Lefleur Lakes Economic Impact Study

8/8/2019 Lefleur Lakes Economic Impact Study

1/28

LeFleur Lakes

Economic Impact Evaluation Summary Report

Prepared for

LeFleur Lakes

Development

Foundation

February 2010


2/28

LeFleur Lakes Economic Impact Evaluation

Table of Contents

1. Executive Summary

a. Purpose, Authority, and Scope

b. Methodology and Approach

c. Findings and Conclusions

d. Recommended Implementation Approach

2. Lakes-Related Flood Control Plans

a. Background of Lakes-Related Flood Control Plans

b. Evolution of the Lower Lake Plan

c. Congressional Authorization

3. Master Land Use Plan

a. Project Area Land Use Plan

b. Foundational Infrastructure

c. Recreational Assessment

d. Issues Impacting Development

4. Economic Impact Analysis

a. Market-Based Analysis

b. Benefit-Cost Analysis

5. Financing and Implementation Plan

a. Options for Public and Private Funding

b. Governmental and Institutional Considerations

c. Recommendations for Implementation

6. Public Relations Plan

Appendices (Under Separate Cover)

a. LeFleur Lakes Master Land Use Plan, February 2008,DPZ

b. LeFleur Lakes Market Analysis, March 2007, ERA

c. Lower Lake Plan Cost Benefit Analysis, September 2009, ERA

d. LeFleur Lakes Recreational Planning Report, August 2007, Department

of Landscape Architecture, Mississippi State University

e. Environmental Justice Issues Related to Proposed LeFleur Lakes

Development, December 2007, Department of Agriculture and Resource

Economics, Colorado State University

2


3/28


1.0 EXECUTIVE SUMMARY

Purpose, Authority and Scope

he LeFleur Lakes Development Foundation (Foundation) was created by the Rankin-

Hinds Pearl River Flood and Drainage Control District for the purpose of evaluating

economic development opportunities associated with flood control alternatives for the

Jackson Metropolitan Area. In August of 2006 the Foundation authorized Mississippi Engineering

Group (MSEG), Inc., to evaluate the economic impact of the Locally Preferred Plan under

consideration at that time to control flooding from the Pearl River. The evaluation is known as the

Economic Impact Study of the LeFleur Lakes Flood Control Plan (Economic Impact Evaluation).

The purpose of the evaluation was to determine the socio-economic impact of the locally

preferred flood control plan on the metro Jackson area and to determine whether the incremental

benefits of the plan would outweigh the additional cost. In addition to determining whether or not

area citizens could afford the project, factors such as land use planning, financing sources, legal

issues, and management and implementation issues were to be considered.

T

The LeFleur Lakes Flood Control Plan under consideration at the time was determined to be

unacceptable due to high cost and extensive environmental impacts. Consequently, in July 2007

the Rankin-Hinds Flood and Drainage Control District (Flood District) adopted a modified version

of the LeFleur Lakes Flood Control Plan, which included levees and a lower lake. The adopted

plan is known as the Lower Lake Plan and, in Corps of Engineers terms, is also known as the

Locally Preferred Plan. Once the Flood District adopted the Lower Lake Plan, it became the

focus of the Economic Impact Evaluation.

Methodology and Approach

The Economic Impact Evaluation included several separable components, completed by various

members of the MSEG team. Mississippi Engineering Group, Inc. analyzed data from these

multiple components, consolidating information and drawing conclusions based on findings

contained therein. These sources include reports commissioned by MSEG for purposes related

to the Lower Lake Plan, including a Benefit-Cost Analysis, Market Analysis, and Recreational

Planning Report. Additional data were derived from U.S. Army Corps of Engineers. Through

data consolidation and evaluation of pertinent information, a comprehensive scope of the

economic impact associated with the Lower Lake plan becomes readily apparent and relevant.

This current Summary Report provides a synopsis of the various separable work components and

combines the findings into a single summary document. The essential work on this evaluation

was completed with the presentation to the Foundation at its April 30, 2009 meeting.

3


4/28


Findings and Conclusions

The Lower Lake Plan consists of a significant impoundment, approximately 1,500 acres in

surface area and six and one half miles in length. The lake is strategically positioned near the

Central Business District of the City of Jackson, spanning a reach from Lakeland Drive to the

KCS Railroad River Bridge just south of I-20 near Richland, as illustrated in Figure 1. The plan

envisions creation of two islands with a developable area of approximately 215 acres.

Additionally, the lake produces approximately 13 miles of potential shoreline development

consisting of roughly 1000 acres. A Master Land Use Plan was developed to guide the building

architecture and zoning needs for the Lower Lake Plan. Both pedestrian and automotive

thoroughfares are identified in addition to parks, open space, and recreational opportunities.

Connectivity with traffic networks in Hinds and Rankin counties has been reinforced with ties to

both regional highways and principal local roads, such as Fortification Street, Lakeland Drive, and

Flowood Drive. Finally, a significant portion of LeFleurs Bluff State Park, including walking trails,can be preserved.

A comparison of debt

service payments to the

income generated via lease

payments indicates a net

positive revenue generated

by year six of the project.

The conceptual opinion of development cost for the

Lower Lake Plan is $605 million. The build-out of

such a large area is assumed to span a 30-year

period and would result in the development of

approximately 7,500 new residential units. A

comparison of debt service payments ($200 million

bond issue) to the income generated via lease

payments indicates a net positive revenue generated

by year six of the project.

To implement such a project, the existing boundaries of the Flood Control District would need to

be expanded. Several alternatives were evaluated that would result in the expansion of the

existing boundaries. One need for boundary extension is the simple fact that the project extends

beyond the existing boundaries of the Flood Control District, though the entire project is required

to be within the scope and jurisdiction of the Flood Control District. Other considerations include

flood protection and economic benefit which will be afforded to areas outside the existing

boundaries.

4


5/28


The Lower Lake Plan retains a complementing proposal to develop the potential of Town Creek

as a mixed-use amenity and regional attractions similar

to that found in other urban areas, such as San Antonios

Riverwalk. This waterfront pedestrian promenade would

feature a series of plazas, parks and gathering spaces

with shops and restaurants. Inserted as a mid-block

corridor, a promenade would extend from the Museum

and Convention Center Complex along East Pascagoula

Street southward and encourage the revitalization of an

under-utilized district in very close proximity to

downtown. This water feature also holds the potential

that citizens could enter a watercraft near the Convention

Center Complex and access six and one half miles of the Pearl River, the new islands, and miles

of newly developed shoreline. Of interest to note is that the Corps of Engineers own Levee Planof 1996 recognized the opportunity for such development and even included conceptual

renderings to illustrate the possibilities.1

Of interest to note is the fact

that the Corps of Engineersown Levee Plan of 1996

recognized the opportunity for

such development and even

included conceptual renderings

to illustrate the possibilities.

Recommended Implementation Approach

Since July 2007, the Rankin-Hinds Pearl River Flood and Drainage Control District has continued

to support the implementation of the Lower Lake Plan or some lake-based variation as the

preferred option for flood control in the Jackson Metropolitan Area. This option consists of the

Comprehensive Levee Plan, advocated by the Corps as the National Economic Development

plan, as well as a lower lake which includes a central island feature. This approach is desirable

as it appears to be an effective balance between the Corps desire to pursue cost efficient and

effective flood control accompanied by economic development opportunities.

A master land-use plan and cost-benefit analysis have been developed for the project. Based on

the projections provided through these documents, it appears that implementation of the Lower

Lake Plan or a similar lake-based approach is a feasible course of action. While details are

discussed later in this report, estimates indicate a positive benefit-cost ratio based on projected

economic impacts. Therefore, the Lower Lake Plan provides a feasible means of achieving the

dual objective of effective flood control and meaningful economic development.

1Flood Control, Pearl River Basin, Mississippi; Jackson Metropolitan Area, Mississippi; Feasibility

Report, Volume III, Appendix 8 Recreation Report, Draft, January 1996.

5


6/28


2.0 LAKES-RELATED FLOOD CONTROL PLANS

Background of Lakes-Related Flood Control Plans

In April 1979 the catastrophic Easter flood occurred in the

Pearl River basin, devastating the City of Jackson and

surrounding communities. Following that event, Congress

authorized the U.S. Army Corps of Engineers, Vicksburg District

(the Corps), to develop a comprehensive flood control plan for

the Jackson Metro area. Two such plans evaluated by the

Corps included the Shoccoe Dry Dam in the early 1980s and the

Comprehensive Levee Plan, submitted in January 1996.

Neither proposal garnered a great deal of enthusiasm from area

decision-makers.

The Corps is the federal agency authorized to implement flood

control solutions throughout the United States; however, the

Corps must have a non-federal unit of government to act as

local sponsor for implementing its programs. Although the

Corps evaluated the two aforementioned plans and determined

both were technically and economically sound (i.e., they

provided cost-effective flood control to Jackson), opposition

and/or lack of local support derailed both. While the Pearl River

Basin Development District agreed at the time to serve as the

local, non-federal sponsoring entity for the Levee Plan, the

Development District was unable to secure public support and

local funding for the project. Figure 1. Lower Lake Plan

The original Two Lakes flood control concept was developed around 1996 by John McGowan as

an alternative to plans previously evaluated by the Corps but discarded for various reasons2.

The McGowan Two Lakes Plan gained widespread support from virtually every unit of county and

municipal government within the Jackson Metro area. Hence, in 2003 the Flood Control District

2 Various presentations of the original Two Lakes Plan are summarized in documents such as Richard

Weatherly (Weatherly Engineering Services, LLC), LeFleurs Lakes Design, December 7, 2004; Flood

Control and Development Plan for the Jackson Metropolitan Area, Revised November 15, 1999;

Downstream Impact and Reservoir Regulation, Flood Control and Development Plan for Jackson

Metropolitan Area, December 15, 1999.

6


7/28


agreed to serve as the local sponsor for evaluation of the Two Lakes Plan, which was

subsequently re-named the LeFleur Lakes Plan (Figure 1).

As the local sponsor for the existing levee system (an existing federal flood control project), the

Flood Control District contacted the Corps in 2002 to determine the basic requirements for

implementing the LeFleur Lakes Plan. The Flood Control District agreed, in consultation with the

Boards of Supervisors of Rankin and Hinds Counties, to participate as the non-Federal partner

with the Corps in development of a Feasibility Study/Environmental Impact Statement (FS/EIS).

This effort was to evaluate the LeFleur Lakes Plan as an alternative to the enhanced and

expanded Levee Plan previously recommended by the Corps in 1996. The Corps and the Flood

Control District executed a Feasibility Cost-Share Agreement in October 2003 to conduct the

referenced FS/EIS. The budget for this work, established by the Corps, was $2.85 million and

was to be cost-shared 50-50 between the Corps and the Flood Control District. The Boards of

Supervisors of Hinds and Rankin Counties agreed to provide the 50% local cost-share.

Environmental and engineering evaluations were initiated in February 2004 in accordance with a

30-month schedule with an anticipated completion date of September 2006.

In February 2007 the Corps issued the Pearl River Watershed, Mississippi, Feasibility Study Main

Report, and Preliminary Draft. The Report identified the Levee Plan as the NED (National

Economic Development) Plan at a total cost of $205,800,0003

and estimated a total cost of the

LeFleur Lakes Plan of $1,429,000,000.

The basic findings of the report are as follows:

The LeFleur Lakes concept is technically feasible, with modifications to include pumps

and levees; that is, it would provide effective flood protection;

The LeFleur Lakes concept is economically infeasible according to Federal flood control

law in effect at that time, meaning that the cost of the plan would be greater than the

economic value of the benefit it would provide; and

The environmental impact of the LeFleur Lakes concept is significantly greater than the

Corps Levee Plan and would incur a substantially greater risk of environmental litigation

that potentially could delay the project for decades.

3 NED plan denotes National Economic Development Plan and is the plan that the Corps, according to

established guidelines, determines is in the greatest national interest economically; i.e., it maximizes

benefit-to-cost. The NED plan establishes the baseline level at which Congress will participate in funding a

flood control project.

7


8/28


Of the environmental and other concerns noted by the Corps report, the most significant is the

amount of additional dredging required for the lakes to provide flood control to Jackson, Richland,

and the Savanna Street Wastewater Treatment Facility. In its analysis, the Corps determined

that it would be necessary to dredge the Pearl River 15 feet deep and 1,500 feet wide for 13

miles, from Interstate 20 to Byram, Mississippi. Other requirements to assure the effectiveness of

the plan include altering the operation of the Ross Barnett Reservoir dam gate and the loss of

most preservation and recreational areas within LeFleurs Bluff State Park. Operation of the dam

is a subject of especially significant controversy due to

concerns that gate manipulation could increase flooding risk

in communities in South Mississippi and may negatively

affect the seafood industry due to the change in freshwater

flows to the Mississippi Sound.

In its analysis, the Corps

determined that it would be

necessary to dredge the

Pearl River 15 feet deep and

1,500 feet wide for 13 miles,

from Interstate 20 to Byram,

Mississippi.

While it is not untypical for projects of significant magnitude

to have either a serious benefit-to-cost deficit or adverse

environmental impact, the LeFleur Lakes Plan is severely

constrained by these critical feasibility factors.

Evolution of the Lower Lake Plan

In February 2007, as the Corps was concluding preparation of its draft report on the findings of

the FS/EIS, the LeFleur Lakes Development Foundation initiated an economic development

analysis to evaluate options for implementation of the selected flood control plan, whatever plan

that might be. The initial activity authorized as part of the economic development plan was a

week-long, public planning charrette, held at the Mississippi Telecommunications Center in

downtown Jackson. The charrette attracted several hundred participants over its eight-day

duration, including local elected officials and interested citizens as well as representatives of the

Two Lakes for Mississippi Foundation.

Taking into account the Corps estimated cost of the LeFleur Lakes Plan and the support

achieved through the charrette process for a scaled-down version of the lakes concept, the Flood

Control District evaluated several options for reducing the scope of the plan. At the request of the

Flood Control District, the Corps agreed to evaluate the hydraulic function of a single lake plan

and concluded that such a plan, when combined with levees, would provide flood protection in

excess of that provided by the levees. Subsequent to these findings, the Flood Control District

developed the option known as the Lower Lake Plan. As envisioned, the Lower Lake Plan would

encompass the NED Plan in conjunction with a single lake, the lower lake, constructed to

optimize hydraulic and flood reduction benefits, while providing opportunities for minimizing cost

8


9/28


and environmental impacts from the overall project. Additionally, the Lower Lake Plan included

ample economic development opportunities. Thus, it was viewed as an alternative that could

fulfill the Flood Control Districts desire for effective flood control, the Corps of Engineers concern

with economic efficiency and limited environmental impact, and those with economic

development interests as well. In July 2007, the Flood Control District adopted the Lower Lake

Plan as the Locally Preferred Plan for flood control.

Congressional Authorization

In November 2007, the Water Resources Development Act (WRDA) of 2007 (Public Law 110-

114, Section 3104, see next page), became law, passing both the House and the Senate over a

presidential veto. The most significant impact to the Rankin-Hinds Metro Area is that WRDA

2007 contains Congressional authorization for a comprehensive flood control project for the first

time since Shoccoe Dam was authorized in 1986. WRDA 2007 contains specific provisions

related to Pearl River flood control and the LeFleur Lakes Plan, not the least of which is that it

authorizes federal cost participation in the amount of $133,770,000, if the project can be shown to

be technically feasible and environmentally acceptable.

9


10/28


10


11/28


3.0 MASTER LAND USE PLANE PLAN

Project Area Land Use PlanProject Area Land Use Plan

A Master Land Use Plan for the LeFleur Lakes project was developed by Duany Plater-Zyberk &

Company of Miami, Florida (DPZ), following a series of public charrettes, which identified issues

and needs of the project. Four

distinct plans addressing the

principal concerns were

generated and presented at the

final charrette meeting on March

12, 2007. From these four

plans and subsequent

discussions following the

charrette, the Lower Lake plan

was created and presented in

the Master Plan Document

dated February 2008. The

Lower Lake plan is comprised of

a single lake within the existing

levee system. The lake will be

framed by development on both

sides and contain two islands

accessible by existing Jackson

and Rankin county roads. This

plan also includes a proposal for

the development of a waterfront

pedestrian promenade on Town

Creek, similar to that of San

Antonios Riverwalk.

A Master Land Use Plan for the LeFleur Lakes project was developed by Duany Plater-Zyberk &

Company of Miami, Florida (DPZ), following a series of public charrettes, which identified issues

and needs of the project. Four

distinct plans addressing the

principal concerns were

generated and presented at the

final charrette meeting on March

12, 2007. From these four

plans and subsequent

discussions following the

charrette, the Lower Lake plan

was created and presented in

the Master Plan Document

dated February 2008. The

Lower Lake plan is comprised of

a single lake within the existing

levee system. The lake will be

framed by development on both

sides and contain two islands

accessible by existing Jackson

and Rankin county roads. This

plan also includes a proposal for

the development of a waterfront

pedestrian promenade on Town

Creek, similar to that of San

Antonios Riverwalk.

Figure 2. Lower Lake Master Land Use Plan prepared by DPZ in

2007 and adapted by MSEG in 2009.

The development along the

shoreline and islands is

proposed to be mixed-use

neighborhoods consisting of

single-family and multi-family

The development along the

shoreline and islands is

proposed to be mixed-use

neighborhoods consisting of

single-family and multi-family

11


12/28


housing, retail, and commercial properties, as well as parks

and civic spaces, a marina facing downtown Jackson, and a

series of parks along the levees. These neighborhoods are

designed to enhance a multi-use experience where

commercial, park, and civic destinations are within walking

distance of the residences. Some neighborhoods will retain a

high-density, urban feel, while others will retain a more

spacious, residential feel. This is achieved by the use of a

common zoning system using a Transect. A Transect is a

system of classification deploying the conceptual range rural-

to-urban to arrange in useful order the typical elements of

urbanism.4 The Transect is divided into zoning categories:

Rural, Sub-Urban, General Urban, Urban Center and Urban

Core. The Transect Technique is derived from ecologicalanalysis where it is applied to present the sequence of natural

habitat from shore-dune-upland or wetland-woodland-prairie.

A code was developed to guide the architecture of the Lower

Lake Plan to assure that all new building structures would be

harmonious with each other and within the language of the

traditional architecture of Mississippi, while maintaining a

vision of a mixed-use neighborhood with equal opportunities

for pedestrian traffic, parks, and civic spaces.

The code was also created to address specific stakeholder

issues such as:

The neighborhood is limited in size by a five-minute

walking distance from edge to center;

Residences, shops, workplaces, and civic buildings

are included in close proximity;

A variety of streets and sidewalks serve the needs of

both the pedestrian and the automobile;

Public open spaces in the form of squares, parks and

playgrounds provide places for informal social activity

and recreation; and

Figure 3. Lower Lake Code, DPZ, 2007.

The Regulating Plan: Consists of a

map precisely showing the zoning

categories as well as the location of

public open spaces. Thoroughfares

are also indicated on this map.

Lower Lake Code includes: Rural

Reserve (T1), Recreational/Civic

(T2), Sub-Urban (T3), General

Urban (T4) and Urban Center (T5).

The Urban Standards Document:

Regulates the aspect of private

buildings which will affect the public

realm. This standard will define the

streetscape and building use by

zoning category with an emphasis on

mixed-use when possible.

The Thoroughfare Standards

Document:

A matrix of drawings, specifications,

and dimensions that assembles

vehicular and pedestrian ways into

sets, specialized in both capacity and

character.

The Architectural Standards

Document:

Specifically defines the type ofmaterial and configurations of walls,

roofs, openings, and facades in

order to maintain visual

compatibility among the buildings of

the neighborhoods and to retain the

building traditions of the region.

4 Final Presentation, LeFleur Lakes Charrette, DPZ, March 2007.

12


13/28


Building frontages are designed and aligned in a manner that is visually appealing.

The Lower Lake Code consists of four documents, integrating to achieve the desired effect, and

are described in Figure 3.

Foundational Infrastructure

The Lower Lake Plan consists of a combination of the Corps NED/levee plan in conjunction with

a proposed lower lake, providing necessary flood protection while also allowing for substantial

economic development opportunities. The realization of the desired commercial and residential

uses planned to accompany the implementation of the Lower Lake Plan is dependent not only on

the development of the appropriate flood control measures, but also the development of the

necessary backbone infrastructure to include water, wastewater and transportation. The

conceptual opinion of cost of implementing these basic public infrastructure components is

approximately $100 million.

Recreational Assessment

The Mississippi State University Department of Landscape Architecture prepared a recreation

planning report in order to provide an assessment of existing recreational facilities that will be

impacted by the project, as well as provide recommendations for recreation opportunities that

may be provided. This report also includes an assessment of the application of the Mississippi

Statewide Comprehensive Outdoor Recreation Plan (SCORP) to the recreational planning

component of the project.

The report identifies five recreational facilities in the vicinity of the project that potentially could be

impacted by construction of the proposed lake. Two properties identified, The Mississippi

Museum of Natural Science and the LeFleurs Bluff State Park Campgrounds and Nature trails,

currently include land that may be impacted by the project. Identified facilities that could be

impacted are described as follows:

The Report made many recommendations and guidelines for recreation planning, a few of the

notable recommendations are:

13


14/28


Provide recreation destinations for

residents of the Jackson metropolitan

area as well as for tourists and

travelers;

Provide non-vehicular accessbetween proposed recreation areas

and the city infrastructure to facilitate

and encourage active pedestrian

circulation while maintaining

connectivity to the surrounding urban

environment dont let interstates

and highways stand as boundaries

between the lake and the city;

Create recreation spaces thataccommodate all age ranges;

Remain environmentally sensitive to

natural areas around the proposed

lakes boundaries; while part of the

lakes purpose is obviously economic

stimulation through new

development, the entire lake edge should not be developed; rather, green corridors

should remain to facilitate movement of wildlife and offer opportunities for the enjoyment

of natural areas;

Provide educational opportunities within recreational areas in regard to the local ecology

of the Pearl River Basin on which the lake will be located; this complements the existing

education opportunities offered by the Mississippi Museum of Natural Science and helps

maintain a thematic element throughout the recreation facilities of the Lower Lake

Project;

Seek to distinguish recreational opportunities at Ross Barnett Reservoir by highlighting

the more urban character of the Lower Lake the project could increase the citys public

open space and offer additional opportunities for public gatherings, concerts, and other

events.

These recommendations encourage a high amount of public involvement in the process in order

to identify the demands and needs of the community. Factors such as identifying access points

to recreation areas, identifying potential locations for recreational areas and greenways, as well

as examining routes linking the recreational areas are discussed.

14


15/28


Issues Impacting Development

Also included in the recreation planning report is a report detailing environmental justice issues

associated with the project. The report (prepared by Jeffery A. Ballweber of Colorado State

University) details past efforts and federal regulations and is designed to avoid negative

environmental and public health impacts on minority and low-income populations. The report

recommends that the Foundation:

1. Take an active role in ensuring that the U.S. Army Corps of Engineers fully satisfies both

the CEQ Guidelines on Environmental Justice and its own Environmental Justice policies

and procedures; and

2. Take a leadership role, wherever practical, in the projects planning process to follow

recommendations for nonfederal Environmental Justice compliance.

Further recommendations to achieve these goals are outlined in the report.

Figure 4. Museum of Natural Science Nature Trail

15


16/28


4.0 ECONOMIC IMPACT ANALYSIS

Market-Based Analysis

A market analysis was prepared for the Lower Lake project by Economics Research Associates

(ERA) located in Washington, DC. The report was prepared as an analysis of demographic and

economic conditions of the project area and to develop projections of the likely demand for

various land uses that would be stimulated by the project. The specific land uses targeted in this

report were single-family and multi-family residential, commercial office, retail, and hotels. The

projections in the report are based on a 30-year horizon and focus on a corridor surrounding the

project area consisting primarily of Hinds and Rankin counties, with some analysis of Madison

County.

In estimating demand potential, the study area consists of approximately a one-mile radius on

either side of the proposed lake, an area encompassing parts of downtown Jackson as well as

existing development along Interstate 55, Highway 80, and other major developed areas within

the one-mile proximity.

The report outlines key demographic and economic trends such as population, gender, age,

income, households and household size, rental vs. ownership rates, migration into and out of the

study area, permit activity, employment trends, industry concentration, tourism and recreation,

hotel market conditions, and real estate/office/retail/hotel demand estimates in the area. Usingthese data, ERA concluded the following:

Annual demand for housing in the study area is expected to total 150-200 single-family for

sale units per year, 75-100 multi-family for sale units per year, and 150-200 multi-family rental

units per year;

Supportable office demand in the area is expected to total 60,000 to 90,000 square feet (net)

per year;

A demand for retail space is expected to total 800,000 to 850,000 square feet over a 20-year

period; it is noted that this demand could increase if special opportunities emerge to create aregional retail or entertainment destination; and

Projected hotel demands in the area suggest that three to five hotels may be placed in the

project area.

16


17/28


Single-Family Demand

The report defined the target market for single-family residential real estate demand to be those

households with earnings in an affordability range beginning at approximately $200,000 per unit.

Within this targeted segment, four primary sources of demands for single-family residential

development were identified:

1. Households living in the region, including renters;

2. Buyers seeking a mixed-used living environment/town center and/or lake-front

property;

3. Retirees and empty-nesters as well as potential second-home buyers; and

4. Starter couples and families.

Based on the analysis of single-family demand for housing in the area, it is estimated that the

LeFleur Lake project could capture 15% of the total annual demand within the market.

Multi-Family Demand

For-Sale Demand

Analyzing Hinds, Rankin, and Madison counties demand for for-sale multifamily housing, it is

projected that between 250 and 300 eligible households annually would be in this market area. A

conservative estimated is that the project could capture approximately 25% of the demand. This

figure represents an annual absorption of 75-100 multifamily units per year, or approximately 6 to8 units per month.

For-Rent Demand

The Market Analysis also predicated demand for rental units on the availability of a high-quality

product with significant amenities. The target market for rental units would include potential

residents earning more than $35,000 per year, comprised primarily of young working

professionals or older childless households. The majority of these renters would be those

primarily already living in the area and seeking lake-front or a mixed-use/ town-center living

environment. Considering the available market segment in the area, it is estimated that the

LeFleur Lake project could capture 25% of area demand for high-quality rental housing,

generating a demand of 150 to 200 new rental units per year.

Commercial Demand

17


18/28


Office Market

The analysis found employment growth in the region to be relatively strong for office space

demand, particularly for the service industry while total employment in the area is expected to

grow by 140,000 jobs through 2030. Currently, 30% of the regions employment is contained

along the floodplain corridor and could grow to reach 40%. It is estimated the LeFleur Lakes

study area could capture 50 to 70 percent of future employment growth in the corridor which

would create a demand range for office space of 83,000 to 116,000 square feet of new office

space annually.

Retail Demand

In determining demand for retail space, Hinds and

Rankin County spending patterns were analyzed

and retail sales were categorized by segments.

Capture rates were determined per retail category

and then compared to productivity estimates for

each of these categories developed by the Urban

Land Institute shopping center surveys. Based on

this analysis, retail demand for the LeFleur Lakes

study area can range from 800,000 to 850,000

square feet. This retail square footage includes grocery and convenience stores, eating and

drinking establishments, apparel, services, and entertainment venues.

ERA found employment growth

in the region to be relatively

strong for office space

demand, particularly for theservice industry while total

employment in the area is

expected to grow by 140,000

jobs through 2030.

Hotel Demand

Hotel demand in the Jackson metro area is driven less by tourist markets than by employment

related business, a market expected to increase due to potential convention business. A demand

was identified of 109 new hotel rooms per year through 2030 in the Jackson metro area with an

estimated capture rate for the LeFleur Lakes area of roughly 10-20 percent of hotel demand. The

Jackson metro hotel market has increased by 3.84 percent per year since 2000, and assuming

this continued trend, the analysis estimates the LeFleur Lakes area has the potential to capture

three to five new hotels.

18


19/28


Further information, including graphical representations of findings and supporting data, can be

found in the LeFleur Lakes Market Analysis prepared by Economics Research Associates

(Appendix B).

Benefit-Cost Analysis

A cost-benefit analysis of the Lower Lake Plan was developed in April 2009. This Evaluation was

conducted to determine the total fiscal benefits derived both annually as well as over the plans

projected 30-year build-out. In conducting its analysis, several key factors were focused on

including:

Physical, social, and economic framework of the project

Market and development opportunities

How project planning drives economic development

Projects ability to attract private capital

Public return on investment.

The analysis determined that over the next 30 years, the project has the potential to be a

transformative economic force within the affected region, shifting current land use to a vibrant

mixed-use community with high-value retail services and public amenities. To arrive at this

finding, A conceptual program was developed for the project that could be anticipated by demand

within the regional market. The investments included in this conceptual program are identified in

Figure 6. Additionally, the Lower Lake plan proposes an investment of $605 million in

infrastructure necessary to support this or a similar development program and is illustrated in

Figure 7.

7,572 Single Family and Multifamily Housing Units

100,000 Square Feet of Retail Space

180,000 Square Feet of Office Space

Two Hotels Offering 230 Rooms

Figure 5. Conceptual Investments Supported by Project

19


20/28


Figure 6. Infrastructure Cost

PROJECT CostEstimateLeveeStabilization/Expansion $205million

LakeConstruction $250million

PropertyAcquisition $50million

Utilities,Roads,Water,Wastewater $100million

Total $605million

Return on Private Investment

Based on these opinions of probable cost and revenue projections, the Benefit-Cost Analysis

determined the Lower Lake project could generate $10.2 million per year, arriving at a net present

value of the leasehold revenue value (over the projected 30-year build-out) of nearly $220 million.

Considering this determination, it is estimated that a positive revenue return on private investment

could be achieved by year six of project implementation.

Annual Benefits to Local Governments

In addition to the private investment, the project would result in a significant ongoing funding

stream for local and state governments through sales and property taxes. The analysis estimates

an annual assessed construction value of approximately $168.3 million, generating $17.2 million

each year. Additionally, the analysis determined annual revenues generated by hotels,

restaurants, and retail of $38.1

million, which may provide an

additional $3 million annually in

sales taxes for the Cities of

Jackson and Flowood and to the

State of Mississippi. These

estimated revenue streams are

shown in Figure 8.

AnnualPropertyTaxesHindsCounty $9.6million

RankinCounty $7.6million

SubTotal $17.2million

AnnualSalesTaxes

CityofJackson

City

of

Flowood

$343,000

$344,000

StateofMississippi $2.3million

SubTotal $2,987,000

TOTALANNUALBENEFITS $20,187,000

Figure 7. Projected Tax Benefits

20


21/28


Employment Benefits

Finally, the ERA Benefit-Cost Analysis provides multiple estimates for employment benefits and

payrolls that will be generated through construction jobs created by the project as well as

permanent employment estimates resulting from projected developments within the project area.

During the course of the projects build-out, 862 full-time annual construction jobs are projected

representing an annual payroll of approximately $443.5 million. Additionally, permanent jobs

created by new office, retail, and hotel activity is estimated to be approximately 700, with an

annual payroll of $31.5 million. Permanent employment estimates and annual payrolls projected

for both Rankin and Hinds Counties are detailed in Figure 9.

SEGMENTHINDS RANKIN

Retail

90

90

Hotel 91 91

Office(Administrative/Management) 233 100

ProjectedPayroll $20million $11.5millionFigure 8. Employment Estimates and Payroll Projections

Additional information regarding the benefit-cost estimates for the project can be found in the

Lower Lake Plan Cost-Benefit Analysis(Appendix C).

21


22/28


5.0 FINANCING AND IMPLEMENTATION PLAN

Options for Public and Private Funding

Key considerations when assessing the options for public and private funding are:

The island must be publicly held / held by board

Lake periphery property could be publicly or privately held / controlled

The DPZ overlay plan must be adopted in order to direct the scale and form of

development.

The projects initial capital investment will require local, state, and federal funds

to attract/leverage private investment.

The Lower Lake project team developed a Sources and Uses summary which illustrates the

likely costs of the project as well as the potential sources of funding for the costs. An estimated

$605 million in upfront costs for levee stabilization, lake construction, property acquisition, and

core infrastructure (utilities) is expected. The majority of these costs are expected to fall on the

public sector. Potential sources of funding identified by the Lower Lake project team is as

follows:

Development impact fees, special assessment district, and public improvement

district. (utilities/infrastructure)

U.S. Army Corps of Engineers and local sponsor funds (levee expansion).

State of Mississippi Major Economic Impact Fund/payment-in-lieu of taxes,

special assessment district, and public improvement district. (lake development)

Directed Congressional appropriations for infrastructure construction.

New fiscal mechanisms to pool intergovernmental funds from an array of federal,

state, and local sources.

Directed regional ad valorem assessments for project development.

Potential leasehold rental income from island and lake periphery.

22


23/28


The Sources and Uses of funding are identified in Figure 10 below.

Figure 9. Sources and Uses of Funding

ERA also noted that approximately $17.2 million in real property tax revenues and $960,000 in

local sales and lodgings tax revenues are expected to be generated by the projects new

construction. A portion of these tax revenues could be tapped to support local infrastructure

costs.

After construction and implementation of the project, revenue will begin to flow. However, as with

any venture where new businesses and dwellings become available, it will require some time for

occupancy to occur. Consequently during the early stages of the project the net revenue will be

negative because debt requirement payments will be greater than income revenue. However, is

year six of the project, income from revenue begins to exceed debt payments and from this point

on our projections are for positive income (Figure 11).

23


24/28


Figure 10. Net Positive Revenue

Governmental and Institutional Organization

The Lower Lake Plan Cost Benefit Analysis report (Appendix C) offered several

recommendations that offer alternatives for developing the most appropriate governmental and

institutional organization to ensure effective plan implementation through project build-out.

Specifically, the report recommends the core of the project organization reside with the Flood

Control District for management and implementation authority while the LeFleur LakesDevelopment Foundation would act as a planning and advisory resource. Under this scenario,

the Foundation would establish an advisory committee to establish and offer recommendations

regarding project management and implementation, operation, and finance. The Foundation

would serve as a voice to influential and governmental officials while helping the Flood Control

District to avoid political and other influences which might hamper project implementation and

development. Traditional municipal and county services should be provided based on existing

24


25/28


political boundaries, or, as otherwise provided via legislative or inter-local agreement. In order to

enable equitable distribution of financial benefits and costs, consideration should be given to the

creation of a Financial Overlay District to allow incremental sharing amongst the governmental

entities associated with the project. A number of legislatively enacted governance models are

available for consideration if the creation of such a district is pursued.

Recommendations for Implementation

Land acquisition is a priority, and the managingorganization must have control of property, especially thatwhich could impede development; if acquisition is not

feasible, every attempt should be made to consolidatelandowners

Public involvement in the planning and development processis vital to help explain projects and mitigate concerns

The managing organization must closely monitor demandfor project uses and be flexible to alter project plans ifstrong demand is not apparent; close attention must be paidto the market

The development must create an identity and be unified;projects should complement one another

The analysis offers a number of recommendations key to implementation, focusing on the

predicate that strong community support will be critical to instituting successful development.

These important keys include the points identified in Figure 12.

Figure 11. Key implementation considerations

25


26/28


To establish a structure to properly finance the project, ownership and/or control of certain

properties is fundamental. Specifically, it is recommended that the Flood Control District own or

control the island properties and suggests that the non-island waterfront property surrounding the

lake could be either publicly or privately controlled, subject to the requirements imposed by the

US Army Corps of Engineers in reference to the integrity of the flood control operations. With

these requirements in place, recommendations are made for financial resources for funding the

projects components as identified in Figure 13, noting the potential for State and Federal

financing assistance.

General obligation bonds Congressional appropriations for major improvements Fiscal mechanisms to pool state and federal funds Creation of public improvement districts to fund improvements and

maintenance

Regional fiscal assessments for infrastructure, improvements, andacquisition

Figure 12. Potential funding sources

6.0 PUBLIC RELATIONS PLAN

A public involvement plan was developed by AJA Management & Technical Services, Inc. (AJA)

which outlines the steps to unveil and promote the Lower Lake Project to the public to broadly

share as much information as possible. This is intended to increase public awareness and

confidence in the Lower Lake concept. Emphasis should be placed on the primary purpose of the

undertaking, which is flood control and flood damage reduction, which in turn creates the

opportunity for economic development and quality of life enhancements in the area.

The plan calls for public meetings in each municipality situated within the project area (The cities

of Jackson, Flowood, Pearl, and Richland). These meetings would be supplemented by public

awareness campaigns to include extensive educational and informational materials for

stakeholders, web pages for convenient access to planned events and accumulated materials

about project plans, and a cumulative history of past public and committee meetings with brief

summaries if deemed necessary. The campaign would also be designed to educate and keep

26


27/28


the public aware of the projects progress as well as the positive and negative impacts it may

have on employment opportunities, quality of life enhancements, and the local tax base.

7.0 SUMMARY, FINDINGS, AND CONCLUSIONS

Set forth previously herein, the comprehensive assessment of the impact for development of a

lake feature contained as a part of a cost-effective flood control plan can produce significant

economic impact and quality of life enhancement for the Jackson Metropolitan Area, while

effectively serving its basic flood control mission. The analysis of the Lower Lake Plan reveals

significant impact opportunities to transform the Jackson Metropolitan Area into a true destination

community augmenting the ongoing efforts for economic development and quality of life

improvement in the municipal and county venues impacted thereby. Further, the concepts

developed by DPZ and evaluated by ERA reveal the significant complimentary relationship of the

Lower Lake concept with development on Town Creek in Hinds County as well as other

tributaries which flow into the Pearl River within the project reach. As noted throughout this

evaluation, the independent reviews and input of world-recognized centers of expertise in the

areas of New Urbanism, Environmental Justice and objective analyses of economic and

environmental feasibility, codified hereinabove constitute a strong case for a feasible and

implementable project undertaking pursuant to which resources from multiple areas of public and

private kind can be attracted and incorporated in a manner which will likely result in a win-win for

all involved participating entities.

While generally discussed in the various volumes of this evaluation, it should be noted that

utilization of existing resources including municipal utilities, zoning and public safety appears

logical; however, legislative issues/needs have been identified involving the current authority of

the Flood Control District, including creation of a companion entity with a legal capability to more

clearly provide economic development related investments in conjunction with flood control.

The firm and unyielding consensus of opinion within the MSEG Team, including its critical

partners Duany Plater-Zyberk & Company (DPZ) and Economic Research Associates (AECOM),

27


28/28


provides the foundation for further evaluation and determination of this potentially transformative

undertaking.

While focusing significantly on the importance of public and private cooperation and investment,

the thorough vetting of the institutional issues associated with creation of an implementation

authority capable of such an undertaking, it was determined that the Pearl River Valley Water

Supply District model might, in fact, have applicability subject to clear and defined lines of

responsibility with existing municipal and county roles and responsibilities particularly in the areas

of enterprise utilities, public safety and related traditional public services.

Lefleur Lakes Economic Impact Study

Documents

Transcript of Lefleur Lakes Economic Impact Study