LOT J— JACKSONVILLE, FL ECONOMIC AND FISCAL IMPACT ANALYSIS Ve. JOHNSON oare CONSULTING= ‘See, (tebe 21,2020 Economie and Fiscal pact Analysis for Lot J Entertainment District CCH. Johnson Consutg, Ine (Johnson Consulting) i ploasad te sui this report regarding the propose Lot J ‘evelopment projec, which part ofthe Jacksomvile Live! Sports and Entertainment Distt in Jason, Florida, Pursuant to ou engopemant, this report provides econemis and flaca inpact estmales associated with leech of the proposec program elements (resent, retal,ofce, hota, and parting) of the proposed evelopment, anc consiers Phase 1 ony (prevcuslyehnson Consulting prepared projections fer Phases 1 and 2 of the proposed projet). TH report assumes tho ful development plan outlined in this rpart. the analyzed lan doesnot rocaedi fl, projections wil ct be achieved, 2 cate inthe report Johnson Censuting has no responsi to update this report for events and circumstances occuring ater the ate otis report. As the scale of tho glbal COVIO-19 pandamic impacts stl uncertain, our report outings Ou assumptions based on experince em pravaus economi dsrupon, bu the acta! impact wil nt be mown for the foresceable futur. The ndings preseried haren rect analyses of primary and secondary cures of Infrmation. Johasen Consulting used sources deemed to be reliable, bu cannot qvaraniee thot accuracy. Moreover, some ofthe estimates and analyses presen inthis study are based en vends and assumptions, hich can result in aifzances Between projected resus and acts! resus. Because events and creunstances ‘requerty do net occur as expecod, those siferences may be material. Ths reports itended for the Cilens! ‘rtmal use and cannot be usd fer project unserriing purposes without Johnon Consulting's writen consent ‘Wi have enjoyed serving you on this engagement and lok ferward o providing you weh continuing serve, Sincerely CoH dobaans Contig «Ire GH. Johnson Consuting ne.cp | a JOHNSON 7 CONSULTING INTRODUCTION ‘The information and dita herein supports an economic and fecal impact analysis ofthe proposed Lot J in Jacksonville, Fld, which wil sve 6s Phase 1 of a major mixeduse development that wil vansbem sed ‘shape the fture ofthe Norhbank ae. ‘SITE AND PROPOSED D=VELOPMENT CGurenty a sutace parting le, he proposed development projects sratapcaly ocatd adacert to the 67,200- ‘seat TIAA Bank Fat and the 5,500-seat Daly’ Place amphitheater, and in immediate proximity of he Baseball Grounds of Jacksonvils and the Jacksonville Veterans Memorial Arena. Figure 1 shams the proposed projet ea, tghighing 3 Phases of development, including Lot J (Phase 1) which isthe subjoc ofthis report. Figure 1 Phase 1 (Lot J) compriss 40 residential unis Live! venue incusng 75,000 SF of ground level eal space, a 180-250,r00m hota, 700 surtace parking Spaces and 70 garage pething spaces. The key program elenents of Phase tare summarized in Figure 2om colin Lot-Phaset Devlopnent Budget (000) | $7000 s10s000 $16,000 _sr19000 $111,000 _s43200 PRIOR STUDIES Ate ine of preparing out analyses, 2 numberof sties had bean undertaken in rlaton to the propoted Lot J project: 1+ Jacksonile Apartments Resident! Marketabilly Study (June 2018) Vator Property Assos +The Offices at Sports Complex Consuting Report (Seplember 2018) ~ CBRE ‘Proposed Jecksonvle ve Hotel Market Study and Francia Projections (October 2018) CBRE “This report ntgrates and bls Upon data rom these prior susles: We have conduct a hightovl pot review ofthe pir studies std above Key assumptons and matics fom these studies form the basis of our malyses, ad a appropriate troughou our ropa. METHODOLOGY In order to prepare estnats ofthe economic and scl Impacts ofthe proposed development projet, Johnson Consutng pertormed he folowing tasks: 4. Reviewed mateils prepared by te Clant, and ether consutants and advisors to the Cent, eluding phasing dagzans and nancial projections forthe development 2, Performed an economic and fica impact analysis of Phaso 1 ofthe proposed project by i projct components, ucing an IMPLAN input-output model specially purchased fram INPLAN Grovp, LLC. IMPLAN is anaioray recognized model commenly used to estimate economic impacts. An input cutut modal analyzes the commodiies and income that namely fow tough the varous sectors of theFe on Aas | Oo 2 ve JOHNSON CONSULTING 3. Caleiated the ax revenues by jurisdiction ovr a 30-year ime pared. Our projections are preset nS ve 5 neremens and assume 8 2 year consvucton paras ESTIMATED ECONOMIC AND FISCAL IMPACT ANALYSIS men construction of the proposed development project i complete, real and offcw space i tested and ‘esidental units ar oceuie, various transactions occuring onthe imgroved ste will generate ongin, annual ‘ecanemic and fiscal impacts othe eel and regina economies ntl tansactions occuring within each project ‘element wil pple ou and generate indirect spending, induced sponding, neoased earings, and emyloyment 2 wo as various tax rvenves fr the eal econony. DEFINITIONS Econowic mPacT Economic impact is defined as incremental now spencing in an economy that is the rect rosut cf cortin actives, faces, or events. The levels of mpacs ere dened as allows: DIRECT SPENDING ~ is an expression ofthe sponding that conirs as a dec result ofthe project, being doveoped, For example, expanctures by shoppers, ners, and other business paton at he ‘vaious real premises onthe subject sear rect spending, INORECT SPENDING ~ consists of respending ofthe ini! or drectexpenctres, or the supply of ‘20d and saices resulting fram the inal drect spending atthe projet For example, a shopper's rect expenditure on a real purchase causes the store to purchase goods and ther items rom ‘suppliers. The pocion of thase store purchases that come fom within the lea, regional or state economies counted 9 nde spending INOUCED SPENDING ~ roprasenis changes in local consumption due to the personal speding by ‘omployoes whose incomes ae affects by dect and indirect spendin. Fr example, a wale atthe restaurant may spend more because helsh earns more. The amount of he ineroased income the ator spenis inthe local economy i alld induced spending. INCREASED EARNINGS ~ measures increased employee and wotkar compensation related to the root erg developed. This foie represents increased payall expenditures, incising bones paid to werkors locally. t also expresses how the employees of local Businesses shaw in the Increased ouput [EMPLOYMENT ~ measures the numberof jobs supported inte study area elated othe spending at ‘he development. Employment impacts statadin the numberof ful-ime equivalent obs Inarect and induced spending, Increased eamings, and employment ee estimated using ase of multipe ates ‘shown inthe Fie 3.ve JOHNSON CONSULTING Trae Spenang TRE po deed pane Increased Earnings 0589. pe $1 of direct spenang Epent FTE Joe) 13.349_per $1 mlion of eret spending FISCALIMPACT ANALYSIS Fecal impact anlyle measures the esate ax revenues resuting from dract spending on eatin ative, foaltes, or vents. For the nets, thecal impact estimates focus on major categories of nk rovenves that ar cccty affected bya resident, workr or vistors acuty~ sles ta, hotel motel tx ar bed tax, atl car surcharge, corporat ince tax, an propery tax. The current apleable tax rates are summarized in Figure 4 =e ote Ht Tax con fe ar uc amPeale Som st IMPACT OF RESIDENTIAL Fgura 5 summarizes th estimated spending and impacts associated wih the residential housing al he proposed evelopment, which i plenned to comprise 400 housing uns in Phase 1. As shown, in Year & the annul economic impact ofthe esicential component of the projects estimate to include $33 milion of ota spending 11 milion in increasec esings, and support 197 fltine equivalent jobs, In he same year, the nrual fics Impacts projected to include $24 milion in tax reverues to the tate an local goverments. Over & 30-year Patio, the fiscal impact ofthe residential component of the project Is projected to total $102.3 millon n tax Fioues— $< ona IMPACT OF RETAIL Fgure © summarizes he estimated spending and impacts associated withthe ret component ofthe soposed evelopment, which i planned to comprise 116,000 SF in Phase 1, including 76000 SF of rtall space in tho Livel venue ang 40,000 SF of ret space Inthe residential tower. As shown, In Year 5 the annual economic Impact of the real component is esate to include $79 milion of otal spending, $26 milion in nereased ‘earnings and 476 fuline equivalent job. In he same year, the anual fecal impact ls projected to Incase $3.3 rion in tax revenues to the sate and local governments, Over a 30-year pero, the ical impact of he real component ofthe projet is projected to otal $130.0 millon in tx ovenuos. Figure 6———— Same, Janson IMPACT OF OFFICE Fgue 7 summarizes te estimted spending end impacts assocsted wth the offce spece atthe proposed evelopment, which is planned to comprise 40,000 SF in Phase 1. As shown, in Year 5 the annual economic Impact ofthe ofce carponent othe proposed development is estimated to cud $32 millon of total pending, ‘$10 milion in increaee earings, and suppor 192 fulltime equivalent jbs. In the samo yoar, the aval Fecal Impact is projected to nclude $700,000 in tax revenues to the state and local governments. Over a 30-year eto, the cal imactof the ofc component the projec i projected to tal $27.7 millon in tax revenves, Figure?aa re SH Figue 8 summarizes the estimated spending and impacts associsied wih the proposad hoa at the proposed ‘ovelopment, which wil comprise 180-250 quest rooms In Phase 1. As shown, in Yeer 5 the annual economic Impact of the note component is estimated fo inctude $28.2 milion of tal spending. $8.5 millon in increased ‘earings, and support 187 fulime equivalent jobs. Inthe same year, the annual fscal pect is prow to Include $2.8 miton in tx revenues othe sate and local governments. Over a 30-year prod, the Fscal mpact of ‘he hot component is projected ott $118. millon In tax revenues. Figureos ve JOHNSON “, CONSULTING IMPACT OF PARKING Figure 9 summarizes the estimated spending and impacts essocised wih the proposed surface parking component tthe propoced development, which wil comprise 700 spaces in Phase 1. As shown, in Yoo 5 th annual economic impact ofthe parking component's estimated to include $8.6 millon of tol! spending, $28 millon in inereased earings, and support fultime equivalent job. Inthe same year, to annua ca mpact is projected to nude 6400000 in tax revenues to he stato an local governments. Over a 30-year pated, the acl impact ofthe parting component ie projected to ttl $150 millon in nx revenues Pique(ONE-TIME IMPACT OF CONSTRUCTION JOHNSON ve CONSULTING The consructon ofthe various components ofthe proposed development project wil create 2 one-time infix of spending to the market thereby esuling in a one-time ecaname and fiscal impact. Figure 10 stows the stmatod constuction impact, electing an estinsed conseton cost of $452 millon (hn 2020) vera two year consruton perc: (excding land, development, FFBE, contingency and other costs). As shown, ove the constuction period fr Phase 1, the fica! impact ofthe constuction of the prcec is estimated to toal $13.3, rion in tx overs Teta sa s2a0 DETAILED BREAKDOWN ECONOMIC MPACT s) Tota Spending 10 fiscal mPacr . Tout 02 3nt cl nt ry |e 280 ‘WME JOHNSON ser oe CONSULTING TOTAL IMPACT OF PROJECT Figue 11 summarzet the estmsied spending and impacts associated wih Lot J (or Phase 1), dung ‘onsincton and in year necoments and curulatvaly over 30-year period. As shown, and sated above, the constuction scivles ae estimated to generate $13.3 milon in fecal impact. Aer project opening. and “tabization in Year 5 fo annval esonomic impact ofthe proposed development is estimated o nce $179 lion of toa spending, $58 millon in mereased earings, and support 3,070 fume equiraent ots. nthe same year, the annual cal impacts proecad to nude $9.5 milion n tax roverues to the sata and local governments. Over @ year period, the fcal impacto he project Is projec to total $4022 millon in ax Figue tt Fgue 12 provides snapshot of the annusl economic and fecal impact ofthe proposed project, by project, lement ina stbitzed year of operation (Yea 5).roe ng re | ctr Vee. JOHNSON Lt 4 Jcksonite Fora © CONSULTING CONCLUSION ‘The proposed Lot J project and the broader development wil play aciteal role in enhancing the lang-term contro to this overall sucess in a varity of ays, 25 flows: + Rosidentik: Atracs a citca mass of residents tothe dowriown core, toa range of housing pes and ‘supports the veal urbanization ofthe local area, which i 8 trond being observed national sim cites. Now housing wil also suppor talent recruitment and retention by providing sources of labor close to employes 1 Reta Provides new and atractve retail opportunites for residents and vistors ako. This wl enhance the oreal image of Jacksonville and provide necessary amenities to cive demand tothe 0 + Office: 8 creasing the inventory of Cass A aie space inthe Notbank area, Lot J Development wi hop to attract now talont othe Jacksonile and Flerda economy, and help te alleviate curent fow of worters and businesses ou othe marketpnt tr | eter 2 ve JOHNSON CONSULTING ‘+ Hotel: Tho now hotel properils wil serve fo svengten the image of Jacksorvllo as 2 destraton for coors, group and lesure travelers. They wil alo inrease the cial mass of hotels inthe downtown cove, hereby helping to crive up Average Daly Rats (ADR) and Revenue per Avalabe Room (RevPAR) at ensting pogeties. The proposed hota in Lot J Development wil provide the support necessary to ‘slow busneses and cultura! atte o advance, ‘+ dobs: The motel assumes an average base salary of $33,600 for construction and permanant jobs, whichis conisnt wth cutent par capt income dela for Jacksonvale and Duval County. The rpact of Lot equates to an average salary for constuction and permanent jobs of $48,010 n Year 1, ralecing a ‘vatity of emplyment types and sssodated salary ranges, and Is corsislent with the average salon ‘eperidin ho Jacksorlle MetroplanStatisca Area (MSA) and Frida, [As it rlates to the exstng anchor atracions (TIAA Bank Field, Dall’s Place, the Baseball Grunds of -lacksonvile and the Jacksonville Veterans Memorial Arena), Lt J wil support ongoing patronage and swzess of these venues by proving a etcal mass of proximataactvy and an extenie Inventory of complementary ‘menos. Indead, the mpsct of Lot J (or Phase 1) wil be immense, with an estimated fica! impact $456.6 rilion vera 30-year paris,