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Home My WebLink AboutRESPONSE - RFP - 7428 ON-CALL FINANCIAL SERVICESProposal The Economics ofLand Use On -Call Financial Services Proposal No. 7428 Prepared for: City of Fort Collins Prepared by: Economic & Planning Systems, Inc. October 4, 2012 Economic & Planning Systems, Inc. 730 17th Street, Suite 630 Denver, CO 80202-3511 303 623 3557 tel 303 623 9049 fax EPS #123078 Berkeley Den ver Los Angeles Sacramento www.epsys.com RTD FasTracks Joint Development, Denver, Colorado Client Regional Transportation District Project Description EPS is assisting RTD TOD staff with the implementation of joint development and TOD partnerships at FasTracks station locations. EPS is providing a range of market and financial analysis services including market studies, pro forma financial analysis, public -private development partnerships, and strategies and assistance with development solicitations and negotiations. Specific assignments have included negotiation support on a development agreement and long-term lease for the Denver Union Station redevelopment and real estate market and financial analysis and developer negotiations for the four selected TOD Pilot Projects at the Alameda, Olde Town, Federal Center, and Welton stations. Pilot Project tasks have included: Providing ongoing financial analysis in support of the successful execution of a developer agreement and purchase and sale of an RTD surface parking lot to develop a new light rail plaza and a 200-unit multifamily apartment project at the Alameda Station; Facilitating a two-part community workshop co -sponsored by the Urban Land Institute (ULI) regarding the potential development of an RTD surface lot to expand knowledge of the local market context and the potential for low-income housing tax credits to catalyze future development at the Welton Street Station; • Providing preliminary market context for a half -day workshop to facilitate the initial stages of a public partnership between RTD, the City of Lakewood, and the federal GSA for the future master development of the Federal Center Station. Deliverables - RFP proposal evaluations - DUS developer selection and negotiation - Financial proforma model - Alameda station sale terms review and evaluation Outcomes - Purchase and sale agreement for Alameda Station - Denver Union Station developer selection - DUS term sheet under negotiation Reference Bill Sirois Manager of TOD RTD-Denver (303) 299-2417 bill.siroisCalRTD- Denver. com Denargo Market Tax Increment Financing Negotiations, Denver, Colorado Client Cypress Development Project Description The Denargo Market site is a 28 acre redevelopment in Denver's River North or "RiNo" neighborhood northeast of Downtown Denver. The property was named after the farmer's market that o�erated on the site during the first half of the 20t century. After the market closed, the property was gradually developed with industrial uses including junkyards. As a result, the property had extensive subsurface contamination that required remediation, estimated at $3.2 million. As part of the project's entitlements, the developer was required to dedicate land for a park along the Platte River Trail. Cypress applied to the Denver Urban Renewal Authority (DURA) for tax increment financing (TIF) revenue to offset the remediation and park development costs. Cypress retained EPS to conduct and independent third party market and financial feasibility review of the project. Key issues addressed by EPS included the competitive position of the Denargo project compared to other proposed competitive residential projects, the expected revenue from land sales to vertical developers, and Cypress' expected rate of return on the project with and without TIF. DURA's policy is that TIF should only be used to fund the gap needed to make a project attractive to private investment. DURA therefore requires developers requesting TIF to demonstrate that the project could not process without public financing; a "but for" test. The measure of this "but for" test is the anticipated rate of return on the project with and without TIF. EPS prepared a land development pro -forma that estimated the project's rate of return, based on expected land values, residential absorption, and development costs. Assumptions in the proforma were supported by market research on competitive developments and comparable land sales, documented in a memorandum with supporting tables, maps, and charts. DURA awarded the project $2.4 million in TIF, to be refunded to the developer as it accrues. The project's first phase began construction in late 2011. Deliverables Financial proforma TIF forecasts DURA negotiations Outcomes - DURA awarded $2.4M in TIF - First Phase under construction Reference Nic Whittaker Asset Manager Trustland Development Co. (512)615-1594 nwhittaker(a)trustlanddevco.com Colorado Regional Tourism Act, State of Colorado Client State of Colorado Office of State Planning and Budgeting (OSPB) and the Office of Economic Development and International Trade (OEDIT) Project Description EPS was selected by the State of Colorado Office of State Planning and Budgeting (OSPB) and the Office of Economic Development and International Trade (OEDIT) to serve as the Third Party Analyst to evaluate proposals under the new Regional Tourism Act (RTA) legislation. The RTA provides a mechanism for the State to award state sales tax increment funding to up to two tourism projects each year. EPS' role was to independently review each project application and determine the proportion of sales tax revenue generated by the Project that is new to the State, as well as the economic and fiscal impacts of the Project. The State received six project applications from around the State in the 2011-2012 application cycle. The highest profile and most controversial project application proposed a 1,500 room Gaylord Hotel and Conference Center and to relocate the National Western Stock Show facilities from Denver to Aurora. Other applications proposed a year-round ski adventure park in Estes Park; expansions to the Convention Center and Riverwalk in Pueblo; $1.4 billion of dispersed recreation improvements and municipal capital projects in Montrose County; a paleontological museum and sports complex in Douglas County; and a Riverwalk entertainment district in Glendale. For each project application, EPS quantified total project visitation, the proportion of visitors estimated to be new to the State, and the amount of sales tax generated by the Project net of competition with existing facilities. EPS also evaluated the Projects' financing plans to answer the question: "but for" the State funding, could the project be built in the foreseeable future? The State relied on EPS' visitation and revenue estimates in its decision to award funding to the Gaylord Hotel and Pueblo Riverwalk Projects. N WAGE IF I Deliverables - Six RTA project application analyses - Financial proforma models - Determination of net new economic activity to State Outcomes - Economic Development Commission accepted - EPS' analysis and basis for selecting two projects at the determined funding levels. Reference Erick R. Scheminske Deputy Director Office of State Planning and Budgeting (303)866-3024 erick.scheminske(a)state.co.us I .• Winrock Town Center and Quorum at ABQ Uptown —Albuquerque, New Mexico Client Winrock Partners LLC Hunt Development Properties Project Description The Winrock Mall is being redeveloped as a mixed use town center. It will retain the existing department store anchors while the aging mall is demolished to build an open-air retail and entertainment center. The Quorum at ABQ uptown is an adjacent 7-acre former school site to be developed as an infill mixed use office, hotel and higher density residential development. Both projects are in the aging Uptown major activity center area. EPS conducted a feasibility study to verify and validate the market potentials, and revenue and financing forecasts and assumptions. EPS also conducted a comprehensive fiscal impact analysis for the City of Albuquerque to determine the portion of City tax dollars needed to cover operation and maintenance costs associated with the project. Based on the fiscal analysis, the two projects were approved for over $130 million in public financing based on 75 percent of the future property and 70 percent GRT tax revenues to support revenue bonds to pay for the eligible public improvements. Deliverables - Project market analysis - Financial feasibility analysis - Public financing package - Fiscal and economic impact analysis Outcomes Approval for $160 million in tax increment financing from the City of Albuquerque and the State of New Mexico utilizing a Tax Increment for Development District (TIDD). Reference Michael Kelly, CMB, President Realty Mortgage & Investment Co. (505)830-7664 mkellyag10RMIC.com Winrock Site Plan ;o ..' y WP_ r Silverthorne Home De Client Town of Silverthorne, CO Fiscal Impact Analysis, Silverthorne, Colorado Project Description In 2009, EPS performed a Fiscal and Economic Impact Analysis as part of the pre -development negations for a proposed 118,000 square foot, $23 million dollar Home Depot store in the Town of Silverthorne, CO. As part of its application, The Home Depot sought to participate in the Town's enhanced sales tax incentive program (ESTIP), established to attract new retail businesses to the Town that generate new retail sales tax revenues and expand the local economy. The ESTIP allows the new or expanded retail business to apply for up to 50 percent of the eligible net new sales tax revenues to be used to fund specified public expenditures. As part of the ESTIP application, EPS conducted a retail sales flow analysis that estimated the net new retail sales and related sales tax revenues that the Town can reasonably expect to receive. This sales flow analysis considered the market demand of the existing trade area, the increased leakage capture of the surrounding area, and the estimated displacement of existing home improvement stores in the Town. The development application also required an economic and fiscal impact analysis that quantified expected net annual costs and revenues to the Town based on the direct and indirect impacts of the project. EPS estimated total revenues and expenditures incurred by the Town as a result of the proposed development. In addition, new employment generation and its effect on the current employment base was also estimated. The resulting analysis demonstrated a net positive fiscal and employment impact to the Town. T!4 n =Itulv� »� Deliverables - Fiscal impact analysis report - Net new sales tax forecasts - ESTIP terms proposal Outcomes Project has not moved forward References Carolynne White Attorney Brownstein Hyatt Farber (303)223-1197 cwhite(�bhf-law.com Brian Cannard The Home Depot Real Estate Manager, Northwest Division (206)574-3578 brian cannard(alhomedeoot.com San Juan County Economic Base Forecasts, New Mexico Client San Juan County and Farmington, New Mexico Project Description A coalition of business leaders in the coal mining, power generation, and oil and gas industries formed a committee known as the E>P Committee to begin a collaborative economic development program for the San Juan County region. The committee was formed out of concerns that the area's resource based economy is declining. The San Juan basin oil and gas resources have passed peak production, and one of the two coal fired power plants recently announced it would close three of its five generating units, and the entire plan may close in the coming years due to the high cost of retrofitting new pollution control technology. EPS was retained by the E>P Committee and San Juan Economic Development Services to develop an economic base analysis of the county to educate the public on the contributions and impacts of each industry, and to underscore the negative impacts of a loss of energy and extractive industries. EPS quantified the major economic drivers in the County and forecasted the impacts to employment and unemployment, population, and major local government revenues resulting from a decline in these industries over 20 years. The E>P committee is using the study as part of an education and PR effort to build support for a broader economic development and workforce training program. Deliverables - A slideshow on economic base multipliers and a written report directed at local decision makers and news media. Outcomes Study was used as an initial communication tool. The County is now evaluating options for additional workforce training to educate the fast growing labor force. Reference T. Greg Merrion Merrion Oil & Gas (505)324-5300 TGREGCamerrion.bz Louisville Fiscal Impact Analysis, Louisville, Colorado Client City of Louisville Project Description EPS has been hired by several developers to complete fiscal impact analysis on their projects as a part of the development submittal process in the City of Louisville. The projects EPS have analyzed have varied greatly from a larger, single user office campus to a proposed new church and tennis center, as well as residential and commercial developments. The City of Louisville required EPS to modify the comprehensive plan fiscal model to generate a fiscal impact model that analysis the specific uses and aspects of each project. The fiscal impact analysis evaluates the operation and capital revenues and costs generated by the proposed development. EPS has provided the results of the analyses in concise, easy to understand memorandums and presentations that allow City Staff and elected officials to easily understand the unique aspects of each project and assumptions used to measure the fiscal impact of the projects. Deliverables - Fiscal impact analysis - Reports for four complete projects Outcomes Three approved projects and one still under review References North End Development Fiscal Impact Analysis Michael Markel, President Markel Homes (303)449-8689 michael(d)markelhomes. com Takoda Village Fiscal Impact Analysis (now Steele Ranch Rick Brew RMCS, LLC (303)448-1870 rick(�rmcslanclxom Conoco Phillips Fiscal Impact Analysis Les Carnell Finance Consultant ConocoPhillips Company (918)661-0320 les.carnell(o)conocophillips.com Louisville Safeway Fiscal Analysis Jim Loftus Loftus Developments, LLC (303)938-1329 jrl(c0loftusdevelopments.com PROJECT TEAM ROLES AND RESPONSIBILITIES � I Daniel R Guimond, Principal I Project Manager / Primary Contact I Analysis Impact Analysis I I I I I I I � I ' I I I I I I I Chris Leutzinger Brian Duffany I Senior Associate Vice President I I I I I I i I I I Matt Prosser j David Schwartz I Associate Senior Associate I I I I I \ i The (f' 1 Team Project Manager The primary project manager will is Daniel Guimond. His contact information is as follows: 730 17th Street, Suite 630, Denver, CO 80202; (303) 623-3557; dguimond(&eosdenver.com Economic & Planning Systems, Inc. 7 Project Team PROJECT BUDGET AND SCHEDULE EPS can be available on short notice to provide financial or economic and fiscal impact evaluations of City incentives. With adequate notice, in most cases, an analysis can be completed within 30 days. The budget for each analysis would be prepared on a case -by -case basis. However, based on our past experience with similar projects with the City, we anticipate that a concise analysis and memorandum can be prepared for most projects for approximately $5,000 to $10,000. Table 1 2012 Hourly Staff Billing Rates Principal $210 Vice President $170 Senior Associate $140 Associate $115 Research Analyst $80-$90 Production and Administrative Staff $75 Billing rates updated annually. Economic & Planning Systems, Inc. 8 Project Budget and Schedule Key Personnel Resume October 4, 2012 Mr. Joshua Birks Economic Health Director City of Fort Collins 215 North Mason Street 2nd Floor Fort Collins, CO 80524 Subject: On -Call Financial Services — Proposal No. 7428; EPS #123078 Dear Josh: EPS is pleased to submit this proposal to provide independent financial feasibility analyses and economic and fiscal impact analyses for projects seeking tax The Economics of Land Use increment financing or business incentives to the City of Fort Collins. We are very interested in continuing our work with the City on these important economic development activities. As you know, EPS is a full -service economic consulting firm with over 40 professional staff and offices in Denver, Colorado and Berkeley, Los Angeles, and Sacramento, California. The firm has a broad -based practice in real estate and land use economics including market and feasibility analysis, fiscal and economic impact analysis, public finance, redevelopment, and land use policy. EPS was founded on the principle that real estate development and land use -related public policy should be built on realistic assessment of market forces and economic trends, feasible implementation measures, and recognition of public policy objectives, including provisions for required public facilities and services. The firm's entire practice is focused on the Economics of Land Use, specifically the interrelationships between real estate development and municipal finance and land use policy. We have successfully completed numerous projects for the City comparable to the expected assignments under this on -call contract. We are proud of the quality of work we have conducted for the City in the past and look forward to the opportunity to work on future assignments. Included with this letter is EPS' proposal including Project Understanding and Approach, Scope of Work, List of Deliverables, Relevant Experience, References, and Resumes of assigned staff. I, Daniel R. Guimond, will be the overall project manager for any assignments under this proposed on -call contract. Please let me know if you have any additional questions. Economic & Planning Systems, Inc. 73017th Street, Suite 630 Sincerely, Denver, CO 80202-3511 303 623 3557 tel ECONOMIC & PLANNING SYSTEMS, INC. 303 623 9049 fax Berkeley Denver Los Angeles Sacramento Daniel R. Guimond Principal www.epsys.com DANIEL R. GUIMOND, PRINCIPAL Dan is a real estate economist and planner with over 30 years' EDUCATION experience in economic and financial analysis and development M.A., Urban Geography, planning for the public and private sectors. He has completed University of Colorado, over 100 real estate market and financial feasibility studies for 1976 retail, office, and mixed use projects at both newly developing and infill revitalization settings. He is has completed financial B.A., Political Science, university of Colorado, feasibility and economic impact analyses of public/private 1972 development partnerships and has advised real estate development firms and cities on a range of public financing, EMPLOYMENT HISTORY fiscal, and economic impact issues. 1999-present Principal SELECTED PROJECT MANAGEMENT EXPERIENCE Economic & Planning Systems, Inc. Mesa del Sol Market and Financial Analysis, Albuquerque, NM Market analysis, development programming, TIF financing, 1997- Principal, In Motion, Inc. fiscal impact analysis, and development strategies for 9,000 , acre infill project under development on a state land parcel. 1993-1997 Vice President, BRW Inc. Winrock Town Center Redevelopment, Albuquerque, NM Market analysis, financial feasibility, TIF financing and fiscal 1978-1992 Vice President, Hammer impacts for the redevelopment of the former Winrock Mall as a Siler, George Associates mixed use town center redevelopment. 1976-1978 Denver Union Station Market and Revenue Forecasts Evaluation, Planner, Jefferson Denver, CO County Planning Third party independent peer review of development program, Department market analysis and TIF revenue forecasts for the 40-acre Denver Union Station Downtown Development District and AFFILIATIONS Denver Union Station Project Authority (DUSPA). American Institute of Certified Planners Sandia National Labs Campus Commons Business Case Analysis, Albuquerque, NM Urban Land Institute Market analysis for private tenant opportunities and business International Downtown case analysis for financing development including the Association recommended alternative finance lease options. Denver Planning Board, Lowenstein Theatre Feasibility Analysis, Denver, CO 1992 to 2005 Market analysis and public financing for infill redevelopment ICSC Colorado Alliance including Tattered Cover bookstore, Twist and Shout music store, and an independent cinema. Midtown Corridor Redevelopment Study, Fort Collins, CO Project feasibility, market analysis, development potentials, and public/private financing strategy for an aging retail commercial corridor including the Foothills Mall. Buckley Annex Redevelopment Plan, Denver, CO Economic& Planning Systems, Inc. Development of a market analysis to forecast residential, retail, 730 17th Street, Suite 630 and office development potentials on the last remaining parcel Denver, CO 80202-3511 of the former Lowry Air Force Base. 303 623 3557 tel 303 623 9049 fax Diagonal Plaza Redevelopment Feasibility Study, Boulder, CO Market and financial evaluation of redevelopment options for an Berkeley aging 250,000 square foot community shopping center on a 25 Denver acre site in north Boulder. Los Angeles Sacramento www.epsys.com BRIAN L. DUFFANY, VICE PRESIDENT Brian Duffany is an economist and planner with 10 years of EDUCATION experience in land economics. Prior to joining EPS, his Master of Regional experience included commercial real estate valuations, market Planning, Cornell analysis and feasibility studies, and environmental consulting. University Brian has a broad base of experience in local government finance, fiscal impact analysis, transportation planning, Bachelor of Arts, Geology, Colby College demographic analysis, real estate development feasibility analysis, and financial and economic modeling. EMPLOYMENT HISTORY SELECTED PROJECT EXPERIENCE 2010-Present Vice President Colorado Regional Tourism Act Reviewer, State of Colorado Economic & Planning Served as the State's Third Party Analyst to review applications Systems, Inc. for State tax increment financing (TIF). Reviewed and revised 2007-2010 application development and revenue forecasts, project Senior Associate The Economics of Lang! l development pro-formas and determined the portion of project Economic & Planning • p p p p � revenues eligible for State TIF. Evaluated employment and Systems, Inc. spending multipliers using IMPLAN. 2004-2007 Associate Denargo Redevelopment, Denver, CO Economic & Planning Prepared a third party evaluation of the land development pro- Systems, Inc. forma for an 18-acre brownfield redevelopment project as part 1999-2001 of the developer's application to the Denver Urban Renewal Real Estate Analyst Authority for TIF. Performed market research on land sales, and value Research Group rental and ownership housing absorption to refine and provide LLC support for pro -forma inputs. Prepared an independent pro- 1997-1998 forma analysis and accompanying report. Environmental Geologist Dames & Moore Group Economic Base Scenarios, San Juan County, NM Economic base study and scenario modeling to estimate the AFFILIATIONS fiscal and economic impacts of a loss of jobs in oil and gas and American Institute of power generation. Industry impacts and contributions were Certified Planners estimated using the IMPLAN model. Fiscal impacts to local governments were modeled using methods developed by EPS. American Planning Association Study forms the basis of a new economic development program. Urban Land Institute Carbondale Fiscal Impact Model, Carbondale, CO Developed a fiscal impact model with Town staff for use in development review. The model estimates municipal revenues and service costs for the Town's General Fund and major departments. To date the model has been used to evaluate the proposed Marketplace, Thompson Park, and Overlook projects. EverVail Economic and Fiscal Impact Analysis, Vail, CO Prepared a fiscal impact analysis (FIA) of a proposed $1.1 Economic& Planning Systems, Inc. billion dollar resort base village development. Analysis included 73017th Street, Suite 630 estimates of retail sales and lodging cannibalization from Denver, CO80202-3511 existing establishments. Participated in and facilitated 303 623 3557 tel negotiations between the developer and the Town. Provided 303 623 9049 fax policy and negotiation recommendations to the Town Council. Berkeley Den ver Los Angeles Sacramento www.epsys.com DAVID T. SCHWARTZ, SENIOR ASSOCIATE David has a diverse skill set for solving land use economic issues within multiple contexts. His understanding of land use economics issues, such as public/private development feasibility, public finance mechanisms, economic impacts, and the assessment of regional economic conditions and trends, guides his work for clients. His background in mathematics, statistics, urban economics, and a familiarity with the implications of land use controls also complement his work. SELECTED PROJECT EXPERIENCE Economic Impacts of US Air Medical Transport Industry, Washington, D.C. Assessed the nationwide and regional direct, indirect and induced economic impacts of jobs and spending by the air The Economies o%Lrind Use medical transport industry on other industries. Surveyed US industry collecting programmatic and financial data on staffing, aircraft counts, annual contract, staffing and non -staffing operational expenditure, as well as capital reserves and frequency and magnitude of goods and service purchases. Uranium Mining Impacts & Forecasts, Montrose County, CO (Cal Regional economic analysis, estimation of socio-economic impacts from new uranium mining, manufacturing, and other industrial activity. Modeled dispersion of economic and fiscal impacts of employment and demographics in County. Provided geo-spatial 50-year employment -based population forecasts. Village Center Public Finance Options, Greenwood Village, CO Provided guidance to the City Council regarding the purpose, structure, functionality, and advantages and disadvantages of various public finance and organizational structures, such as URAs, DDAs, Metro Districts, GIDs, and SIDs, that exist to assist in the provision of a City's public infrastructure. Infrastructure Financing, Durango, CO Identified employment, population, and retail expenditure growth potential for La Plata County; documented expenditure in -/out -flow across neighboring county and state lines; projected non-residential development potentials over 20- years. Recommended appropriate public financing improvement district for issuing bonds and administrative objectives. Inclusionary Housing Rental Policy Update, Boulder, CO Analyzed the market and financing conditions surrounding the development of rental housing to formulate new policies that Economic& Planning Systems, Inc. better meet the City's overall affordable rental housing goals. 730 17th Street, Suite 630 Explored financial return implications of policy changes such as Denver, CO 80202-3511 adjusting AMI limits, cash in -lieu amount, adding a density 303 623 3557 tel bonus, and adjusting unit size proportionality. 303 623 9049 fax Economic Development Incentives and Impacts, Kansas City, MO Berkeley Forecasted revenues and expenditures under city-wide Denver scenarios to evaluate the short- and long-term effects of Los Angeles incentives, abatements, and debt service guarantees. The Sacramento findings constituted a series of alternative policies to guide the City's strategic investment in future projects. www.epsys.com EDUCATION Masters of City & Regional Planning, The Ohio State University, 2006 B.M., University of Cincinnati, 1999, magna cum laude Also attended: B.A., Miami University, 1994- 1997 EMPLOYMENT HISTORY 2009-Present Senior Associate, Economic & Planning Systems, Inc. 2006-2009 Associate, Economic & Planning Systems, Inc. 2004-2006 Planner, Department of Land Use & Long Range Planning, City of Dublin, Ohio 2002-2004 Technical Assistant, Citizens for Civic Renewal, Cincinnati, Ohio AFFILIATIONS American Planning Association, 2004- present Board Member, 2007- present, Denver Association of Business Economists ULI Housing Taskforce, 2008-present Colorado Symphony Sustainability Study Committee, 2011 el Sistema Budget Committee, 2011 CHRISTOPHER L. LEUTZINGER, SENIOR ASSOCIATE Chris Leutzinger has seven years of consulting experience in planning and real estate development with a particular expertise in urban redevelopment and public finance. Prior to joining EPS, Chris worked as a financial analyst, tracking the performance of urban residential development along the East Coast and Chicago. He has knowledge in fiscal impact analysis, public finance, and real estate finance and development. SELECTED PROJECT EXPERIENCE The Woodlands Incorporation Study, The Woodlands, TX Developed a comprehensive fiscal model for The Woodlands Township to estimate future ongoing budget requirements under potential incorporation, as well as upfront one-time capital expenditures necessary to become a stand-alone city. The Economics of hand U.w, Assessed current and future service levels based on a set of peer communities and analyzed the future revenue sources available to The Woodlands as a city under state legislation, including a potentially substantial impact to property taxes. Also, estimated the impact to water and wastewater utilities, as the existing Municipal Utility Districts (MUDs) that serve the Township would need to be consolidated under incorporation. Fiscal Impact and Cost of Growth Analysis, Basalt, CO Developed a comprehensive fiscal model for the Town of Basalt to analyze the fiscal impacts of two large developments in the planning process, Willits Town Center and Stott's Mill. Developed a set of net cost of growth factors for a number of prototypical residential products (single family, townhome, and condo) as well as retail and office formats. Presented results to staff and stakeholders to better inform the community of the fiscal implications of future land use policy. Park County Cost of Community Services Study, Fairplay, CO Developed a comprehensive fiscal model to analyze existing fiscal conditions in Park County as a result of the high ratio of out -commuters and second homes in the county. Identified existing ratio tax revenue to service costs for a variety of land uses, including residential and commercial. Determined the revenue -to -cost ratios under a variety of residential densities. Forecasted the fiscal effects of future development scenarios over the long-term to inform land use policy decisions and as well as potential fiscal mitigation. Milliken Comprehensive Plan and Fiscal Model, Milliken, CO Economic &Planning Systems, Inc. Developed a comprehensive fiscal model to analyze the 730 17th Street, Suite 630 potential fiscal impacts of three potential growth scenarios identified in the comprehensive planning process. Analyzed the 303 623 Denver, 35 9049 tel 7 tel 3s11 impacts of the existing development agreement in place between large private residential community and city. 303 623 049 fax Estimated potential mitigation solutions. Berkeley Louisville Fiscal Impact Analysis, Louisville, CO Denver Assisted a two private clients and the City of Louisville in Los Angeles determining the fiscal impacts of a proposed 430-acre corporate Sacramento campus along the US 36 corridor, as well as a proposed grocery store redevelopment on South Bolder Road. www.epsys.com EDUCATION Master of City and Regional Planning, University of North Carolina -Chapel Hill, 2008 B.B.A., Real Estate with High Honors, University of Georgia, 2003 EMPLOYMENT HISTORY 2011-present Senior Associate Economic & Planning Systems, Inc. 2008-2011 Associate Economic & Planning Systems, Inc. 2007 Project Researcher Preservation North Carolina 2004-2006 Senior Associate TriMont Real Estate Advisors 2003-2004 Commercial Appraiser Childers Associates AFFILIATIONS Urban Land Institute MATT PROSSER, ASSOCIATE Matt Prosser has a broad base of experience and education in EDUCATION planning, urban design, and real estate with four years of Master of Urban & consulting experience. He has worked on several projects in Regional Planning, resort communities studying both the fiscal impact of new University of Colorado at development and also the market demand for development. He Denver, 2008 also has background knowledge of land use and entitlement Bachelors of planning, real estate development and finance, and Geographic Environmental Design, Information Systems (GIS). University of Colorado at Boulder, 2005 SELECTED PROJECT EXPERIENCE EMPLOYMENT HISTORY Cost of Services Study, Copper Mountain, CO 2007-2010 Assessment of the cost to provide essential services to the Research Analyst II Copper Mountain ski area community. The study included a Economic & Planning comparative analysis of several base areas of ski resorts and Systems, Inc. resort towns to determine the competitive position of Copper 2005-2007 Mountain and best approaches to service provision and revenue Planner I generation for resort towns and base areas. Tetra Tech RMC Fiscal Impact Assessments, Louisville, CO 2004 Modeled the fiscal impact for a variety of development projects Infrastructure Planning in the City of Louisville. The City requires a fiscal impact Intern City and County of assessment for major developments. A modified impact model Denver has been created to incorporated factors from the City's comprehensive plan model and accurate determine project AFFILIATIONS specific revenues and costs. Modified models have been created American Planning for the proposed Conoco Phillips development, and North End Association and Steel Ranch mixed use projects. Urban Land Institute Adams County Comprehensive Plan, CO Currently modeling the fiscal impact of new growth on the County for development scenarios formed during the comprehensive plan process. Analyzed development fees and impact fees assessed in other counties to determine how Adams County compares to other counties and cities. Town of Superior Comprehensive Plan, Superior, CO Currently modeling the fiscal impact of new growth on the Town of Superior for development scenarios formed during the comprehensive plan process. Colorado Regional Tourism Act Reviewer, State of Colorado Served as the State's Third Party Analyst to review applications for State tax increment financing (TIF). Reviewed and revised application development and revenue forecasts and determined the portion of project revenues eligible for State TIF. Economic & Planning Systems, Inc. 730 17th Street, Suite 630 Denver, CO 80202-3511 303 623 3557 tel 303 623 9049 fax Berkeley Denver Los Angeles Sacramento www.epsys.com CONSULTANT BACKGROUND Economic & Planning Systems, Inc. (EPS) is a land economics consulting firm experienced in the full spectrum of services related to real estate development, the financing of public infrastructure and government services, land use and conservation planning, and government organization. EPS was founded on the principle that real estate development and land use - related public policy should be built on realistic assessment of market forces and economic trends, feasible implementation measures, and recognition of public policy objectives, including provisions for required public facilities and services. The firms' areas of expertise are as follows: • Real Estate Market and Feasibility Analysis • Public Finance • Fiscal and Economic Impact Analysis • Reuse, Revitalization, and Redevelopment • Housing Development Feasibility and Policy • Regional Economics and Industry Analysis • Land Use Planning and Growth Management • Open Space and Resource Conservation • Government Organization • Transportation Planning and Analysis • Asset Valuation and Repositioning Since 1983 EPS has provided consulting services to hundreds of public- and private -sector clients in Colorado and throughout the United States. EPS is located in Denver, Colorado, and Berkeley, Los Angeles, and Sacramento, California. EPS clients include cities, counties, special districts, education and other non-profit institutions, multi -jurisdictional authorities, property owners, developers, financial institutions, and land use attorneys. The professional staff of 40 includes specialists in public finance, real estate development, land use and transportation planning, government organization, and computer applications. The firm excels in preparing concise analyses that disclose risks and impacts, support decision making, and provide solutions to real estate development and land use -related problems. Economic & Planning Systems, Inc. 1 Consultant Background PROPOSAL Project Understanding and Approach The City of Fort Collins is seeking an economic consultant to provide on -call analyses for projects requesting business incentives and/or tax increment financing assistance. Although smaller projects are currently being reviewed by the Economic Health Office (EHO) staff, the City would like to have the resources of an experienced consultant in both financial pro forma analysis for evaluating larger and more complex TIF and other financial incentives to real estate projects, as well as fiscal and economic impact analysis to evaluate the broader benefits of a range of other incentives packages. Fort Collins is to be commended for the balanced and fiscally responsible way it approaches economic development and urban renewal incentives. Providing incentives, whether through tax increment financing (TIF), sales and use tax rebates, or other sources, should be granted to those projects or business for which there is a documented financial need and would not proceed "but for" the incentive. There should also be a clear public benefit from project or applicant, which can be defined fairly broadly to include enhanced City revenues, new or retained jobs, public amenities or infrastructure improvements, or a likely potential to catalyze additional economic growth or revitalization. Incentives should be evaluated judiciously to ensure that the public's investment is truly needed and that the funds are not enriching an applicant's bottom line, inflating land costs, or supporting business operations that are inefficient or that have questionable viability. The RFP points out TIF incentives and manufacturing use tax rebates as examples of the most common types of incentives the City offers. The approach to evaluating the need for and benefits of these incentives is different. TIF is typically a real estate development incentive that applies to the development phase of a real estate project. Evaluating the effect of TIF incentives requires examining a real estate development pro forma to ensure that the estimated costs and revenues are realistic and that the rate of return with TIF is not unreasonably high. A use tax rebate could apply to business operations or capital equipment or facility expenses for a new or existing business. Evaluating the justification for a use tax rebate can involve evaluating a real estate pro forma, or business operating expenses in order to judge the need for the incentive and may be less concrete than evaluating a TIF application. It can also be informative to evaluate the broader economic impacts of a business to determine or illustrate its importance in the local economy. Businesses that do not create substantial economic impacts could be given a lower priority in a competitive incentives process. EPS has been conducting financial, fiscal, and economic impact analyses for local and state governments throughout its 30 year history. Due to our long track record serving public and private clients, we have the unique ability to construct objective and credible analyses, and to gain the trust of both parties. Additionally, over the last 10 years, we have worked with the City of Fort Collins numerous times on all of the types of services expected to be needed under this on -call contract including the following projects: Economic & Planning Systems, Inc. 2 Proposal On -Call Financial Services October 4, 2012 • Front Range Village Financial Analysis and Negotiation • North College Marketplace TIF Financial Analysis • Foothills Mall Financial Model and Incentives Evaluation • Floodplain Ordinance Revisions Economic Impact Analysis • Large Format Retailer Incentives Package Analysis • East and West Neighborhood Zoning Amendment Economic Impacts EPS draws from its core practice areas of real estate market and feasibility analysis, and fiscal and economic impact analysis when evaluating economic development incentives. We begin by evaluating and understanding the market for a project or business and its potential for success; the City would not be advised to fund a project that does not have a viable business plan. EPS knows well the Fort Collins and Northern Colorado real estate market and can draw from this knowledge to streamline the initial market analysis needed to support pro forma inputs. We review pro formas and business operating expense data to ensure that an applicant is including only reasonable and directly related costs and revenues, and that these costs and revenues are in line with other comparable projects. Finally, we prepare transparent analyses with methods and assumptions documented, and concise conclusions and recommendations targeted to senior staff and/or elected officials as appropriate. Our approach to this assignment will be to continue to provide the same high quality and timely services we have been providing for Fort Collins and our other municipal clients for years. Scope of Work Financial Analysis Although each project is different, the primary tasks anticipated to be needed to review the financial feasibility of a real estate development or redevelopment project are as follows: Task 1: Development Program EPS will review and evaluate the proposed development program (including signed and prospective tenants), schedule, cost and revenue assumptions, and needed public improvements. Based on our knowledge of the Fort Collins market, we will also evaluate the underlying market assumptions on rents and/or sales prices, occupancy rates, and absorption. We will also conduct a site visit to better understand area market conditions and the public infrastructure and redevelopment improvements needed for the project. Task 2: Financial Model Review EPS will also obtain and review the applicant's submitted financial pro forma model and analysis with and without the requested public financial investments. EPS will sign a confidentiality statement agreeing to keep the project proprietary financial information confidential and will provide to the City summary information regarding estimated performance on an unleveraged basis. EPS will then construct its own financial model to evaluate the project against acceptable measures of return for public investment in a real estate development project. The analysis will calculate the developer's internal rate of return on a leveraged and/or unleveraged basis with and without public investment to determine 1) "but for" the public investment the project is financially infeasible, and 2) with the public investment the project is feasible with a reasonable IRR given current financial conditions and the associated level of developer risk. The analysis will be transmitted to the EHO/URA staff and the applicant in draft form for review and discussion. Economic & Planning Systems, Inc. 3 Proposal On -Call Financial Services October 4, 2012 Task 3: Applicant Meeting EPS will meet with the applicant and staff in person or by phone to review the draft financial analysis, identify any corrections needed, and to discuss any outstanding issues. If needed, the financial model will be revised and any additional sensitivity analyses will be performed. Task 4: Report and Presentation EPS will prepare a concise report to summarize its analysis and conclusions regarding the project's financial feasibility with and without TIF or other financing incentives. We will also attend a City Council meeting to present our conclusions and respond to Council questions. Fiscal and Economic Impact Analysis A comprehensive fiscal impact analysis is generally not warranted for business investment projects. These projects are considered for incentives because they are potentially bringing significant new jobs and other economic activity to the City. The objective is to identify the level of this new economic activity, but also to identify any major offsetting cost impacts, generally in the form or needed on- or off -site infrastructure improvements. The major tasks anticipated are as follows: Task 1: Project Evaluation EPS will evaluate the economic components of the proposed business investment program including new facilities cost, number and type of jobs, average wages by job class, and development timing and phasing. We will also meet with EHO staff to discuss the proposed incentives and the level of investment requested and the level of investment under consideration by staff on a preliminary basis. Task 2: Economic Impacts EPS will calculate the direct and indirect economic impacts of the proposed investments. Direct impacts will be measured in terms of jobs and wages, and corporate business volume in the local economy. The indirect and induced impact will be measured through an input output model (e.g., Implan or RIMS II). Task 3: Fiscal Impacts EPS will quantify the direct revenues gained by the City through sales and property taxes associated with the business investment (paid by the business not its employees). The revenues will be estimated on an annual basis over the period of investment as well as the time period for any incentives to be paid out. We will also measure the costs to the City associated with the incentives as well as any additional on- and off -site infrastructure needed to serve the project. A number of metrics can be used to evaluate the project benefits including the ratio of revenues to costs, and/or net revenues per new job as appropriate for the type of project under evaluation. Task 4: Fiscal and Economic Impact Report and Presentation EPS will prepare a concise fiscal and economic impact report for EHO staff review. We will consult with staff on refining the incentives package as necessary based on the impact analysis. We will also attend a City Council meeting to present our conclusions and respond to Council questions. Economic & Planning Systems, Inc. 4 Proposal LIST OF DELIVERABLES Financial Analysis • Financial pro forma model • "But for" determination of financing need • Recommended level of return on investment • Recommended level of TIF or ESTIP investment needed • Report and presentation Economic and Fiscal Analysis • Economic impact model results • Level of investment metrics and recommendations • Report and presentation Economic & Planning Systems, Inc. 5 List of Deliverables (f� Relevant Experience North College Marketplace Financial Analysis, Fort Collins, Colorado Client City of Fort Collins Project Description EPS conducted a "but for" analysis of the need for public financing for the North College Marketplace, a community shopping center in an underserved area anchored by a King Soopers marketplace superstore. The 27.83-acre site includes 10.95 acres of wetlands and storm water detention enhancements. The cost associated with these enhancements and other eligible public improvements totals approximately $7.94 million. EPS performed an independent and confidential analysis of the developer's project costs and revenues. The focus of the analysis was to determine the legitimacy of the request for public funds to offset the eligible public improvements. Based on the risk associated with the project, the targeted rate of return was estimated at 12.0 percent. EPS' analysis indicated that the proposed North College Marketplace project will generate an estimated 5.5 percent unleveraged internal rate of return (IRR) without any public investment. The addition of the $7.94 million in requested public investments will increase the estimated IRR to 11.4 percent, which was determined to be a reasonable and not excessive rate of return for this project. Outcomes - TIF agreement completed - Project built and opened in 2012 Reference Mike Freeman (Former CFO City of Fort Collins) CEO Rocky Mountain Innosphere (970)221-1301 mike.freemanCa>rmi2.ora