Fiscal Impact Assessment Westside Development Plan Overview October 17, 2003 Economics Research Asso

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Fiscal Impact Assessment Westside Development
Plan OverviewOctober 17, 2003Economics
Research Associates
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Introduction

• ERA Experience
• In business since 1958 - 16,000 projects
  completed
• Established track record in fiscal and economic
  impact
• Offices in Chicago, Washington DC, Los Angeles,
  London, San Francisco, San Diego
• Assignment
• ERA was engaged to study the fiscal implications
  of the proposed Westside development plan

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Caveats

• ERA evaluated the fiscal impact implications for
  the 1,500 acre Westside study area. Retail is
  only one element of a much larger potential
  program.
• The Westside plan has not been finalized by Sun
  Prairie officials. A number of issues relating
  to planning and infrastructure are still being
  evaluated.

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ERA Approach

• Operating budgets capital expenses for Sun
  Prairie, the Sun Prairie Area School District,
  Sun Prairie Water and Light Utility
• Market area residential and commercial real
  estate development potentials
• State law regarding use of impact fees and TIF
• State funding for local jurisdictions and school
  districts
• Costs for road maintenance, public safety, parks,
  and new schools
• Infrastructure investment, trip generation,
  population, and student enrollment
• Dynamic financial model to estimate fiscal
  implications over a 20year period

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Market Phasing Absorption

• Model includes development implications for
• Residential - Single-Family, Multi-Family,
  Townhouse, and Condo
• Commercial - Office, Retail, Hotel Mixed-Use
• Institutional - Medical, Educational, Civic
• Project Timing
• Near-Term (5 years)
• Mid-Term (10 to 15 years)
• Build-Out (20 years)
• Absorption rates are used to derive Westside
  capture estimates for
• New Residents
• New Students
• Employees
• Trip Generation

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Key Fiscal Components

• Fiscal components directly impacted by Westside
• Real estate tax revenues
• Schools
• Public safety costs
• Infrastructure / maintenance
• Parks and recreation
• Utilities
• Other key program elements
• State shared revenue and ERP funding
• Intergovernmental grants

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Infrastructure Implications

• Westside will require public investment for new
  or expanded
• Roads
• Parks, open space, and storm water management
• Police, Fire, EMS
• Schools
• Utilities
• Public Administration
• Funding sources could include
• Developer participation
• Impact Permitting fees
• Stormwater wastewater fees
• Growth in property tax base

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Preliminary Implications

• Development of the Westside area should
• Expand and diversify the property tax base
• Shift the tax burden from residential toward
  commercial
• The State of WI gains considerable sales tax
  benefits
• Regardless of how the Westside emerges
• City officials will face decisions regarding
  provision of fire / police / EMS
• School officials will face choices regarding
  expansion of school capacity
• New sanitary system treatment facilities may be
  needed

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Big Box Discussion

• Considerations
• Big Box covers a wide variety of retailers
• Town Centers, Lifestyle Centers, Hybrids
• Bigger boxes / Smaller formats
• Shop for value concept
• Destination retail, incentives Bass Pro Shops
• Retail square feet per person
• All retailers are facing increased costs - health
  care

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Westside Retail Implications

• No local option sales tax
• Big box retail vehicle trip generation is
  significant
• Stormwater management issues created by large
  paved areas are significant
• Use of impact fees to fully offset these costs
  can be appropriate
• Policy Implications
• Treatment on a case by case basis