school-age children in Phase 2, who are in
residence and attending county public schools thereby placing demands
(real and potential) on the county’s budget;
(2) the number of on-site jobs to be housed in the 250,000 square feet of
commercial space delivered in Phase 2; and,
(3) the county’s taxes and related revenues that are generated by the residents
residing at Snowden Bridge and the 250,000 square feet of commercial space
including their projected real estate tax revenues reflecting the full value of
its 2,465 new homes and the market value of the commercial space reflecting
the amenities and other qualities of a planned community.
The fiscal impact analysis for Snowden Bridge’s Phase 2, both the planned 1,232
residential units and 250,000 square feet of commercial uses, found it would have
generated a net positive fiscal impact of $1,300,751.24 on the Frederick County FY
2022 budget had these housing units and commercial space existed and been fully
occupied during that fiscal year. Phase 2’s residential units would have generated a
negative fiscal impact of $881,388.20 or -$304.45 per capita while Phase 2’s
proposed commercial uses would generated a positive fiscal impact of
$2,182,139.44 or +$1,994.64 per on-site job. Combined, Phase 2’s residential and
commercial land uses would have generated a per capita/per job positive fiscal
impact of +$326.08. in FY 2022 had Phase 2 been completed and fully occupied.
13
Table 6
Fiscal Impact of Snowden Bridge on Frederick County in FY 2022
(in 2022 dollars)
________________________________________________________________________________
Source Per capita Total
Fiscal Impacts Fiscal Impacts
________________________________________________________________________________
Snowden 11
Expenditures $1,336.00 $5,991,975.40
Education 713.34 3,199,345.30
Other Expenditures 622.66 2,792,630.10
Revenues $847.45 $3,800,841.30
Real Estate 592.63 2,657,973.60
Other Sources 254.82 $1,142,867.70
Net Fiscal Impact - $488.55 - $2,191,134.10
Snowden 2-Residential2
Expenditures $1,073.63 $3,108,163.10
Education 450.97 $1,305,562.40
Other Expenditures 622.66 1,802,600.70
Revenues $769.18 $2,226,774.90
Real Estate 514.36 $1,489,071.00
Other Sources 254.82 737,703.90
Net Fiscal Impact - $304.45 - $881,388.20
Snowden 2-Non-Reisdential3
Expenditures $499.69 $546,660.86
Revenues $2,494.33 $2,728,800.30
Real Estate 211.88 $231,800.00
Other Sources $2,282.45 $2,497,000.30
Net Fiscal Impact $1,994.64 $2,182,139.44
Snowden 2 Total Net Impact $326.08 $1,300,751.24
________________________________________________________________________________
Source: calculations by author
1based on a resident population of 4,485, including 446 school-age children.
2based on a resident population of 2,895, including 182 school-age children.
3based on 1,094 on-site jobs.
Summary of Findings
Snowden Bridge is a 2,465-unit, 795-acre master-planned residential community
being developed in Stephenson in Frederick County, Virginia. As planned, it would
offer a mix of single-family detached and attached housing units including 700
active adult units in a gated community and 250,000 square feet of commercial
space in Phase 2. Because of its substsntial construction outlays extending over a
lengthy timeframe and the new market potential of the 2,465 new households who
would reside there, Snowden Bridge would generate significant economic impacts
to the benefit of Frederick County. Snowden Bridge would continue to generate
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important economic benefits for Frederick County on an annual basis over its life
span resulting from the spending by its new residents at local retail and consumer
service establishments. Additional important economic benefits would flow from
post-construction spending during the project’s closeout phase. These economic
impacts are summarized in Table 7.
With an aggregate construction multiplier of 1.5435, the total of $769.4 million in
direct outlays (in 2023 dollars) for the construction of Phases 1 and 2 of Snowden
Bridge, including site development and on-site infrastructure, soft and hard costs for
2,465 housing units and related community amenities, and landscaping and 250,000
square feet of commercial space in Phase 2, would contribute a total of $1.19 billion
to Frederick County’s economy, its gross county product, over Snowden Bridge’s full
construction period. Over the full construction period, these outlays would support
a total of 5,319.3 full-time, year-round equivalent jobs locally, in the Commonwealth
of Virginia and nationally while generating $307.3 million in new personal
earnings—labor income—that would accrue to and support an estimated 3,457.5
workers residing within Frederick County.
Post-construction outlays generated by Snowden Bridge will continue to benefit the
county’s economy. Over the post-construction periods for Phase 1 and Phase 2, an
additional $55.5 million will be spent locally for the marketing, sales, and
management of the project by its developer. This spending will contribute a total of
$77.4 million to the county’s economy, generate $20.4 million in personal earnings
that would be realized by workers residing in the county and support a total of
402.6 full-time, year-round equivalent jobs.
Snowden Bridge’s 2,465 new households represent a significant source of new
spending power in the county that will recur annually for the lifetime of Snowden
Bridge. This new local spending potential would total $49.0 million annually (in
2023 dollars), contribute a total of $71.0 million to Frederick County’s economy
annually, support 472.4 full-time, year-round equivalent jobs with 307.1 of these
jobs being held by worker residing within the county.
Snowden Bridge’s fiscal impacts were found to vary reflecting the mix of housing
units in Phases 1 and 2 and commercial space planned for Phase 2. With 1,233
housing units in Phase 1 representing 4,485 new residents including 446 school-age
children, the estimated demand for county-funded services in FY 2022 would have
totaled $5,991,975.40, with education accounting for $3,1999,345.30 or 53.4
percent of these annual expenditures. With the revenues generated by the residents
of Phase 1 totaling $3,800,841.30, the net negative fiscal impact of Phase 1 was
shown to be $2,191,134.70. This fiscal cost on a per capita basis totaled $488.55
which is approximately 25 percent smaller than the per capita fiscal cost, $668.21,
of the county’s current residents.
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Table 7
Summary of the Economic and Fiscal Impacts of
Snowden Bridge, Phase I and Phase 2, on Frederick County
(economic impacts in millions of 2023$s, fiscal impacts in 2022$s)
___________________________________________________________________________________________
Economic Impacts1 Direct Total Personal Total Jobs
Outlays Output Earnings Supported
___________________________________________________________________________________________
Phase 1
Construction Outlays2 $323.0 $499.3 $128.8 2,228.7
Post-Construction3 $57.3 $81.6 $20.5 490.7
___________________________________________________________________________________________
Phase 2
Construction Outlays2 $446.4 $688.3 $178.5 3,090.6
Post-Construction3 $47.2 $66.8 $17.0 384.3
___________________________________________________________________________________________
Total Snowden Bridge
Construction Outlays2 $769.4 $1,187.6 $307.3 5,319.3
Post-Construction3 $104.5 $108.4 $37.5 875.0
___________________________________________________________________________________________
Fiscal Impacts Revenues - Expenditures = Net Impact
___________________________________________________________________________________________
Phase 1 $3,800,841.30 - $5,991,975.40 = - $2,191,134.10
Phase 25 $4,955,575.20 - $3,654,823.90 = +$1,300,751.30
____________________________________________________________________________________________
Source: calculations by author
1see Table 5b, page 11 for heading definitions.
2hard and soft costs including site development, infrastructure, buildings, landscaping, amenities.
3post-construction spending by builder for marketing and management during project closeout.
4annual resident spending potential for locally supplied retail goods and personal services.
5included both residential and commercial land uses.
Phase 2 of Snowden Bridge, as proposed with its 1,232 housing units including 700
active adult units, has (1) fewer residents in total than Phase 1 due to its smaller
average household sizes and (2) fewer school-age children. Furthermore, Phase 2
includes 250,000 square feet of commercial land use that would generates
significantly more revenues than it generates in expenditure demand to the benefit
of the county’s budget. Education expenditures attributable to Phase 2 represent
only 35.7 percent of Phase 2’s total county-based expenditures, well below Phase 1’s
53.4 percent. The real estate tax value of Phase 2 housing units is higher than for
Phase 1 housing units due to it reflecting higher construction and development
costs; Phase 1 was constructed between 2007 and 2023 thereby reflecting lower
costs and valuations. The combined fiscal impacts for the residential and
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commercial uses proposed for Snowden Bridge’s Phase 2, if Phase 2 had been
completed and fully occupied in FY 2022, would have been positive $1,300,751.30.
The answer to the central fiscal question, would the residential uses proposed for
Snowden Bridge’s Phase 2 generate a burden or a benefit to the Frederick County
budget, is that its mix of 1,232 single-family housing units and their 2,895 residents,
including 182 school-age children, would have generated a positive fiscal impact on
the county. Had Snowden Bridge’s Phase 2 been built out and been fully occupied in
FY 2022, it would have represented a net benefit of $1,300,751.30 to the Frederick
County budget.
Appendix: Measuring Fiscal Impacts
Frederick County’s FY 2022 Comprehensive Annual Financial Report provides the
basis for the fiscal impact analysis as its audited expenditures and revenues provide
the best available information on the distribution of public services and their
beneficiaries and the sources of Frederick County’s revenues. Fiscal data cannot be
accurately projected into the future as both the future patterns of public service
demands and the levels of revenues are subject to annual change: as the population
grows and its spending patterns change, as the economy slows down or accelerates,
as levels of local public services vary, and as the magnitudes of intergovernmental
transfers change. Given these uncertainties, the best practice for assessing fiscal
impact is to insert an existing or proposed project into the most recent budget year
(FY 2022) and calculate the budgetary impact it would have had had it existed and
been fully occupied, contributing revenues and placing demands on public services
like those of other residents and businesses in Frederick County during that year.
This analysis distinguishes between the revenues and expenditure demands place
on the Frederick County budget by its residents and by its non-residential functions;
that is, its business activities (including tax-exempt properties) and their
employment base. This allocation of fiscal flows between residents and non-
residential functions (as expressed on a per capita and per employee basis) assigns
revenues and expenditures as averages although it is recognized that some
residents and some businesses demand more services from the county than other
residents and businesses and, similarly, some residents generate more revenues
than others as do some businesses, while others may be largely exempt from taxes
(e.g., county-owned properties, churches). Still, calculating the average per capita
cost of providing services to the county’s residents and its businesses (on a per
employee basis) and the per capita revenues generated by residents and businesses
(on a per employee basis) permits the actual (or potential) fiscal impact of any
project—existing or proposed—to be measured using Frederick County’s current
expenditure and revenue structure.
Most importantly, this analysis will show is that not all residential projects will have
the same fiscal impact. It will show whether these fiscal impacts are positive or
negative as well as the magnitudes of these fiscal impacts. Where specific revenue
and expenditure determinations for a project cannot be differentiated from the
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countywide averages (e.g., cost of General Government), these countywide averages
can be used in the equation.
But where a specific expenditures or revenue flows can be estimated for the
proposed mix of land uses and especially for residential structures (e.g., real estate
tax revenues, public school per student costs), these can be substituted for
countywide average costs per capita or per job to reflect the differences between a
specific project’s land use mix and quality of construction and other residential and
commercial properties in Frederick County. The results of this fiscal analysis will
provide public officials a definitive answer to the question: will the proposed project
and its proposed mix of residential and commercial uses be a fiscal asset or a fiscal
burden to Frederick County?
Several underlying assumptions are reflected in the calibration and application of
this fiscal model. The principal assumption is that all residents and workers working
within the county have access to the public services provided and funded by the
county and therefore their allocated share of the related costs of providing these
services should be considered the average cost (per capita or per job) and not be
based on actual demand. The provision of these services as and when needed
supports using average costs or expenditure demand.
For proposed projects, the expenditure demand placed on the county’s annual
operating budget will be determined by multiplying the average (per capita or per
job) costs by the number of residents proposed to live in the project based on
average household sizes for the types and tenure type of the units existing or
proposed for the project.
School-age children generation rates developed by Frederick County are utilized in
the absence of an actual count of school-age children living in a similarly designed
and located project even through these rates would be expected to vary depending
on the size and number of bedrooms and the value of the proposed units.
Estimates for real estate tax revenues generated by the proposed project are based
on the market value of the finished building including all land development,
infrastructure, and tenant improvements (market value). This full value basis is
used for the assessed value in calculating the real estate tax revenue that would be
generated from the new land use.
The fiscal impact analysis of proposed projects assumes 100 percent occupancy of
residences. This provides the worst-case fiscal impact result; that is, the fiscal
impact results are based on the greatest potential demand for publicly funded
services.