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MEASUREMENT OF ECONOMIC IMPACTS PROPOSALS FOR DEVELOPMENT WEST ATLANTIC PROPERTIES DELRAY BEACH CRA

Revised October 4, 2013

PMG Associates, Inc. 3880 NW 2 Court Deerfield Beach, Florida 33442 (954) 427-5010


MEASUREMENT OF ECONOMIC IMPACTS PROPOSALS FOR DEVELOPMENT WEST ATLANTIC PROPERTIES DELRAY BEACH CRA

INTRODUCTION The firm of PMG Associates, Inc. (PMGA) has been engaged by the Delray Beach CRA to determine the economic impact of three proposals submitted to the CRA to develop the property known as the West Atlantic Properties. The properties consist of 41 parcels on approximately 6.23 acres bordered on the North by Atlantic Avenue, the East by Southwest 6 Avenue and the West by SW 9 Avenue. The southern border is irregular and cannot be described here. The proposals were received by the CRA from the following organizations: • • •

Equity Enterprises USA, Inc. Jones/New Urban Delray Prime Investors and Developers

This analysis will measure the financial stability of the firms as well as the economic impact of the proposals including funds accruing to the CRA, the General Fund of the City of Delray Beach and the local economy. This review does not address planning issues that may occur.

1.

FINANCIAL CAPABILITY OF THE FIRMS

PMGA has completed a review of the Financial Statements provided by the three proposers. Financial Statements were requested for the past three years. However, a full three years’ of data was not available in all cases. In addition to regular Financial Statements, examination of cash accounts was also conducted. Four Accounting measures were chosen to review the Financial Statements. These measures are basic analyses of Financial Statements and also reflect the ability of the company to operate in the specific industry of development, construction and operation of Real Estate. The measures and their descriptions are as follows:

Current Ratio The ratio, which is a measure of Liquidity, is defined as Current Assets divided by Current Liabilities and identifies the coverage of debt that is due in the short term by assets that are on-hand. The firm should at least have a ratio of 1, which signifies that the Current Liabilities can easily be paid. For the Real Estate industry, a ratio much higher than 1 is not necessary. Page | 1


Rate of Return on Assets This factor, measuring Profitability, is defined as Net Income divided by Total Assets. This measure looks to determine if the firm is making a reasonable return on their investment. The measure is expressed as a percentage and the typical return for the industry and the region must be considered.

Debt to Total Assets This ratio is a coverage ratio and is the amount owed (Debt) divided by Total Assets. This measure determines if the company can pay off all of its debts if the firm is liquidated. A rate over 100% indicated that the company has more Debt than Assets and cannot meet its obligations without an infusion of funds.

Debt to Equity Ratio A measure of leverage, this ratio is defined as debt divided by equity.

1.1

Results of the examination – Equity Enterprises

The financial records are retained in Ireland and produced in a format that is different than those that meet GAAP standards in the United States. However, it was possible to conduct the accounting tests in sufficient detail to render an opinion for this report. Financial records were available for the current time frame only. • • • • •

The Current Ratio is approximately 1, which indicates that the firm can meet current obligations. The Rate of Return on Assets is less than optimal for the Real Estate industry. However Net Income is positive and steady. Debt to Total Assets is appropriate with Assets approximately 1.1 times the amount of Debt outstanding. With a ratio in this magnitude, there is no significant concern over meeting debt payments. Debt to Equity uses only Stockholders Equity to cover outstanding Debt. For Equity Enterprises the Equity amount is nearly 11% of Debt indicating that outstanding loans cannot be covered by Stockholders Equity alone. Cash on Hand is more than sufficient to meet the equity required for this project.

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1.2

Results of the examination – Jones/New Urban

This proposal is provided by a combination of two entities that are operating as a Joint Venture. The complete project will include both firms at a 50% stakeholder in the development and operation of the facility. The ratios listed in the following discussion and table are a combined figure for the two firms. A separate discussion of each is provided, as necessary. • •

• •

1.3

The Current Ratio is approximately 3.6, which indicates that the combined firms can easily meet current obligations. The Rate of Return on Assets is provide for Milton Jones Development Corporation appropriate for a firm in the Real Estate industry and has evidenced a sharp increase in 2012 followed by a more significant increase in 2013. The Net Income for 2012 for New Urban shows a negative figure due to the write off of several projects during that year. Debt to Total Assets is appropriate with Assets approximately 2.03 times the amount of Debt outstanding. With a ratio in this magnitude, there is no significant concern over meeting debt payments. The Milton Jones Development Corporation has no outstanding Debt, at this time. Debt to Equity uses only Stockholders Equity to cover outstanding Debt. For Jones/New Urban the Equity amount is 98% of Debt indicating that outstanding loans are nearly matched by Stockholders Equity alone. Cash on Hand is more than sufficient to meet the equity required for this project.

Results of the examination – Prime Investors and Developers

Prime Investors and Developers have a series of companies that develop and construct different types of projects. This review is for the entity that will develop this site. • • • • •

The Current Ratio is over 4.6, which indicates that the firm can readily meet all current obligations. The Rate of Return on Assets is low for a firm in the Real Estate industry and is due to late returns on some assets. Debt to Total Assets is a very small percentage with Assets approximately 1.76 times the amount of Debt outstanding. With a ratio in this magnitude, there is no concern over meeting debt payments. Debt to Equity uses only Stockholders Equity to cover outstanding Debt. For Prime, the Equity amount alone does not cover Debt. Cash on Hand is more than sufficient to meet the equity required for this project.

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1.4

Summary

All of the proposers have the financial capacity to fund, construct and operate this project based on the review of the financial records. The following table summarizes the Accounting Ratios analyzed for this report.

TABLE 1 SUMMARY OF FINANCIAL RATIOS Ratio Current Ratio Rate of Return on Assets Total Assets to Debt Equity as a percentage of Debt

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Equity Enterprises 0.93 1.0% 1.10 10.7%

Jones/ New Urban 3.60 8.5% 2.03 98.3%

Prime 4.64 0.6% 1.76 68.6%


2.

DEVELOPMENT PROGRAM

The three proposals vary in scope and operation, with individual approaches to utilizing the space and meeting the needs of the CRA. A summary of the scenarios follows.

2.1

Equity Enterprises Total of all Uses Proposed: Retail: 43,638 Square Feet Office: 34,000 Square Feet (Class A) Residential: 129 Total Rental Units Parking Garage: 457 spaces Proposed Terms: Cash purchase of $1 million, delivered in 6 increments. First increment to start upon completion of the construction-estimated to be October 2016. The next 5 increments would be delivered annually up to the fifth year to total $ 1 million dollars. Compensation from the City: No CRA Incentive requested.

2.2

Jones/New Urban Development Scenario: Retail: 21,200 Square Feet Office: 17,300 Square Feet (Class A) Restaurant: 1,500 Square Feet Residential: 184 Units Parking Garage: 438 spaces

Proposed Terms: • • • • • •

Lease with eventually acquiring the properties. First five years $1 Second 5 years, up to 4% of appraised property value Third 5 years, up to 6% of appraised property value Year 16 and so on – not to exceed 8% of the appraised property value The proposer can buy at any time.

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Compensation from the City: Requests LVI and DIA and “public private partnership: regarding the commercial space in the mixed use buildings. Also “lease to CRA for $15 square foot NNN the 22,300 Commercial Space”.

2.3

Prime Developers Development Scenario: Office: Retail: Parking Garage:

53,403 Square Feet (Class A) 15,712 Square Feet 280 spaces

Proposed Terms: Long term lease – of 40 years that could extend another 20 years. Land lease: o First 5 years - $1 per year o Second five years - 2% of current appraised value ($ 713,277) o Year 11 - 3% of current appraised value ($ 713,277) o Each year (up to year 15) after increase of 2% of previous year amount o Year 16 - 4% of current appraised value ($ 713,277) o Years 17-20 - increase of 2% of previous year amount o Year 21 year– 5% of current appraised value ($ 713,277) o Years 22-40- increase of 2% of previous year amount • • •

Can purchase the project at any time. Wants the “property filled to grade and all utilities stubbed to property” Only Prime can request a new Appraisal. Parking Garage: City will build or pay developer to build. CRA will own the parking garage and land. All spaces made available to the developer. The developer will pay the CRA $120 for exclusive use of 100 of the parking spaces. Prime has the option to purchase the garage at Appraised Value. Compensation from the City: o Modified LVI o Site Development Assistance Program (reimbursement basis) o REDP – Real Estate Partnership Program Loan o CRA Makes equity contribution of 10% ($1,334,475) of project costs o ROI – Return on Investment – Determined by estimated programs guidelines

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o CRA to build the Parking Garage, but rent exclusive spaces (100 spaces @ $120 per space per year) to developer o Incentives Tenants - Job creation Bonus Program (JCB And Relocation and Development Incentives/RDI) o Wants the “property filled to grade and all utilities stubbed to property”

3.

REVENUE IMPACT TO THE CRA

Two revenue sources exist for the CRA from this project. The first is the reimbursement for the property collected through either a sale or through lease payments. The second amount is the annual TIF generated by the increased Taxable Value of the completed development which is received each year of the life of the CRA. One proposer (Equity) has offered a purchase price of $1 million. However, this amount is to be paid over a period of six years starting with the completion of the construction. When considering the Present Value of the purchase price the payments are reduced by a Discount Rate of 3.5% per year. The total amount of the Present Value of the purchase price is calculated based on a contract date of 2014 and results in a current value of $833,471. (See calculations in the table below). TABLE 2 PRESENT VALUE OF PURCHASE PRICE – EQUITY ENTERPRISES Time Frame Contract Date Construction Completion of Construction 1st Year of Operations 2nd Year of Operations 3rd Year of Operations 4th Year of Operations 5th Year of Operations Total

Year 2014 2015 2016 2017 2018 2019 2020 2021

Payment $ 0 $ 0 $ 47,600 $ 95,200 $ 142,800 $ 190,500 $ 238,200 $ 285,700 $1,000,000

Present Value $ 0 $ 0 $ 44,435 $ 85,865 $124,442 $160,396 $193,776 $224,558 $833,471

For the proposals by Jones/New Urban and Prime, the method offered is a lease using the Land Value Investment (LVI) program by the CRA. Both proposals indicate a willingness to purchase the land at a future date, which is not specified, at this time. In the case of both proposals, our review does not agree with the lease amounts identified in the proposals.

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The Jones/New Urban proposal follows the LVI program in defining the lease rate as a percentage of the appraised value. However, the lease payments listed in the Pro Forma does not match with the value of the property as defined in the latest appraisal. The appraisal of the property cites a value of $959,738 per acre. Based on 6.23 acres, the current value is $5,983,779. For evaluation purposes, we inflated the value at a rate of 4% per year generating a lease rate in year 6 of $265,462, which is significantly higher than the amount in the Jones/New Urban proposal. The proposal from Jones/New Urban is evaluated on both the rates as they have suggested, and the LVI as identified by the CRA and reviewed by PMGA. For the Prime Proposal regarding the lease rate, the percentage of the appraised value is reduced in their proposal and the rate of acceleration is also lower than the rates identified in the LVI. For this analysis, the proposal from Prime is evaluated on both the rates as they have suggested, and the LVI as identified by the CRA and reviewed by PMGA. The calculation of the revenue to the CRA is found in the tables A-1 through A-5 The largest revenue source for the CRA will be the Present Value of TIF amount generated by the project as well as the amount paid by the developer for the land. The calculation of TIF requires the estimation of the value of the property after completion of the project. The amount subject to TIF is the incremental increase in value over the Taxable Value from the Base Year of the establishment of the CRA. The Base Year amount of the Taxable Value of the property differs based on the proposal since each of the proposers includes a variation of the use of the property. (Equity proposes to use the two residential buildings that are intermingled with the CRA property). Records from the Palm Beach County Property Appraiser’s Office were examined to arrive at a Base Year Taxable Value of the property which is found in the table below.

TABLE 3 BASE YEAR TAXABLE VALUES Proposer Equity Enterprises Jones/New Urban Prime

Base Year Taxable Value $1,307,537 $1,203,052 $ 0

To arrive at the Taxable Value, methods used by the Palm Beach County Property Appraiser’s Office were evaluated. Typically, the initial valuation of an income producing asset will be at 85% of Project Cost (less Financing Costs). Later, this method will be altered to account for lease rates, vacancies and other use factors. For this valuation, the 85% of the construction portion of the Project Cost factor was used. The Project Cost Values used in this analysis are as follows:

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TABLE 4 PROJECT COSTS AND TAXABLE VALUE Proposer Equity Enterprises Jones/New Urban Prime

Project Cost (less Financing) $35,003,000 $31,304,000 $12,260,000

Estimated Taxable Value $29,752,550 $26,608,400 $10,421,000

TABLE 5 INCREMENTAL TAXABLE VALUES

Proposer Equity Enterprises Jones/New Urban Prime

Base Taxable Value $1,307,537 $1,203,052 $ 0

Completed Taxable Value $29,752,550 $26,608,400 $10,421,000

Increment $28,445,013 $25,405,348 $10,421,000

The next factor is the rate applied for TIF purposes. Under State law, TIF is applied to operating millage rates only. Those rates that apply for Debt Service are excluded. Additionally, millage rates for School Districts and those taxing authorities that cross county boundaries are also exempt. Under the agreement in Palm Beach County, the Children’s Services millage rate is also exempt. The millage rates that apply for TIF purposes are the current City and County Operation Millage, which totals 11.9807 mills (City @ 7.1992 and County @ 4.7815). The TIF amount is further reduced by the 5% Administrative Charge that is retained by the City and County. The calculation of the revenue generated by each of the proposals for the first 20 years, is found in Tables A-1 through A-5 in the Appendix. This calculation assumes that new Taxable Values will be added to the Tax Rolls in the year following completion of construction and occupancy of the property. For this analysis, the first year that Taxable Values will be recorded varies based on the constructions periods. The first year that TIF is generated for each proposal is as follows. • • •

Equity – 2017 Jones/New Urban – 2018 Prime - 2016

The values are projected to grow at a rate of 4%. Additional figures are presented for the Present Value of the revenue using a Discount Rate of 3.5%.

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4. REVENUE IMPACT TO THE CITY Revenues accruing to the City include both General Fund and Enterprise Fund amounts. For ease of comparison, both General Fund and Enterprise Fund amounts will be combined in this section. The revenue sources for the City of Delray Beach are: • Incremental Ad Valorem Taxes (5% of increase retained by the City) • Franchise Fees • Utility Taxes • Communications Service Tax • Stormwater Fees

TABLE 6 CITY OF DELRAY BEACH REVENUE PROJECTIONS Proposer Equity Enterprises Jones/New Urban Prime

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Additional Revenue to Delray Beach (first year of operation) $ 96,519 $119,502 $ 16,156


5. IMPACT ON THE LOCAL ECONOMY The impact on the general economy is generated through several items that accrue differently for each proposal. The items considered for this analysis include: • • •

Employment Employee Spending Sales Tax

Employment: The projection of employment was performed using standard rates of number of employees per square foot or seating. These rates are for estimation purposes and reflect the typical conditions in the area. In addition, the employment measures Full Time Equivalent (FTE) persons. In the service industries, many employees are not full time and each person that is employed at the location may not be a FTE. This analysis makes this measurement for consistency and applicability. The rates used for the calculation are as follows: Office – 1 employee per each 250 square feet Retail - 1 employee per each 350 square feet Food Service – 1 employee per each 350 square feet These rates are based on approved projects throughout the State of Florida and use general design criteria as a basis. TABLE 7 ESTIMATES OF EMPLOYMENT Category Office Retail Residential TOTAL

Equity 136 125 6 267

Jones/New Urban 69 65 9 143

Prime 214 45 0 259

Employee Spending: Additional economic impact is derived from the retail spending by employees of the elements of the overall development. Chief among this category is spending by office workers since they generally are higher paid and must normally go outside of the office for items such as lunch. The best source of data for this activity is a study conducted by the International Council of Shopping Centers. A report dated 2012 titled “Office-Worker Retail Spending in a Digital Age” measured the spending by office workers by location, employment category and type of spending. Page | 11


The study concluded that office workers spend approximately $195 per week on all expenses, with $102 per week in close vicinity to their office building. There is no separate study for spending by Retail workers available. However, the spending by Clerical and Administrative workers can be adapted to equate to this spending. For this study, the spending amount to be considered is a total of $84 per week with $57 per week spent in the vicinity of the workplace. Based on these rates, the outside activity generated by the employees included in the proposals is found in the Table below.

TABLE 8 ESTIMATES OF EMPLOYEE SPENDING – IMMEDIATE AREA OF THE PROJECT Proposer Equity Jones/New Urban Prime

Office Generation $ 721,344 $ 365,976 $1,135,051

Retail /Residential Generation $388,284 $219,336 $133,380

Total Generation $1,109,628 $ 585,312 $1,268,436

Retail Sales by Residents: The residents of the projects will also participate in the economy of the community based on the Retail Sales by this group. Retail Sales spending per household was obtained from Claritas (a nationally recognized supplier of marketing data) for the general area of the project. This figure is listed at $13,422 per household annually. For the projects the summary of the results follow.

TABLE 9 RETAIL SALES BY RESIDENTS Proposer Equity Jones/New Urban Prime

Annual Retail Sales by Residents $1,731,438 $2,469,648 $ 0

Sales Taxes: Sales Taxes are collected on the retail and leisure activities of the population and visitors. The Tax is applied to all sales and leases at a rate of 6%, which is collected by the State of Florida. Sales Taxes are estimates based on the following factors.

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• •

Estimated sales in the Retail and Restaurant component Rental rates for the Office/Retail/Residential components

TABLE 10 ESTIMATED SALES TAX GENERATION BY THE PROJECT Proposer Equity Jones/New Urban Prime

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Annual Sales Tax $1,019,257 $ 569,865 $ 367,878


Summary of Revenue Generation Revenue Generation includes the amount from TIF and the purchase/lease payments. This amount must be reduced by the incentives paid to the developers under the DIA and other programs. Two of the proposers (Jones/New Urban and Prime) have requested incentives from the DIA program. Equity Enterprises is not requesting any incentives. The amount of the DIA incentive to the developer will be dependent on the approval of the CRA Board based on the eligible costs and the overall proposal. The amounts requested by the Developers have not been approved, at this time, and are only speculative. The infrastructure costs identified in the proposals are: Jones/New Urban Prime:

$1,378,842 $ 600,000

If the CRA Board does approve 50% of these costs the amounts would be: Jones/New Urban Prime:

$ 689,421 $ 300,000

In addition, the proposal from Prime indicated that the CRA must construct the parking garage, which has an estimated cost of $3,978,720. During our review, we concluded that the estimates of future lease payments from Jones/New Urban and Prime did not meet the intent of the LVI. The major concern was no reappraisal of the land value in future years. Table 10 lists the payments and return to the CRA based on the proposals submitted. Table 11 lists the revenue to the CRA based on our review of the LVI. The total amount accruing to the CRA, the City and the General Economy is found in the following tables.

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TABLE 11 SUMMARY OF IMPACTS AS PROPOSED Equity Development Program Office Square Feet Retail Square Feet Residential Units Parking

Jones/New Urban

Prime

34,000 43,638 129 457

17,300 22,700 184 438

53,403 15,712 0 280

Revenue/Return to CRA Lease/Purchase NPV 20 Years TIF NPV 20 Years Less DIA TOTAL without Garage Costs Less Garage Cost TOTAL with Garage Costs

$833,471 $5,222,117 $0 $6,055,588 $0 $6,055,588

$1,365,035 $4,229,766 $689,421 $4,905,380 $0 $4,905,380

$365,457 $2,076,984 $300,000 $2,142,441 $3,978,720 -$1,836,279

Employment Impacts Employment Employee Spending

267 $1,109,628

143 $585,312

259 $1,268,436

Impact from Residents Annual Retail Sales by Residents

$1,731,438

$2,469,648

$0

City Revenues Annual NPV 20 Years

$96,519 $1,419,779

$119,502 $1,757,855

$16,156 $237,652

Sales Taxes Annual NPV 20 Years

$1,019,257 $14,350,935

$569,865 $8,023,585

$367,878 $5,179,649

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TABLE 12 SUMMARY OF IMPACTS AS PER PMGA CALCULATIONS Equity Development Program Office Square Feet Retail Square Feet Residential Units Parking

Jones/New Urban

Prime

34,000 43,638 129 457

17,300 22,700 184 438

53,403 15,712 0 280

Revenue/Return to CRA Lease/Purchase NPV 20 Years TIF NPV 20 Years Less DIA TOTAL without Garage Costs Less Garage Cost TOTAL with Garage Costs

$833,471 $5,222,117 $0 $6,055,588 $0 $6,055,588

$5,029,445 $4,229,766 $689,421 $8,569,790 $0 $8,569,790

$810,589 $2,076,984 $300,000 $2,587,573 $3,978,720 -$1,391,147

Employment Impacts Employment Employee Spending

267 $1,109,628

143 $585,312

259 $1,268,436

Impact from Residents Annual Retail Sales by Residents

$1,731,438

$2,469,648

$0

City Revenues Annual NPV 20 Years

$96,519 $1,419,779

$119,502 $1,757,855

$16,156 $237,652

Sales Taxes Annual NPV 20 Years

$1,019,257 $14,350,935

$569,865 $8,023,585

$367,878 $5,179,649

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6.

RATE OF RETURN DEVELOPER

The Pro Formas for the proposers were reviewed to determine if the amounts considered were appropriate. Based on the review, expenses and revenues appear reasonable and generate a Rate of Return that is acceptable.

TABLE 13 RATE OF RETURN Proposer Equity Jones/New Urban Prime

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Return on Investment 8.4% 10.3% 8.5%


7.

ABSORPTION OF UNITS/SQUARE FOOTAGE

One of the significant questions concerning the proposals is the ability of the developer to occupy the elements of the project. Absorption of the square footage is then crucial to determining the viability of the project and impact on Delray Beach. Each of the elements will be discussed independently.

Office: Demand for office space is very geographically dependent and reporting services typically generate statistics for wider areas. Commercial Florida Realty Services, LLC has completed a report for 2011 for the Delray Beach area for Class A and B office space and places the vacancy figure at 45%. A March 2012 report from Sperry Van Ness identifies the vacancy rate at 50%. However, both studies note that demand in the downtown area is high, although no large block of space is available. The higher vacancy rates of 45% to 50% would seem to indicate that the demand for office is not significant and that the existing surplus would require 5 to 10 years to absorb. This condition is not true for the downtown area and demand remains high. Two of the proposers have indicated that they would move all or part of their operations to this location. This situation will not ease the demand for space in the downtown area, although the office space will be immediately occupied. When reviewing the proposals for the West Atlantic Properties, the proposals address the office space through the designation of the leasing possibilities for each project. Equity Enterprises has not addressed leasing arrangements for the office space in their proposal. Elements of the RFP call for the potential for the CRA to lease a portion of the office space, which would account for a significant amount of the office space. Jones/New Urban only provides a small amount of office space (17,300) which is assumed to be leased to the CRA, as per elements of the RFP. This assumption addresses most of the space. Prime has already pre-leased a significant portion of the office space (letters are found in their proposal). These lease arrangements account for most of the office space. Based on this information, we conclude that the office space will be readily absorbed by the business community.

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Retail: Vacancy rates for retail in Palm Beach County were reviewed to determine the demand. No specific analysis for the Delray Beach area is available to assess the conditions that exist in the immediate area. • •

Marcus & Millichaps in a report dated second quarter of 2013 note that vacancy rates have fallen to 8.4% in the County with a corresponding increase in lease rates. Colliers International placed a vacancy rate figure of 9% for the County for 2012. This report also notes that no real new construction of retail space has occurred.

When reviewing the proposals for the West Atlantic Properties, the proposals address the retail space through the designation of the leasing possibilities for each project. Equity Enterprises has not addressed leasing arrangements for the retail space in their proposal. This portion of the development scenario is designed to meet the needs of the residential units in the project as well as for the general community. Jones/New Urban only provides a small amount of retail space (22,700) which is designed to meet the needs of the residential units in the project as well as the general community. Prime has a small amount of retail space (15,712) that can easily be supported by the users of the office space.

Based on this information, we conclude that the retail space will be readily absorbed by the business community.

Residential: The first step in the analysis of demand for the residential segments of the projects was review of growth projections for the immediate area. Several sources were reviewed to determine the growth potential of the area. These sources did not indicate any residential growth in either a ½ mile or 1 mile radius of the project site. Since the residential units are to be directed toward workforce housing or affordable housing, the next source reviewed was the Five-Year Consolidated Plan for the City of Delray Beach. This document, prepared for HUD, provides data regarding the housing market in the City and also focuses on the Low to Moderate Income Households in the community. The data collected includes the number of households who rent and fall into the Moderate Income category (80% to 120% of Median Household Income for the area). The result was the estimate of 1,411 households.

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The other measure in the data is the evidence of Cost Burden. Cost Burden is defined as the percentage of the household income spent on housing. A rate of 30% of the Household Income is considered Cost Burdened. A rate of 50% or higher spent on housing is considered Severely Cost Burdened. The result of the data review for the total Moderate Income rental households is: TABLE 14 ESTIMATE OF DEMAND FOR WORKFORCE HOUSING Category Moderate Income Households Cost Burdened Severely Cost Burdened

Number 1,411 767 212

For the Low and Extremely Low Income Households who rent, the numbers add another 573 units. Based on this data, we conclude that there is a demand for the residential units in these projects.

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TABLE A-1 EQUITY ENTERPRISES REVENUE GENERATION

Period

Taxable Value

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

$0 $0 $0 $29,752,550 $30,942,652 $32,180,358 $33,467,572 $34,806,275 $36,198,526 $37,646,467 $39,152,326 $40,718,419 $42,347,156 $44,041,042 $45,802,684 $47,634,791 $49,540,183 $51,521,790 $53,582,662 $55,725,968

Incremental Incremental Present Purchase NPV NPV Total Value Taxes Total TIF Value Payment Purchase Revenue $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $47,600 $44,435 $44,435 $28,445,013 $340,791 $323,752 $292,005 $95,200 $85,865 $377,870 $29,635,115 $355,049 $337,297 $293,935 $142,800 $124,442 $418,377 $30,872,821 $369,878 $351,384 $295,856 $190,500 $160,396 $456,252 $32,160,035 $385,300 $366,035 $297,770 $238,200 $193,776 $491,545 $33,498,738 $401,338 $381,271 $299,676 $285,700 $224,558 $524,234 $34,890,989 $418,018 $397,118 $301,576 $0 $0 $301,576 $36,338,930 $435,366 $413,598 $303,469 $0 $0 $303,469 $37,844,789 $453,407 $430,737 $305,357 $0 $0 $305,357 $39,410,882 $472,170 $448,561 $307,240 $0 $0 $307,240 $41,039,619 $491,683 $467,099 $309,118 $0 $0 $309,118 $42,733,505 $511,977 $486,378 $310,992 $0 $0 $310,992 $44,495,147 $533,083 $506,429 $312,863 $0 $0 $312,863 $46,327,254 $555,033 $527,281 $314,729 $0 $0 $314,729 $48,232,646 $577,861 $548,968 $316,593 $0 $0 $316,593 $50,214,253 $601,602 $571,522 $318,454 $0 $0 $318,454 $52,275,125 $626,293 $594,978 $320,313 $0 $0 $320,313 $54,418,431 $651,971 $619,372 $322,170 $0 $0 $322,170 $5,222,117 $833,471 $6,055,588


TABLE A-2 JONES/NEW URBAN REVENUE GENERATION - DEVELOPER PROPOSAL

Period

Taxable Value

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

$0 $0 $0 $0 $26,608,400 $27,672,736 $28,779,645 $29,930,831 $31,128,065 $32,373,187 $33,668,115 $35,014,839 $36,415,433 $37,872,050 $39,386,932 $40,962,409 $42,600,906 $44,304,942 $46,077,140 $47,920,225

Incremental Incremental Present Lease NPV Lease NPV Total Value Taxes Total TIF Value Payment Payment Revenue $0 $0 $0 $0 1 $1 $1 $0 $0 $0 $0 1 $1 $1 $0 $0 $0 $0 1 $1 $1 $0 $0 $0 $0 1 $1 $1 $25,405,348 $304,374 $289,155 $251,982 1 $1 $251,983 $26,469,684 $317,125 $301,269 $253,660 79,694 $67,100 $320,761 $27,576,593 $330,387 $313,868 $255,331 79,694 $64,831 $320,163 $28,727,779 $344,179 $326,970 $256,995 79,694 $62,639 $319,634 $29,925,013 $358,523 $340,596 $258,653 79,694 $60,521 $319,173 $31,170,135 $373,440 $354,768 $260,304 79,694 $58,474 $318,778 $32,465,063 $388,954 $369,506 $261,950 135,249 $95,881 $357,831 $33,811,787 $405,089 $384,834 $263,591 138,630 $94,954 $358,545 $35,212,381 $421,869 $400,776 $265,227 142,096 $94,037 $359,263 $36,668,998 $439,320 $417,354 $266,858 145,648 $93,128 $359,986 $38,183,880 $457,470 $434,596 $268,486 149,290 $92,228 $360,714 $39,759,357 $476,345 $452,528 $270,110 198,555 $118,516 $388,625 $41,397,854 $495,975 $471,177 $271,730 203,519 $117,371 $389,101 $43,101,890 $516,391 $490,571 $273,348 208,607 $116,237 $389,585 $44,874,088 $537,623 $510,742 $274,964 213,822 $115,114 $390,077 $46,717,173 $559,704 $531,719 $276,577 219,168 $114,001 $390,578 $4,229,766 $1,365,035 $5,594,801


TABLE A-3 JONES/NEW URBAN REVENUE GENERATION - PMG CALCULATION

Period

Taxable Value

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

$0 $0 $0 $0 $26,608,400 $27,672,736 $28,779,645 $29,930,831 $31,128,065 $32,373,187 $33,668,115 $35,014,839 $36,415,433 $37,872,050 $39,386,932 $40,962,409 $42,600,906 $44,304,942 $46,077,140 $47,920,225

Incremental Incremental Present Lease NPV Lease NPV Total Value Taxes Total TIF Value Payment Payment Revenue $0 $0 $0 $0 1 $1 $1 $0 $0 $0 $0 1 $1 $1 $0 $0 $0 $0 1 $1 $1 $0 $0 $0 $0 1 $1 $1 $25,405,348 $304,374 $289,155 $251,982 1 $1 $251,983 $26,469,684 $317,125 $301,269 $253,660 265,462 $223,512 $477,173 $27,576,593 $330,387 $313,868 $255,331 265,462 $215,954 $471,285 $28,727,779 $344,179 $326,970 $256,995 265,462 $208,651 $465,646 $29,925,013 $358,523 $340,596 $258,653 265,462 $201,595 $460,248 $31,170,135 $373,440 $354,768 $260,304 265,462 $194,778 $455,082 $32,465,063 $388,954 $369,506 $261,950 484,463 $343,445 $605,395 $33,811,787 $405,089 $384,834 $263,591 496,575 $340,127 $603,718 $35,212,381 $421,869 $400,776 $265,227 508,989 $336,841 $602,067 $36,668,998 $439,320 $417,354 $266,858 521,714 $333,586 $600,444 $38,183,880 $457,470 $434,596 $268,486 534,757 $330,363 $598,849 $39,759,357 $476,345 $452,528 $270,110 785,898 $469,095 $739,205 $41,397,854 $495,975 $471,177 $271,730 805,546 $464,563 $736,293 $43,101,890 $516,391 $490,571 $273,348 825,684 $460,074 $733,423 $44,874,088 $537,623 $510,742 $274,964 846,326 $455,629 $730,593 $46,717,173 $559,704 $531,719 $276,577 867,485 $451,227 $727,804 $4,229,766 $5,029,445 $9,259,211


TABLE A-4 PRIME REVENUE GENERATION - DEVELOPER PROPOSAL

Period

Taxable Value

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

$0 $0 $10,421,000 $10,837,840 $11,271,354 $11,722,208 $12,191,096 $12,678,740 $13,185,889 $13,713,325 $14,261,858 $14,832,332 $15,425,626 $16,042,651 $16,684,357 $17,351,731 $18,045,800 $18,767,632 $19,518,338 $20,299,071

Incremental Incremental Present Lease Parking NPV Lease NPV Total Value Taxes Total TIF Value Payment Payment Payment Revenue $0 $0 $0 $0 $1 $1 $1 $1 $0 $0 $0 $0 $1 $1 $1 $1 $10,421,000 $124,851 $118,608 $110,722 $1 $12,001 $11,203 $121,925 $10,837,840 $129,845 $123,353 $111,257 $1 $12,001 $10,824 $122,081 $11,271,354 $135,039 $128,287 $111,795 $1 $12,001 $10,458 $122,253 $11,722,208 $140,440 $133,418 $112,335 $14,266 $26,266 $22,115 $134,450 $12,191,096 $146,058 $138,755 $112,877 $14,266 $26,266 $21,367 $134,245 $12,678,740 $151,900 $144,305 $113,423 $14,266 $26,266 $20,645 $134,067 $13,185,889 $157,976 $150,077 $113,970 $14,266 $26,266 $19,947 $133,917 $13,713,325 $164,295 $156,080 $114,521 $14,266 $26,266 $19,272 $133,793 $14,261,858 $170,867 $162,324 $115,074 $21,398 $33,398 $23,676 $138,751 $14,832,332 $177,702 $168,817 $115,630 $21,826 $33,826 $23,169 $138,799 $15,425,626 $184,810 $175,569 $116,189 $22,262 $34,262 $22,674 $138,863 $16,042,651 $192,202 $182,592 $116,750 $22,708 $34,708 $22,192 $138,942 $16,684,357 $199,890 $189,896 $117,314 $23,162 $35,162 $21,722 $139,037 $17,351,731 $207,886 $197,492 $117,881 $28,531 $40,531 $24,193 $142,073 $18,045,800 $216,201 $205,391 $118,450 $29,102 $41,102 $23,704 $142,154 $18,767,632 $224,849 $213,607 $119,023 $29,684 $41,684 $23,226 $142,249 $19,518,338 $233,843 $222,151 $119,598 $30,277 $42,277 $22,760 $142,358 $20,299,071 $243,197 $231,037 $120,175 $30,883 $42,883 $22,306 $142,481 $2,076,984 $365,457 $2,442,441


TABLE A-5 PRIME REVENUE GENERATION - PMG CALCULATION

Period

Taxable Value

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

$0 $0 $10,421,000 $10,837,840 $11,271,354 $11,722,208 $12,191,096 $12,678,740 $13,185,889 $13,713,325 $14,261,858 $14,832,332 $15,425,626 $16,042,651 $16,684,357 $17,351,731 $18,045,800 $18,767,632 $19,518,338 $20,299,071

Incremental Incremental Present Lease Parking NPV Lease NPV Total Value Taxes Total TIF Value Payment Payment Payment Revenue $0 $0 $0 $0 $1 $1 $1 $1 $0 $0 $0 $0 $1 $1 $1 $1 $10,421,000 $124,851 $118,608 $110,722 $1 $12,001 $11,203 $121,925 $10,837,840 $129,845 $123,353 $111,257 $1 $12,001 $10,824 $122,081 $11,271,354 $135,039 $128,287 $111,795 $1 $12,001 $10,458 $122,253 $11,722,208 $140,440 $133,418 $112,335 $34,712 $46,712 $39,331 $151,665 $12,191,096 $146,058 $138,755 $112,877 $34,712 $46,712 $38,001 $150,878 $12,678,740 $151,900 $144,305 $113,423 $34,712 $46,712 $36,716 $150,138 $13,185,889 $157,976 $150,077 $113,970 $34,712 $46,712 $35,474 $149,444 $13,713,325 $164,295 $156,080 $114,521 $34,712 $46,712 $34,274 $148,795 $14,261,858 $170,867 $162,324 $115,074 $63,349 $75,349 $53,417 $168,491 $14,832,332 $177,702 $168,817 $115,630 $64,933 $76,933 $52,695 $168,325 $15,425,626 $184,810 $175,569 $116,189 $66,557 $78,557 $51,987 $168,176 $16,042,651 $192,202 $182,592 $116,750 $68,220 $80,220 $51,293 $168,043 $16,684,357 $199,890 $189,896 $117,314 $69,926 $81,926 $50,612 $167,926 $17,351,731 $207,886 $197,492 $117,881 $102,766 $114,766 $68,503 $186,383 $18,045,800 $216,201 $205,391 $118,450 $105,335 $117,335 $67,668 $186,118 $18,767,632 $224,849 $213,607 $119,023 $107,968 $119,968 $66,847 $185,869 $19,518,338 $233,843 $222,151 $119,598 $110,667 $122,667 $66,039 $185,637 $20,299,071 $243,197 $231,037 $120,175 $113,434 $125,434 $65,245 $185,421 $2,076,984 $810,589 $2,887,573


PMG Measurement of Economic Impact