Lost Revenue Opportunities

With increased development interest and demand, process delays and communication challenges have become part of the development landscape. This has resulted in potential deferred revenue associated with taxes, development fees, and economic impact.

Due to the substantially complex nature of the development process itself, and the multiple lanes of development, it is impossible to definitively quantify the exact dollar amount lost through process delays; however, reasonable assumptions can be made about calculating potential impacts of processing delays.

When thinking about lost revenue, a visual example of a bell curve is helpful when contemplating delays and projects that fall past the standard published timelines. Using the sample bell curve chart below, if a standard development process could be completed in a certain number of calendar days, all projects that fall to the right of the peak of the bell curve would result in lost revenue through potential taxes, development fees and economic impact.

As an example, using the total year-to-date (January – September) commercial valuations of $2.68B realized through 1,705 commercial permits, the average project valuation would be $1,571,848 (Table 8).

Using the same assumptions, for every delay defined in weeks, the number of total projects reaching final development approval results in an estimated loss over $496 million in only tenweeks’ time (Table 9).

This results in a potential tax loss ranging from $57,108 to $1,427,702 (Table 10).

The projected loss in economic impact circulating through the Fort Worth economy is illustrated in Table 11 below.

Using $10,000 as the average development fee for the sample project valuation, the potential loss in development fees could also be calculated (Table 12).