HomeMy WebLinkAbout03/18/2014 13 Cascade Mill Site Urban Economic AnalysisBUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting of: 3/18/2014
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ITEM TITLE:
SUBMITTED BY:
SUMMARY EXPLANATION:
Consideration of Urban Economic Analysis of Cascade Mill
Site.
Tony O'Rourke, City Manager
Joan Davenport, Strategic Project Manager
As a portion of the Lochner Associates contract for the Cascade Mill Redevelopment project,
an Urban Economist will be hired to assist the City in performing a Real Estate and Fiscal
Impact Study to provide land use recommendations related to the Mill site. Lochner has
presented the $45,000 proposal from Jones Lang LaSalle to conduct the study. The cost for the
study will be included in the amended Lochner Agreement. Attached is the proposal from Jones
Lang LaSalle and a brief memo of explanation from staff.
Resolution: Ordinance:
Other (Specify):
Contract: Contract Term:
Start Date: End Date:
Item Budgeted: Yes Amount:
Funding Source/Fiscal
Impact:
Strategic Priority: Economic Development
Insurance Required? No
Mail to:
Phone:
APPROVED FOR
SUBMITTAL:
RECOMMENDATION:
City Manager
ATTACHMENTS:
Description Upload Date
Economic Analysis Memo 3/12/2014
Proposal from JJL 3/12/2014
Type
Backup IMaterliall
Backup IMaterliall
0111 ,01,
Proposal to Perform Real Estate
and Fiscal Impact Study
Prepared for :
Tony O'Rourke - City Manager
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77
Prepared by:
JONES LANG
WJJJ LASALLE
Contact:
Reginald Ross, Econometrics Director
Jones Lang LaSalle Americas, Inc.
330 Madison Avenue, 4th Floor
New York, New York 10022
Phone: 212.418.2682
Email: reginald.ross@amj11.com
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1.1 Introduction and Overview
1.2 Experiences with Similar Work
1.3 Preliminary Thoughts on Approach
1.4 Proposed Staffing, Schedule and Pricing
1.5 Key Personnel
20I4 Jones Lang LaSalle IP, Inc. All rights reserved.
The business activities of Jones Lang LaSalle, Incorporated are conducted directly
and through its subsidiaries. Ali information contained herein is from sources
deemed reliable;' however, no representation or warranty is made to the accuracy
thereof
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1.1 Introduction
• Jones Lang LaSalle (JLL) has 180 corporate offices worldwide and
operations in more than 750 locations in 60 countries. We have
approximately 36,600 employees.
• We provide comprehensive integrated real estate and investment
management expertise on a local, regional and global level to owner,
occupier and investor clients.
• We are an industry leader in property and corporate facility management
services, with a portfolio of approximately 1.6 billion square feet
worldwide.
• Jones Lang LaSalle (JLL) has assembled a team of experienced and
talented economists and real estate professional from both within and
outside the firm with extensive econometric experience as well as
deep knowledge of the mechanics of real estate markets.
• We are pleased to submit this proposal for the preparation of Real
Estate and Fiscal Impact Analysis to the City of Yakima.
1.2 Experience with Similar Work
Experienced Research and Econometrics Group
• We have developed advanced statistical and econometric decision
models to assist our clients with assessing the economic impact of both
short and long term decisions in a local economy.
o We have done this successfully with public clients in New Jersey where
the State underwriting process must take into account not only the direct
validity of a project but also the indirect impact of a project on the
surround area from both a financial and state/local tax revenue
perspective.
▪ According to public records, our economic impact models have played
key underwriting roles in over $1B in taxpayer funding.
o During the past year, our clients have include Brick City Development
Corp (City of Newark), the New Jersey Economic Development
Authority(NJEDA), and The City of Philadelphia
• NJEDA — Statewide, county level, economic impact model
series(2010- Present)
▪ Implemented in 2009 and has provided economic and
tax revenue impact models for hundreds of funding
applications that have resulted over $1B of tax payer
funds disbursements —
• City of Newark — Economic Impact Analysis- (March 2013
thru October 2013)
• Current and pipeline projects direct and indirect impact
on local economy and tax base.
• City of Philadelphia — Real Estate Development Impact(
January 2014 - Present)
• Hired to calculate the local economic impact of
changes to the City's as -of -right tax abatement policy
in terms of jobs, earnings, and taxes.
1.3 Preliminary Approach
1. We would examine the proposed site(s) for likely development
possibilities given the new highway being considered.
2. This would be done based on a series of geospatial models designed to
show likely new development types given the increased levels of traffic
available to the site.
1. The models are based on historical data and typical development
patterns for sites with similar demographic and traffic profiles.
3. We would then reconcile our theoretical data this with local knowledge of,
and expectation for, the site given its history and place in the community.
4. For each of the resulting likely proposed development types and
occupancies, we would create generic real estate financial models.
5. Lastly, an econometric and implied new tax revenue analysis would be
applied to each of the models.
6. The results of the above analysis should allow us to imagine a high and
low range of likely future tax income streams, jobs, and economic activity
if the new infrastructure were to be built and expected new traffic patterns
meet estimates.
1.4 Proposed Staffing, Schedule, and Pricing
As we have done successfully in the past for these types of projects, JLL
will dedicate staff and work with its partner economists at the University
of Pennsylvania to ensure rigorous and defensible execution of the
probability, econometric, and real estate modeling required for this
project.
We would work to target the following milestones of production;
• Week One and Two— Data gathering and cleaning, initial model
frame work build out
• Week Three and Five— Model estimation and scenario building.
• Week Six and Seven —Draft model production and scenario write
up.
• Week Eight — Model finalization and report production
We estimate that we could complete this project for a maximum price of
$45,000.
1.5 Key Personnel
Reginald Ross
Econometrics Director
Current Responsibilities
Mr. Ross leads JLL's econometric modeling and forecasting effort for North America. He is also a
2013 winner of the firm's Da Vinci Award for Innovation for his economic modeling work.
Experience
• Developed econometric underwriting model for New Jersey Economic Development Authority's
investment arm to fulfill ongoing statutory requirement of proving jobs and tax benefits for taxpayer
funded developments. To date, the model has been used to underwrite over $1 billion of state loan
packages.
▪ Developed and maintain a nationwide series of forecasting models, including over 30 individual
regression models to project rent pricing in major US markets.
Collaborated with UC Berkeley economist, Dr. Ken Rosen developing an economic triggers model
for Related Companies' Westside Rail yards purchase option restructuring (largest RE transaction
in NY history).
• Developed a multiple linear regression model for projecting rent pricing over a two year period.
Collaborated with economists at Wharton Business School to refine and recast model in
"econometrically defensible" format for anticipated peer reviewed publication.
▪ Collaborated with Port Authority of NY/NJ on economic impact analysis for the World Trade Center.
▪ Worked with the Real Estate derivatives group of the International Securities Exchange on
structuring and pricing models for a proposed RE derivatives platform
• Currently, working on second model with several leading economists at Wharton using hedonic
modeling techniques to accurately project rents in areas where standard rental data does not exist
or is inaccurate.
• Structuring transaction for Charter school in Harlem.
• Currently working with City of Philadelphia on modeling adjustments to existing tax abatement
policy
Education and Affiliations
Mr. Ross received his MBA from the Wharton School of Business at the University of Pennsylvania.
He received his BA from Morehouse College in Economics with a Mathematics concentration.
Kevin C. Gillen Ph.D.
Senior Research Consultant
University of Pennsylvania
Current Responsibilities
Dr. Gillen is a Senior Research consultant at the University of Pennsylvania and is a respected
and well published economist in Pennsylvania
Experience
• With a background in urban economics and real estate finance, Dr. Gillen 's research and
consulting practice is concentrated in applied work in the analysis of real estate developments and
operation of real estate markets, including their fiscal, economic and financial implications.
This work is deployed in advising both public and private sector entities on the costs/benefits of
public policy options, as well as the design and implementation of local economic development
strategies.
• Dr. Gillen's past clients have included the Pew Charitable Trusts, the Delaware Valley Regional
Planning Commission, the Philadelphia Tax Reform Commission, First American CoreLogic, the
Philadelphia Redevelopment Authority, the Schuylkill River Development Corporation, the
Philadelphia Housing Authority, the William Penn Foundation, and the U.S. Geological Survey, to
name a few.
Education and Affiliations
• Dr. Gillen received his Ph.D. in Applied Economics in 2005 from the Wharton School of the
University of Pennsylvania, and received both the U.S. Department of Housing and Urban
Development Dissertation Award and Lincoln Land Institute Dissertation Fellowship.
• Dr. Gillen also serves as a board member of the Building Industry Association of
Philadelphia, the Pennsylvania Builders' Association and the Greater Philadelphia
Association of Realtors. Prior to attending Wharton, Dr. Gillen worked for the Federal
Reserve Board of Governors and HUD's Federal Housing Finance Agency (FHFA).
Patricia Raicht
Vice President, Research
Current Responsibilities
Patricia Raicht is the Vice President of Research for the Pacific Northwest Markets directing all
aspects of the local market research programs, output, and staff for Seattle, Bellevue and
Portland.
Experience
• Patricia focuses on expanding and deepening the research platform in Oregon and
Washington into a strong component of the firm's offering and integrated approach to client
service in the region. She brings a tremendous depth of research experience that enhances
leverage of the firm's collective knowledge of market dynamics in a way that guides strategic
decision making and identifies risks and opportunities.
• As Vice President of Research for the Pacific Northwest Markets, Patricia brings over 27
years of detailed experience in the commercial real estate industry to Jones Lang LaSalle.
Clients benefit from her knowledge of local and regional trends, as well as investment and
development opportunities.
• Her expertise in commercial real estate market trends is consistently applied to data
collection, aggregation, and interpretation to provide strategic market information regarding
current and future trends. Patricia is also recognized regionally as a leading real estate
market analyst, capable of creating and implementing strategies that benefit local
businesses and national corporations.
Education and Affiliations:
• BS with distinction, George Washington University, Masters Program, University of
California, Berkeley
• Building Owners and Managers Association, Cascadia Region Green Building Council,
Member and Past Co -Chair, Commercial Association of Brokers, Portland Area Business
Alliance, U.S. Green Building Council