A Gathering Place for Tulsa - INCOG Gathering Place for Tulsa. HR&A Advisors George Kaiser Family...

Economic and Fiscal Impacts

April 2013

A Gathering Place for Tulsa

HR&A Advisors George Kaiser Family Foundation: River Parks |2

Contents

Introduction: Open Space and Economic Development

Park Improvements

Recreational Impacts


Primary Impacts: Park Construction and Operations

Secondary Impacts: Retail and Property Value Impacts

Conclusion


Introduction: Open Space and Economic Development

HR&A Advisors George Kaiser Family Foundation: River Parks | 4

Signature parks create immense value for cities and regions, providing a rationale for both public and private investment.

Quality of Life Real Estate Premiums City Building

TourismNeighborhood DevelopmentArts & Culture

HR&A Advisors George Kaiser Family Foundation: River Parks | 5Fountain Square, CincinnatiImage: 3CDC

Fountain Square – Cincinnati, OH The High Line – New York, NY

Signature parks support tourism and retail spending.

Bolstering a Struggling Retail District: Redeveloping Fountain Square strengthened downtown Cincinnati’s status as a civic and retail amenity for the whole community.

Attracting Tourists to a New District: New York’s High Line has attracted millions of tourists and local residents to West Chelsea, strengthening neighborhood’s restaurants and stores, and to the City as a whole.


Signature parks increase property values for existing owners and can lead to substantial new private investment.

The High Line, New YorkImage: Iwan Baan © 2011

Millennium Park – Chicago, ILIncreasing Property Values: Property values have increased faster for buildings adjacent to Millennium Park, generating additional value for property owners and additional tax revenues for the City.

Discovery Green – Houston, TXTriggering Private Investment: Houston’s $30 million investment in a new downtown park has led to over $850 million in adjacent private development.


Park Improvements


The George Kaiser Family Foundation and the City of Tulsa have joined forces to create a new signature park.


The Park will include high-quality recreational and natural assets that complement Tulsa’s existing River Parks system.

Turtle Island The Lodge

The Sky Garden The Pond


The Park will also activate a currently underutilized site.

Today – Underutilized Property Future – Gathering Place for Tulsa

After redevelopment, the new park will serve as a major recreational and natural asset for Tulsans.


Recreational Impacts


Recreation: The Park will contain 75 acres of high-quality recreational and natural space in the heart of the City.


Tourism: HR&A evaluated similar signature parks in regional competitor cities in order to project visitation at the new Park.

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Lewis & Clark Landing: Omaha, NE River Walk: San Antonio, TX

Piedmont Park: Atlanta, GA Centennial Park: Nashville, TN


Tourism: The Park could attract over half a million annual visitors.

Piedmont Park 5,270,000 3,200,000Atlanta, GA 61%

Gathering Place for Tulsa

62%940,000 580,000Tulsa, OK

River Walk 2,140,000 1,200,000San Antonio, TX 56%

Lewis & Clark Landing

Centennial Park

865,000

1,590,000

590,000

1,000,000

Regional Population

Park Visitation

Omaha, NE

Nashville, TN

LocationSignature Park

68%

63%

Visitation As Share of Pop.

HR&A assumed that visitation at Tulsa’s new park would be in line with visitation at peer signatureparks as a share of total metropolitan area population.


Tourism: This level of visitation would place the Park among Tulsa’s top visitor attractions.

Comparison of Projected Park Visitation and Current Visitation at Local Attractions

400,000

550,000 580,000

1,030,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Oklahoma Aquarium Tulsa Zoo Projected TulsaRiverfront Park

Visitation

Current River ParksVisitation

Sources: Oklahoma Aquarium, Tulsa Zoo, Tulsa River Parks, HR&A

ProjectedGathering Place

Visitation


Economic and Fiscal Impacts*

*Impacts are shown for the park at full build-out, including Phases I and II.


Construction and operation of the Park will produce an immediate and ongoing economic stimulus for Tulsa.

Construction

*Economic output is the sum of spending by firms and individuals. Construction and operations spending will have a minimal localfiscal impact due to the exemption of construction spending from sales taxes and the exemption of the site from property taxes.

Construction Spending

Construction & Related Jobs

One-Time Economic Output*

Primary Economic Impacts

Operations

Secondary Economic Impacts

VisitationReal Estate Demand

Operating Spending

Park Operation & Related Jobs

Annual Economic Output*

Annual Park Visitation

Nearby Retail Sales

Sales Tax Revenues

Neighborhood Desirability

Nearby Property Value Increase

Property Tax Revenues


Primary Impacts:Park Construction and Operations


Construction - Spending and Jobs: An investment of $308 million to create a new signature park will support 1,630 local jobs.

The City of Tulsa and the George KaiserFamily Foundation are considering a totalinvestment of $308 million to create a newsignature park along the banks of theArkansas River.

Improvements include riverbank stabilization,landscaping, playgrounds, athletic facilities,infrastructure improvements, and nature trailsat the new Park, as well as improved streetconnections to Peoria Avenue along 31st Streetand 33rd Place.

This capital investment will support thecreation of 1,630 full-time construction andrelated jobs for the duration of construction,currently estimated to last two years.

*Includes construction, design and land acquisition costs

Total Construction and Related Spending:

$308M*

Local Construction Jobs Supported:

830

Total Local Jobs Supported:

1,630


Construction - Salaries: $119 million during the construction period.

Total Salaries Earned by Construction and Related Workers

Construction workers are projected to earn a total of $65M in wages and benefits each year. Non-construction jobs created as a result of construction are projected to earn an additional $54M.

$65M

$54M

$0

$20

$40

$60

$80

$100

$120

$140

Compensation($M

M)

Construction Workers Other Local Workers

$119M


Construction - Economic Output: A total of $460 million will be spent locally as a direct or indirect result of construction.

Total Economic Output Resulting from the Construction Process

The construction process will result in $236 million in direct local economic output; an additional $72million on land acquisition and certain design costs were excluded from the local impact analysis. Third-party company and worker spending could support $224 million in additional economic output.

$236M

$224M

$0

$50

$100

$150

$200

$250

$300

$350

$400

Economic Output($M

M)

From Construction From Multiplier Spending

$460M


Operations - Spending: $1.8 million annual expenditure on operations.

*Based on most recent operating budget projection; HR&A excluded $290,000 in projected spending on utilities from its economic impact analysis.

Break-Out of $1.8 Million Park Operating Budget*

$0 $100,000 $200,000 $300,000 $400,000

Office Supplies

Insurance

Equipment Maintenance

Cleaning, Maintenance & Repair

Grounds Keeping

Administration & Management Staff

Field Supervisory Staff

Maintenance Supplies & Support Staff

Operations Staff


Operations - Jobs: Park investments will support 35 permanent jobs.

Annual Operations

Budget: $1.8M

Operations Jobs Supported:

22

Total Jobs Supported:

35

The Park’s annual spending on operations will support 22 positions at the Park as well as 13 otherlocal positions.


Operations - Salaries: These jobs will earn $1.7 million in annual wages.

Total Salaries Earned by Park and Related Workers

Park jobs are projected to earn $1.7 million in wages and benefits each year. Non-Park jobssupported by Park operations are projected to earn an additional $400,000 per year.

$1.3M

$0.4M

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

Employee Compensation($M

M)

Park Workers Other Local Workers

$1.7M


Operations - Economic Output: $3.4 million each year as a direct or indirect result of Park operations.

Total Economic Output Resulting from Park Operations

The Park’s $1.8 million operating budget will result in a total of $3.4 million in annual economicoutput, or combined spending by the Park, its employees and its vendor firms.

$1.8M

$1.6M

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

Economic Output($M

M)

From Operations From Multiplier Spending

$3.4M


$0

$10

$20

$30

$40

$50

$60

Compensation Economic Output

($M

M)

Direct Multiplier

Long-Term Economic Impacts from Operations: Over 25 years, these impacts will serve as a major stimulus for Tulsa’s economy.

Impacts from Operations25-Year Net Present Value*

*Assumes discount rate of 6% and 2% annual inflation

The net present value ofwages and benefits paid tothe workers supported by Parkoperations spending couldtotal over $27 million over a25-year period, assumingmodest inflation.

The net present value ofeconomic output supported byPark operations spendingcould total over $55 million.

$27.3M

$55.7M


Secondary ImpactsRetail and Property Value Impacts


Retail: Visitors are expected to spend at new and existing retail and restaurants on Peoria Ave. and within the Park.

Within the Park

New Food & Beverage Retail

Peoria Ave.

Existing Restaurants and Stores


Retail: Local restaurants and stores could see $5.0 million in new annual sales due to the Park.

Food & Beverage Spending within the Park: 8,000 SF of planned park food & beverage facilities will generate $2.4M in annual sales.

New Restaurant and Retail Spending on Peoria Ave.: Park visitors will spend $2.6Mannually at Peoria Ave. restaurants and stores.

To project spending within the Park, HR&A applied sector-specific sales-per-square-foot ratios froma recent survey of retail spending conducted by the Urban Land Institute. To project incrementalretail spending on Peoria Ave., HR&A applied a modest share of the average daily spending atstores and restaurants by the tourists and residents projected to visit the park.

Improved Connectivity: Improvements to 31st St. and 33rd Pl. will increase the linkages between the park and Peoria.


Retail: Over 25 years, this increase in retail sales will exceed $82 million.

Annual Sales25-Year Net

Present Value*

Within the Park: Food & Beverage Spending $2.4M $40.0M

Peoria Ave.: New Restaurant and Retail Spending $2.6M $42.4M

Total New Retail Spending $5.0M $82.4M



Retail: Sales taxes will total over $200,000 per year, or over $3.3 million in over 25 years.

Annual Sales Taxes

25-Year Net Present Value*

To estimate local sales tax revenues, HR&A applied the sales tax rates for the City of Tulsa(3.167%) and Tulsa County (0.85%) to projected spending. HR&A assumed that all projected saleswould be subject to City and County sales tax.


Within the Park: Local Sales Taxes on Spending $98,000 $1.6M

Peoria Ave.: Local Sales Taxes on New Spending $104,000 $1.7M

Total New Local Sales Taxes $202,000 $3.3M


Property Values: Nearby property will increase in value after the creation of the Park.

Nearby Residential Nearby Retail


Between ½ Mile and ¼ Mile of the Park• $320M in current residential market value• $40M in current commercial market value

Within 500 Feet of the Park• $68M in current residential market value• $8M in current commercial market value

Property Values: HR&A reviewed property values for sites within ½ mile of the Park, currently totaling nearly $600 million.*

Between 500 feet and ¼ Mile of the Park• $162M in current residential market value• $1M in current commercial market value

Total Study Area• $550M in current residential market value• $49M in current commercial market value

*HR&A excluded properties located within the park’s future boundaries as well as industrial properties located across the Arkansas River.


Property Values: HR&A projected a conservative increase in nearby property values following the Park’s completion.

Between ½ Mile and ¼ Mile of the Park $360M $8.0M

Between 500 feet and ¼ Mile of the Park

$163M $5.5M

Current Market Value

Increase in Market Value

HR&A projected a modest, 5% increase in property values for sites closest to the park, with asmaller increase for sites located further away but still within walking distance, based on studiesassessing park-related property value impacts for similar cities. This projection is intentionallyconservative and is likely to underestimate property value impacts.

Total Study Area $599M $17.3M

$76M $3.8MWithin 500 Feet of the Park


$53,000 $0.9MWithin 500 Feet of the Park

$113,000 $1.8MBetween ½ Mile and ¼ Mile of the Park

Property Values: This increase in value would produce incremental property taxes.

$77,000 $1.3M

New Annual Property Taxes

25-Year Net Present Value*

To estimate property tax impacts, HR&A applied current property tax rates for the eleven entitiesreceiving property tax revenues, including the City of Tulsa, Tulsa County, the Tulsa School Districtand other related local entities, totaling 12.8%. Assessed value is approximately 11% of marketvalue in Tulsa, resulting in an effective tax rate of 1.4% of market value.

$243,000 $4.0M

Between 500 feet and ¼ Mile of the Park

Total Study Area


Conclusion


The construction and operation of Riverfront Park will produce an immediate and ongoing economic stimulus for Tulsa.

Construction Spending

*Minimal direct local fiscal impact from construction and operations spending due to exemption of construction spending from sales taxes and exemption of site from property taxes.

Operations Spending

Stimulus: $1.7M ann. operating budgetStimulus: $308M to create new

signature park

Job Impacts: 1,630 temporary jobs Job Impacts: 35 permanent jobs

Economic Impacts: $460M in economic output

Economic Impacts: $3.4M annual economic output

Primary Economic Impacts


The Park’s secondary impacts, including spending by Park visitors and increases in nearby property values, will produce additional benefits.

Park Visitation Neighborhood Desirability

Stimulus: The Park will increase the desirability of living in nearby areas

Stimulus: The Park could attract 580,000 annual visitors

Economic Impacts: $5M in annual retail sales at nearby and Park establishments

Economic Impacts: $17M in increased property values for nearby properties

Fiscal Impacts: $200,000 in additional annual local sales taxes

Fiscal Impacts: $245,000 in additional annual property taxes

Secondary Economic Impacts


April 2013

A Gathering Place for Tulsa

A Gathering Place for Tulsa - INCOG Gathering Place for Tulsa. HR&A Advisors George Kaiser Family...

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