HomeMy WebLinkAboutFiscal and Economic Impact Power Point 061510
presented to Town of Vail presented by Andrew Knudtsen, Principal Economic & Planning Systems, Inc. Brian Duffany, Senior Associate Economic & Planning Systems, Inc. EverVail Fiscal
Impact Analysis JJune 15,, 2010
EverVail Fiscal Impacts 2 Presentation Overview • Fiscal Impact Analysis – How will the project impact the Town’s fiscal position? Cost vs. Revenues General Fund Capital Fund
RETT Fund Marketing Fund URA Fund • Economic Impacts – How the project will impact other sectors of the community? Document the degree of change anticipated --positive and
negative Identify tools that can be used to mitigate the impacts or leverage the benefits
EverVail Fiscal Impacts 3 EPS Role and Scope of Work • Goals of Town – Ensure the new base area has vitality, contributes to the fabric of the community, achieves similar levels of success
of other Vail areas – Identify key elements that make EverVail work – Develop a set of terms that can be used in the approval process • Goals of Vail Resorts – Establish a clear and
predictable process for reviewing the project – Understand the relative priorities of the Town – Develop a successful project at world class resort standards • EPS is working with directly
with Town staff and VRDC staff to address project-related economic and fiscal issues and concerns
EverVail Fiscal Impacts 4 Overview of Issues • Broaden the dialogue and open up the discussion between the TOV and VRDC • Fiscal Issues – Town Expenditures and Revenues – Net positive
balance – Metro District Terms • Economic Issues – Cannibalization – Hot Beds – Dollar flow and ways to optimize the impact of net new visitors • Prioritize issues of Town concern
EverVail Fiscal Impacts 5 Overview of Findings • Fiscal Impact Results – Initial findings show annual revenues of $1.4 million (general fund) – One-time revenues estimated at $2.1 million
per year during a 10-year build out (all funds) – Net fiscal impact (revenues – costs) of +$840,000 to +$960,000 – Final results pending transit impacts • Economic Impact Areas of Focus
– Retail – Hotel – Condominiums – Office – Deed Restricted Housing – Parking • Next Steps – Fiscal impact analysis is complete – Economic analysis to be completed after opportunity for
VRDC to consider options, modify program, and conduct further discussions between EPS, TOV staff, and VRDC
EverVail Fiscal Impacts 6 Development Program • Total of 525 units – 120 room hotel – 40 branded residences – 317 condominiums – 14 deed restricted rental units – 34 deed restricted
for-sale units • 79,000 SF of retail • 79,000 SF of other commercial space Description Sq. Ft. Retail and F&B Restaurant 30,000 Retail 36,000 Grocer 13,000 Subtotal 79,000 Other Commercial
Space Hotel Conference 5,156 Meeting Room 3,840 VRD/Ski School 15,690 Spa 20,710 Office 33,600 Subtotal 78,996 Totals 157,996 Source: Vail Resorts & BBC Research, Economic & Planning
Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model-06-09-2010.xls]3-Commercial Dev Prog
EverVail Fiscal Impacts 7 Fiscal Impact Methodology --Revenues • Reviewed annual budgets and audited financial reports for past five years • Met with a wide range of staff members •
Revenues – Market research for real estate values – Sales tax is generated by visitor expenditures – Sales tax is largely independent of amount of retail in project • Major revenues
analyzed – 4.0% retail sales and lodging sales tax – 1.4% lodging tax (marketing district) – Property tax (to URA) – Ski lift tax – RETT – Construction fees and permits
EverVail Fiscal Impacts 8 Fiscal Impact Methodology -Costs • EPS and Staff case studies for major cost items – Public works – Fire – Police • Average cost method for Town administrative
functions – Covers Administration, Community Development, and Transportation (until study on additional costs is complete) – Small marginal cost impact (10%, 25%, to 50% of average cost,
depending on department and assumptions) • Transit system impacts are preliminary – Will be updated pending results from Town’s transit consultant
EverVail Fiscal Impacts 9 General Fund Revenues Revenue 2006 2007 2008 2009 2006-2008 Avg. Estimating Method One Time or Ongoing Revenue CAFR CAFR CAFR Amended Budget Local Taxes: Sales
Tax Split b/t Gen'l Fund & Capital Fund 56/44 59/41 59/41 Sales Tax (Incl. Lodging Sales Tax) $9,345,660 $10,741,500 $11,640,000 $9,760,000 $10,575,720 Case Study Ongoing Property and
Ownership 2,931,347 3,012,030 4,309,622 4,293,500 3,417,666 Case Study Ongoing Ski Lift Tax 2,975,097 3,039,619 3,277,703 3,115,000 3,097,473 Case Study Ongoing Franchise Fees, Penalties,
and Other Taxes 884,328 877,634 1,075,209 1,049,935 945,724 Contractual Revenue -Not Analyzed ---Total -Local Taxes 16,136,432 17,670,783 20,302,534 18,218,435 18,036,583 Licenses &
Permits Construction Fees 3,481,989 4,992,752 3,799,444 ---4,091,395 Case Study One-Time Contractors' Licenses 30,993 34,398 42,061 ---35,817 Not Analyzed ---Other Permits and Licenses
48,774 55,867 61,521 ---55,387 Not Analyzed ---Total -Licenses and Permits 3,561,756 5,083,017 3,903,026 1,335,200 1,335,200 Intergovernmental Revenue County Sales Tax 570,445 603,364
625,674 ---599,828 Case Study Ongoing County Road and Bridge 488,095 497,974 733,673 ---573,247 Case Study Ongoing Motor Vehicle Registration Fees 25,673 25,578 25,109 ---25,453 Not
Analyzed ---Cigarette Tax 80,738 81,781 80,913 ---81,144 Per Peak Person Served Ongoing Highway Users Tax 202,188 191,042 179,605 ---190,945 Not Analyzed ---State Health Inspection 11,748
18,822 11,768 ---14,113 Not Analyzed ---Other County Revenues 0 0 0 ---0 Not Analyzed ---Other State Sources 400 30,936 49,455 ---26,930 Not Analyzed ---Federal Sources 97,983 59,542
0 ---52,508 Not Analyzed ---Total -Intergovernmental 1,477,270 1,509,039 1,706,197 1,581,680 1,581,680 Charges for Services Management Fees (Local Marketing District) 22,172 66,750 93,000
---60,641 Not Analyzed ---Internal Service Charge 356,841 318,297 550,409 ---408,516 Not Analyzed ---Out of District Fire Response 40,535 57,393 97,526 ---65,151 Not Analyzed ---Alarm
Monitoring Fees 49,188 36,953 37,853 ---41,331 Not Analyzed ---Parking Structures 3,451,912 3,592,596 3,905,299 5,459,744 3,649,936 Not Analyzed -Developer Revenue ---Parking Passes,
Misc. Parking Revenue 555,422 921,796 800,686 ---759,301 Not Analzed ---Fines and Forfeitures 286,197 347,090 396,707 260,000 343,331 Per Peak Person Served Ongoing Rents 827,280 897,958
949,961 906,382 891,733 Not Analyzed ---Other Charges, Services, and Sales 291,027 357,755 332,467 686,788 327,083 Per Peak Person Served Ongoing Total -Charges for Services 5,880,574
6,596,588 7,163,908 7,312,914 6,547,023 Other Revenues Interest on Investments 820,136 984,040 571,072 115,000 791,749 Not Analyzed ---Other 501,699 195,016 163,025 180,500 286,580 Not
Analyzed ---Total, Other Revenues 1,321,835 1,179,056 734,097 295,500 1,078,329 Total Revenue $28,377,867 $32,038,483 $33,809,762 $28,743,729 $28,578,816 Source: Town of Vail; Economic
& Planning Systems Note: Some revenues are not analyzed because they are either a) do not have a nexus with new development or b) are minor revenue sources that will not significantly
affect the fiscal impact of the project. H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model-06-09-2010_100pctVar.xls]10-General_Fund_Rev
EverVail Fiscal Impacts 10 General Fund Costs Expenditures by Type 2006 2007 2008 2009 2006-2008 Avg. Avg. Cost Method Cost Numerator Estimating Method CAFR CAFR CAFR Amended Budget
(2006-2008 Avg.) Municipal Services: Town Officials $1,171,124 $1,245,517 $1,224,007 $1,261,297 $1,213,549 ---Not Analyzed -Fixed Cost Administrative 2,944,160 3,155,193 3,164,384 3,234,825
3,087,912 $3,087,900 Per Peak Person Served Community Development 2,481,703 3,329,590 3,327,400 2,405,353 3,046,231 $3,046,200 Per Peak Person Served Total -General Government 6,596,987
7,730,300 7,715,791 6,901,475 7,347,693 Public Safety Police 4,451,637 4,799,831 5,047,503 5,315,289 4,766,324 ---Case Study -# of Calls Fire 2,083,075 2,305,073 2,577,087 2,735,009
2,321,745 ---Case Study -# of Calls Total -Public Safety 6,534,712 7,104,904 7,624,590 8,050,298 7,088,069 Public Works and Transportation Highways and Streets 3,020,483 3,134,300 3,717,159
3,552,133 3,290,647 ---Case Study Transportation 3,176,855 3,390,419 3,853,826 4,629,449 3,473,700 $3,473,700 Case Study Parking Operations 705,679 795,353 926,689 ---809,240 ---Not
Analyzed Facility Maintenance 2,722,637 3,045,019 3,281,389 3,723,070 3,016,348 $3,016,300 Per Peak Person Served Total -Public Works 9,625,654 10,365,091 11,779,063 11,904,652 10,589,936
Culture and Recreation Contributions and Special Events 986,792 1,293,767 1,541,498 1,524,634 1,274,019 ---Discretionary Expense -Not Analyzed Special Recreation Facilities 196,854 168,224
161,594 ---175,557 ---Fixed Cost -Not Analyzed Library 664,856 752,031 828,056 825,745 748,314 ---Fixed Cost -Not Analyzed Total -Culture and Recreation $1,848,502 $2,214,022 $2,531,148
$2,350,379 $2,197,891 Total Expenditures $24,605,855 $27,414,317 $29,650,592 $29,206,804 $27,223,588 Revenue Over or Under Expenditures $3,772,012 $4,624,166 $4,159,170 -$463,075 $1,355,228
Source: Town of Vail; Economic & Planning Systems Note: Some revenues are not analyzed because they are either a) do not have a nexus with new development or b) are minor revenue sources
that will not significantly affect the fiscal impact of the project. H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model-06-09-2010.xls]12-General_Fund_Expenses
EverVail Fiscal Impacts 11 Fiscal Impact Methodology -Revenues • Occupancy is a key fiscal and economic driver • Units in rental pool assumptions – Hotel 100% – Branded Residences 85%
– Condominiums 50% • Annual occupancy assumptions – Hotel 60% – Branded Residences 45% – Condominiums 30% • High hotel occupancy driven by: – 15,000 sq. ft. of meeting space, targeting
group and offseason business – Vail Resorts brand and marketing reach – 4 star property: broader market than 5 star
EverVail Fiscal Impacts 12 Spending Assumptions • Per person per day, annual average • Hotel -$170 • Branded residences -$165 • Condos -$130 • Capture and leakage – Conservative assumptions
– 75-80% of visitor $ captured in Vail
EverVail Fiscal Impacts 13 Summary of Fiscal Impacts – General Fund • Annual fiscal impact at buildout and stabilized occupancy • Annual revenue of $1.4 million • Annual costs of $426,000
to $545,000 • Net fiscal impact of +$840,000 to +$960,000 • Major costs: – Public works +/-$150,000/year – Transportation preliminarily estimated at $150,000/yr
EverVail Fiscal Impacts 14 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 Revenues Other Fines and Forfeitures Cigarette Tax County Road and Bridge
County Sales Tax Ski Lift Tax 4.0% Lodging Sales Tax Retail Sales Tax $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 Costs Facility Maintenance Transportation
Right-of-Way and Landscaping Fire Police Community Development Administrative Summary of Fiscal Impacts – General Fund
EverVail Fiscal Impacts 15 Summary by Fund • General Fund One Time Revenues – One-time revenues (impact fees, construction fees) of $5.3 million • Capital Fund – $9.1 million in use
tax (one time) – $700,00/year in sales tax • RETT Fund – $6.5 million in RETT from developer sales – $300,000/year on resales – Recreation impact fee $595,000 (revised)
EverVail Fiscal Impacts 16 • Vail Marketing District -$300,000/year • Vail Reinvestment Authority – Property tax only – $385,000/year from Town mill levy (4.69 mills) – $3.4/year million
from other taxing entities increment – $3.8 million/year total – Subject to the requirements of the Colorado Urban Renewal Law – Identify projects and incur indebtedness under the statute
Summary by Fund
EverVail Fiscal Impacts 17 Fiscal Impact Conclusions • Positive fiscal impact with preliminary transit costs • Fiscal impact not judged to be a major issue • Phasing – EPS will revise
analysis when a phasing plan is available – Maintain net positive fiscal balance if partially built – Hotel is major revenue generator, likely to be built first • Transit system impacts
are not complete – Not likely to offset positive fiscal balance
EverVail Fiscal Impacts 18 Economic Issues • Retail – Maximizing new visitor dollars – Evaluate potential sales erosion from existing retail – Optimizing retail mix and total size •
Hotel – Maximizing occupancy (year round) – Appeal to a broader market segment • Condominiums – Programs/incentives to maximize warm beds
EverVail Fiscal Impacts 19 Economic Issues (cont’d.) • Office – Preserve existing employment • Deed restricted housing – Confirm project fulfills Town affordable housing requirements
• Parking – Determine how proposed parking program aligns with Town’s parking policies and needs
EverVail Fiscal Impacts 20 Maintaining Public Spaces • EverVail proposes a Title 32 Metropolitan District to maintain public spaces • Ensure that adequate revenues are dedicated to O&M
• Maintain public spaces to Town standards • Visitor should see no difference between the Resort and the Town
EverVail Fiscal Impacts 21 Conclusion • Fiscal projections show a net-positive impact from the proposed project • Clarification of issues on which to focus