2013-01-13 Breaking New Ground Hains Point Redevelopment Economic Impact Study - M.steenhoek Rev1

7/30/2019 2013-01-13 Breaking New Ground Hains Point Redevelopment Economic Impact Study - M.steenhoek Rev1

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Breaking New GroundMeasuring the Economic Impact of the Redevelopment of Hains Point

Matthew Steenhoek

December 9th

, 2012

UAP-5974: Methods Independent Study:

Market, Economic Impact, & Fiscal Impact Methods

Dr. Terry Holzheimer

Rev.1


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Breaking New Groundis purely an academic study that does not represent an actual proposal for

redevelopment, it has not been reviewed, endorsed, or otherwise approved by any local or federal agency nor

should it be viewed in a context outside of an academic study. Among many other things, the redevelopment of

Hains Point would require a transfer of ownership from the Federal Government to the District of Columbia,

similar to the transfer completed for Poplar Point and a number of other sites through Public Law 109-396, the

Federal and District of Columbia Government Real Property Act of 2006. The Researcher knows of no actual

proposals for a transfer of this nature, nor any conversations by appropriate parties related to such a transfer.

The cost estimate data used is based roughly on existing pricing and trends in the Washington DC regional

market as well as other national benchmarks, and the tax impact analysis has not been reviewed or assisted by a

tax professional, nor has it been reviewed by any local agency with taxing authority. The tax and economic

impact metrics and approach used were referenced from several recent major redevelopment projects in the

District, including the Southwest Waterfront, O Street Market, and Saint Elizabeths East Campus, but include

the Researchers projections and assumptions.

- Matthew SteenhoekMasters Candidate - Urban and Regional Planning

Virginia Polytechnic Institute

December 9th

, 2012


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Table of ContentsTable of Contents ........................................................................................................................................................... i

Table of Figures ............................................................................................................................................................. ii

MARKET & ECONOMIC IMPACT STUDY ......................................................................................................................... 1A. Market Study & Development Program Analysis ............................................................................................. 1

I. Program Description .................................................................................................................................... 4

II. Public Infrastructure Program and Costs ..................................................................................................... 6

III. Private Development Program and Costs ............................................................................................... 9

B. Economic Impact Summary of Hains Point ..................................................................................................... 18

I. Total Direct Annual Tax Revenue ............................................................................................................... 18

II. Employment ............................................................................................................................................... 20

III. Public Infrastructure Funding and Management ................................................................................... 21IV. Conclusion.............................................................................................................................................. 25

Hains Point Breaking New Groundby the numbers: .......................................................................................... 26

Works Cited ................................................................................................................................................................. 27

Appendix ...................................................................................................................................................................... 30

Appendix A: Development Site Analysis.................................................................................................................. 31

Appendix B: Project Cost Estimate .......................................................................................................................... 32

Appendix C: Residential Program Summary ............................................................................................................ 33

Appendix D: Economic Impact Summary ................................................................................................................ 34Appendix E: Annual Direct DC Tax Revenue by Use ................................................................................................ 35

Appendix F: Retail Annual Direct DC Tax Revenue ............................................................................................... 36

Appendix G: Office Annual Direct DC Tax Revenue .............................................................................................. 37

Appendix H: Hotel - Annual Direct DC Tax Revenue ............................................................................................... 38

Appendix I: Condominium (Market Rate) Annual Direct DC Tax Revenue ........................................................... 39

Appendix J: Condominium (Affordable) Annual Direct DC Tax Revenue ............................................................. 40

Appendix K: Apartment (Market Rate) Annual Direct DC Tax Revenue ............................................................... 41

Appendix L: Apartment (Affordable) Annual Direct DC Tax Revenue .................................................................. 42

Appendix M: Parking Annual Direct DC Tax Revenue .......................................................................................... 43

Appendix N: Business Improvement Fee Generation ............................................................................................. 44

Appendix O: 30 Year Debt Service and Tax Revenue Calculation ........................................................................... 45

Appendix P: Investment and Tax Revenue Timeline 2040-2050 ............................................................................. 46


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Table of Figures

Figure 1: Hains Point / East Potomac Park (Source: Google Maps) ............................................................................... 1

Figure 2 : District 2040 Development Supply and Demand Projections ........................................................................ 3

Figure 3: Primary Redevelopment Site Boundaries (Source: Google Maps) N.T.S. ....................................................... 4

Figure 4: Approximate equivalent area of Primary Redevelopment Site (Source: Google Maps) N.T.S. ...................... 5Figure 5: Proposed Redevelopment Program (8.0 FAR) ................................................................................................ 9

Figure 6: Residential Redevelopment Type and Affordability Summary ..................................................................... 10

Figure 7: Residential Unit Size and Type Distribution Summary ................................................................................. 10

Figure 8: Office Supply and Demand Projections ........................................................................................................ 12

Figure 9: Projected Hotel Mix and Distribution ........................................................................................................... 14

Figure 10: Residential Parking Ratio Assumptions ...................................................................................................... 17

Figure 11: Annual Direct Tax Summary ....................................................................................................................... 18

Figure 12: Cumulative District Tax Revenue 2040-2070 ($2012) ................................................................................ 19

Figure 13: Construction Employment Calculation ....................................................................................................... 20

Figure 14: Public Infrastructure Bond Debt Service Calculation .................................................................................. 21

Figure 15: TIF Annual Debt Service 2040-2070, with 10-year Build Out ..................................................................... 22

Figure 16: Cumulative Debt Service and Real Estate Tax Revenue 2040-2070 ........................................................... 22

Figure 17: Existing Business Improvement District Comparison ................................................................................. 24


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MARKET & ECONOMIC IMPACT STUDY

A. Market Study & Development Program AnalysisHains Point, officially known as East Potomac Park, is a 395 acre park in southwest Washington, DC. It is located

between the Potomac River and the Washington Channel and is under the jurisdiction of the National Park Service,

see Figure 1 below.

Figure 1: Hains Point / East Potomac Park (Source: Google Maps)


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Hains Point is currently home to a number of National Capital Park Service and U.S. Park Police buildings, extensive

surface parking lots, a golf course and driving range, an Olympic sized swimming pool, picnicking and fishing areas,

and other vehicular and pedestrian infrastructure. It is located to the south of the Tidal Basin and Jefferson

Memorial, west of the Washington Channel and the Southwest Waterfront neighborhood, and east of the Potomac

River and National Airport. The northern edge of Hains Point is defined by the highway infrastructure of the Case

Bridge and 14th

Street Bridge. Virginia Rail Express (VRE) and WMATAs Yellow line tracks emerge from their

below-grade tunnels in its northwest corner and continue across the Potomac to Virginia.

The Economic Impact portion of this report focus on the potential tax generation and job growth that would result

from the concept development program to be further described below. This development program responds to

the supply needs identified in the Researchers study District 2040: Building Towards a Sustainable DCand can

serve as a baseline for future discussion and further evaluation.

District 2040 provided an analysis of growth targets identified through the Sustainable DC initiative and the

Mayors Five-Year Economic Development strategy. The Sustainable DC initiative set a goal of adding 250,000 new

residents to the District of Columbia over the next twenty years, and the Mayors Five-Year Economic

Development strategy identified an ambitious plan to create 100,000 new jobs over the next five years. These

aspirational goals, as well as trends related to tourism growth, retail level of service, demographic and household

composition changes, and cultural, entertainment, and open space demands were reviewed against the pipeline of

known projects out to the year 2040.

By 2040, the District was projected to grow to over one million residents, add more than 250,000 new households,

offer approximately 280,000 new job opportunities, have tourism demand for 53,000 hotel rooms, and retail

demand for an additional 16,000,000 square feet. While more than 150,000,000 square feet of redevelopment is


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currently identified, a significant gap still remains between the development pipeline and the Districts

development potential. See Figure 2 : District 2040 Development Supply and Demand Projections for additional

information regarding the projected supply and demand imbalance.

Summary Supply and Demand Projections

Year: 2040 Projected Supply Projected Demand Delta

Residential Units 373,000 518,000 (146,000)

Office Squarefeet 57,844,000 63,666,000 (5,822,000)

Hotel Units 9,000 25,000 (16,000)

Retail Squarefeet 9,254,000 16,694,000 (7,441,000)

Museum/Entertainment Squarefeet 2,714,000 3,714,000 (1,000,000)

Source : Researcher's Projections

Figure 2 : District 2040Development Supply and Demand Projections


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I. Program Description

The primary proposed redevelopment site would be located immediately south of 14th

Street and Case Bridge

infrastructure and extend to the existing surface parking lots. This creates a primary redevelopment site of

approximately 142 acres, 35% of the total site area. For reference, this is roughly the size of the area in Downtown

between 15th

and 17th

Streets NW and between Pennsylvania Avenue/Lafayette Square and O Streets NW, see

Figure 2 and Figure 3 below.

Figure 3: Primary Redevelopment Site Boundaries (Source: Google Maps) N.T.S.


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Of this primary site area, more than 75 acres would be dedicated for parks, open spaces, or streetscape and

sidewalk improvements, including 18 acres of waterfront park space along the bulkhead on either side of the

development parcels and a 14 acre central public space that divides the primary redevelopment site longitudinally.

The resulting 65.6 acres would be available for redevelopment at an average FAR of 8.0. This development

intensity provides for the opportunity for 22.8 million square feet of development. Across the 395 acres of Hains

Point, this represents an FAR of 1.3 and provides opportunities for the redevelopment of almost 330 acres of parks

and open space, more than 83% of the total site area. See Appendix A: Development Site Analysis for more

information.

Figure 4: Approximate equivalent area of Primary Redevelopment Site (Source: Google Maps) N.T.S.


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II. Public Infrastructure Program and Costs

Significant public investment would be necessary to allow for this level of development intensity. This investment

primarily falls into four categories: parks/open spaces/recreation, entertainment/culture, utilities/structural

infrastructure, and transportation network. These investments, with soft costs and contingency1, are estimated at

a value of $2.7 billion dollars, see Appendix B: Project Cost Estimate for further detail.

Parks / Open Spaces / Recreation - $460.7 milliono Perimeter Parks - $23.4 milliono Center Green Park - $28.1 milliono Recreation Parks, Fields, and Structures - $323.4 milliono Streets, Sidewalks, and Bicycle Network - $85.8 million

Entertainment / Culture - $905.3 milliono Two Smithsonian-grade museums - $800 milliono Outdoor cultural and performing arts center - $57 milliono School, Library, or Community Center - $48.3 million

Utilities / Structural Infrastructure - $509.6 milliono Bulkhead Reconstruction and Canal construction - $40.8 milliono Utilities and Site Work - $198.8 milliono Cogeneration Plant and Energy Infrastructure - $270 million

Transportation - $267.9 milliono Streetcar Infrastructure - $37.5 milliono New Yellow Line Metro Station - $130.4 milliono Bridge and Highway Infrastructure - $100 million

These investments in public infrastructure will create an environment that enables redevelopment to prosper and

operate in a sustainable manner to help meet the unmet needs identified in District 2040. The investments and

creation of a new, accessible urban parks system will help to enhance the value of the surrounding real estate

while creating a valuable amenity for District residents, workers, and visitors alike. In order to be successful, these

urban parks must be easily accessible, have a high level of population density and commercial intensity

immediately nearby, and be highly managed, maintained, and operated by a non-profit entity funded largely by

1Assumes twenty percent soft costs and five percent contingency


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surrounding land and business owners for the District of Columbia. This management structure will give the

District government and residents of the District more latitude in how the parks are used, managed, and enjoyed.

The integration of the urban park system into the redevelopment plan will allow for these new parks to reach their

full potential.

Providing opportunities for increased cultural options will fulfill gaps not currently accounted for in the existing

development pipeline and will help to drive tourist demand and to integrate the redeveloped Hains Point with the

museum, memorial, and monument system of the Monumental Core. Extending the monuments into the fabric of

the new Hains Point neighborhood will create opportunities to better integrate the federal components with the

local components and character of the District. Expanding the Districts entertainment options through the

creation of a new, world-class outdoor music and performing arts venue will provide the city with an amenity that

will help the District compete with other first tier cities entertainment options and opportunities. The selection of

a marquee architect and designer for the venue will, like Bing Thoms Arena Stage or Frank Gehrys Pritzker

Pavilion, help to create another cultural icon for the District.

Significant traditional infrastructure will be needed to allow for the redevelopment of the site. This includes

creation of a utility network, expanding decentralized energy generation, structural repairs to the bulkhead, and

other major infrastructure initiatives such as the creation of an on-site energy plant. An on-site energy plant will

help to increase energy security for the District by reducing the burden on the already taxed energy grid, and

provide increased reliability, efficiency, and choice for consumers. Reconstruction of the bulkhead will help to

make the site more resilient and help to stabilize the site for the planned development intensity. The creation of

the canal will align with some of the visions included in NCPCs Monumental Core Framework Plan and will

increase potential for water-based transit services such as water taxi (National Capital Planning Commission,

2009).


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The investment in a new infill metro station will also align with goals of the Monumental Core Framework Plan and

will facilitate sustainable transportation options for the Hains Point redevelopment. Improvements to the bridge

and highways and connection to the planned streetcar system will further increase mobility options to and from

the site. These premium connections to the transportation network will further enhance the attractiveness of the

site and will be required to enable the viability of the site for redevelopment.

The grouping of dense, mixed-use development with premium transportation, robust infrastructure, cultural and

entertainment venues, and a world-class public realm will be vital to the feasibility of the proposed redevelopment

of Hains Point. These elements have positively reinforcing benefits and cannot operate or be feasible in isolation.

The proposed public infrastructure program is aimed at responding to the gaps identified and policy

recommendations made in the District 2040.


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III. Private Development Program and Costs

Similarly, the proposed private development program for Hains Point is a response to the gaps identified in the

Sustainable D-based needs projections from District 2040: Building Towards a Sustainable DC. While the

development capacity identified in the proposed redevelopment plan is not sufficient to accommodate the

majority of the supply and demand disparities identified in District 2040, it should be considered as one of the

many tools, initiatives, and projects that will need to be implemented across the District to accommodate the

growth projections. See Figure 11, below, for a summary of the proposed redevelopment program:

Figure 5: Proposed Redevelopment Program (8.0 FAR)

Summary of Proposed

Program for Redevelopment

of Hains Point

% of Total

Development GSF Units/Keys

Resident/Employee

Count Avg GSF

% of

Unmet

Demand

Residential 53.8% 12,296,250 16,025 Units 25,751 Residents 767 GSF/Unit 11.1%

Office 26.0% 5,947,500 25,747 Employees 231 GSF/Employee 18.8%

Hotel 8.0% 1,830,000 2,504 Keys 2,783 Employees 731 GSF/Key 15.8%

Retail 7.0% 1,601,250 4,323 Employees 370 GSF/Employee 21.5%

Museum/Entertainment 4.4% 1,000,000 100.0%

Other 0.9% 200,000 108 Employees

Total 100.0% 22,875,000 18,530 58,712


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i. Residential Summary

The residential mix proposed for the redevelopment program reflects a number of considerations related to the

goals ofDistrict 2040. Units have been proposed at an average size that is more in keeping with the future needs

and household composition of the District. The distribution of condominiums and apartment units reflects the

projections made by the GMU study Housing the Regions Workforce. Affordable housing requirements are based

on the current mandatory inclusionary zoning requirements(See Figure 5 for additional information) (Department

of Housing and Community Development, 2012).

This intensity of residential unit development accounts for a penetration rate of 11.1 percent2

(Steenhoek, 2012).

The majority units are intended to be flats, which will allow residents to have the option to age-in-place without

the complication of having to unnecessarily navigate flights of steps within their units. Residential unit size and

mix was adjusted to meet the average 675 net square foot target identified in District 2040, see Figure 6 below.

Additional information regarding the proposed unit mix, size, and distribution can be found in Appendix C:

2District 2040 identified a gap a 145,005 residential units in 2040, the 16,025 in the proposed redevelopment would account

for 11.1 percent of this demand.

Residential Split % GFA Total GFA Avg. GFA Total NSF

Avg

NSF

#

Units

% of

Unit Mix

Avg

Occupancy

Total

OccupancyCondo - Market 31.3% 3,852,204 909 3,389,939 800 4,236 26.4% 1.80 7,604

Condo - Affordable 2.7% 334,974 782 294,777 688 429 2.7% 1.67 716

Apartments - Market 60.7% 7,460,346 723 6,565,105 636 10,321 64.4% 1.55 15,951

Apartments - Affordable 5.3% 648,726 624 570,879 549 1,040 6.5% 1.42 1,479

TOTAL 12,296,250 767 10,820,700 675 16,025 100.0% 1.61 25,751

TOTAL % GFA Total GFA Avg. GFA Total NSF

Avg

NSF # Units

% of

Unit Mix

Avg

Occupancy

Total

Occupancy

Studio 30.4% 3,741,544 518 3,292,559 455 7,230 45.1% 1.00 7,230

1BR 30.1% 3,704,563 754 3,260,015 664 4,912 30.7% 1.50 7,368

2BR 23.0% 2,828,783 1,159 2,489,329 1,020 2,440 15.2% 2.50 6,100

3BR 16.4% 2,021,360 1,400 1,778,797 1,232 1,444 9.0% 3.50 5,053

TOTAL 100.0% 12,296,250 767 10,820,700 675 16,025 100.0% 1.61 25,751

Figure 6: Residential Redevelopment Type and Affordability Summary

Figure 7: Residential Unit Size and Type Distribution Summary


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Residential Program Summary. Community amenities such as a school or community center are planned to

provide residents with a holistic neighborhood environment that can adapt to the changing demographic needs.

Projected development costs for the residential component are $1.89 billion, see Appendix B: Project Cost

Estimate for additional information.

Many aspects of the proposed Hains Point redevelopment will make it attractive to future residents. Its unique

and overt location, transportation amenities, and balanced mix of uses will increase its competitiveness in the

regional market place. The new, robust urban parks system will provide residents with an unmatched amenity that

is well managed, highly programed, and which offers diverse opportunities for recreation. Further, the 1.6 million

square feet of retail and restaurant use will help to create a vibrant and dynamic street scape environment with

fresh choices and many opportunities to meet, congregate, and celebrate. Cultural, educational, entertainment,

and civic uses will only serve to enhance the unique offerings and attractiveness that Hains Point can offer.


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ii. Office Summary

The office component proposed for the redevelopment program reflects the continued office space demand that is

projected by District 2040 to accrue during the proposed ten year build out when unmet demand is projected to

swell from 5.8 million square feet to 31 million square feet by 2050 if no new significant office supply is identified,

see Figure 17 below.

By 2040 a pipeline of 57.8 million square feet of office development has been identified, yet projected demand of

63.6 million square feet continues to outpace this growth. At 5.9 million square feet, the proposed office

component would be sized to fulfill the entire demand in 2040. This composition will provide a daytime office

employee population of more than 25,000 which is aligned with the total resident population. Providing a

balanced mix of residential and office will help to ensure that the Hains Point redevelopment remains an active

and vibrant neighborhood during the work day as well as on the evenings and weekends. This healthy mix allows

for greater success of businesses that are located in the neighborhood because the population density and

potential customer-base remains consistent.

Hains Point will be an attractive office market opportunity because of its location, convenience, and density of use,

which is large enough to support industry clustering and specialization. The site offers premium visibility for

Year

WDCEP Office

Pipeline - 5 Yr

(GSF)

WDCEP

Cummulative

Total (GSF)

DC DOES

Employment

PROJECTIONS

to 2018

DOES

Employment

Projection

Demand (GSF) Delta (GSF)

2010 0 0 803,071 0 0

2015 7,657,894 7,657,894 844,280 9,328,975 (1,671,081)2020 9,913,480 17,571,374 887,604 19,136,665 (1,565,291)

2025 10,067,980 27,639,353 933,151 29,447,633 (1,808,279)

2030 10,067,980 37,707,333 981,036 40,287,705 (2,580,372)

2035 10,067,980 47,775,313 1,031,377 51,684,033 (3,908,720)

2040 10,067,980 57,843,292 1,084,302 63,665,160 (5,821,868)

2045 0 57,843,292 1,139,943 76,261,095 (18,417,803)

2050 0 57,843,292 1,198,439 89,503,388 (31,660,096)

Source: Researcher's analysis of WDCEP and DOES data and projections

Figure 8: Office Supply and Demand Projections


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headquarter buildings and could function as an urban office campus or integrate higher education or medical uses

within the flexible office infrastructure. Office development is already the primary real estate type in the area of

southwest between the Mall and the Washington Channel. With the planned expansion of the LEnfant Plaza

complex, the Southwest Ecodistrict, and the Wharf, access to a larger concentration of traditional private and

government office use is quick and convenient from Hains Point. Further, the Pentagon is one stop away on the

Metro, making Hains Point an ideal choice for defense contractors and others that need to be in close proximity to

the Pentagon but also desire a marquee location within the District of Columbia with unmatched views and

visibility.

Projected development costs for the office components are $1.27 billion, see Appendix B: Project Cost Estimate for

additional information.


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iii. Hotel

The hotel component of the proposed redevelopment program will bring over 2,500 much needed hotel rooms to

the District in a very tourist and visitor friendly location. These new hotel rooms will accommodate approximately

16 percent of the unmet demand identified in District 2040. The hotel program is currently anticipated to include

a variety of hotel products, with various service levels and amenities that can meet the price points of luxury

travelers, families, and business travelers. See Figure 18 for the projected hotel mix and distribution.

Luxury travelers will be attracted to Hains Points unmatched views, retail and restaurant offerings, and

entertainment options. Families will find the redevelopments close location to popular tourist destinations such

as the Jefferson Memorial, the National Mall, and the Tidal Basin as well as the new museum and cultural offerings

to be attractive. Lastly, business travelers will appreciate the convenient access to the to the almost six million

square feet of office development on-site as well as the other office concentrations at the Wharf and LEnfant

Plaza or SW Federal Center areas. All tourists, whether arriving by car, train, or airplane, will enjoy the convenient

access that Hains Point offers with direct vehicular access from I-395, adjacency to LEnfant Plaza VRE station, and

National Airport being only four metro stops away. Hains Points unique location on the water can also permit

arrival to the site from National Airport by water taxi. Additionally, Hains Points on-site new metro station,

streetcar stop, and bicycle network will make getting around the District quick and easy for visitors.

Projected development costs for the hotel components are $668 million, see Appendix B: Project Cost Estimate for

additional information.

Projected Hotel Mix

Luxury Full Service Select Service Total/Avg

% of Mix 35% 40% 25% 100%

GSF 640,500 732,000 457,500 1,830,000

Rooms 877 1,002 626 2,504

Figure 9: Projected Hotel Mix and Distribution


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iv. Retail

The retail component of the proposed redevelopment will offer approximately 1.6 million square feet of retail and

restaurant opportunities. Ground floor retail is a critical component of creating a vibrant pedestrian environment

and helps to create a more convenient and liveable environment for residents and employees. This volume of

retail is estimated to fulfill just over 20 percent of the retail undersupply in the District identified in District 2040.

The inclusion of the Hains Point retail will help bring the average retail per capita closer to regional and national

levels and will create job opportunities for up to 4,300 workers. While the majority of demand will be driven by

employees, guests, and residents in the immediate neighborhood area, the easy access and wealth of

transportation options at Hains Point will allow for the retailers and restaurateurs to capitalize on the

neighborhoods future status as a regional destination and significant tourist foot traffic visiting the cultural

offerings. Approximately 60 percent of the ground floors of the proposed buildings on Hains Point would be filled

with retail and restaurant uses3

which provide ample space for other ground floor uses such as lobbies, loading,

and service while still maintaining a critical mass and consistent retail experience. Projected development costs for

the retail components are $668 million, see Appendix B: Project Cost Estimate for additional information.

The anticipated mix of retail and restaurant/entertainment space is 40 percent to 60 percent, respectively. This

acknowledges the attraction of Hains Point as a dining and entertainment destination, the increasing trends to eat

outside of the home or office, and fact that the smaller kitchens in efficient apartments and condominiums may

not be conducive to preparing large or frequent meals (Clabaugh, 2012). A wide variety of dining options should

be provided to accommodate the needs of visitors, residents, and workers. The balanced mix of residents and

employees, paired with the strong hotel and cultural presence will provide a steady customer base for restaurant

offerings enabling locations to operate on expanded or adjusted hours as fits with their individual business plans

and clientele. This will help to ensure that restaurants and retail options dont uniformly shut down after

traditional business hours or weekends, a common criticism of downtowns that lack a healthy balance of

3Calculation assumes an average lot coverage of 80% and that 85% of all retail and restaurant offerings will be located on

ground floor.


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residential, hotel, and cultural options to balance the office uses. Restaurant uses should be distributed and

integrated with other retail offerings but should be located in spaces that offer the greatest opportunity for views

such as the waterfront perimeter or adjacent to the major park offerings.

Neighborhood and destination retail offerings typical of a community or neighborhood type center should be

interspersed with the restaurant uses throughout the proposed redevelopment but should look for opportunities

on streets with a high level of other active uses, such as hotel or office entries, but which do not necessarily offer

the premium views. These locations will have foot traffic and, while every street should not be expected to be

Main Street, will allow for a continued street level convenience retail experience on most mixed-use blocks.

Retail offerings should include neighborhood serving staples such as a centrally located grocery store, hardware

store, dry cleaner, drug store, bicycle shop, and pet stores as well as other general merchandise, soft goods, and

convenience offerings. Designing retail offerings around the daily needs of residents and workers will help to

ensure that most common needs can be met without having to leave the proposed redevelopment area. Other

specialty retail clustering opportunities should be evaluated to help create a regionally recognized retail focus in

certain niche categories. Further, limited GAFO (General merchandise, Apparel, Furniture, and Other items)

retailers should be considered to help minimize retail leakage from sales that might otherwise go to big-box or

large format retailers in surrounding jurisdictions.


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v. Parking

Approximately 13,500 parking spaces are anticipated to be constructed on two levels of parking below-grade.

While this is a significant volume of parking, it represents an aggressive parking mix and utilizes shared parking

methodology to maximize the utility of each parking spot. The strong transit oriented nature of the proposed

Hains Point redevelopment allows for these ratios to be achieved. Dedicated residential parking for the proposed

16,000 residential units represents approximately 50 percent of the available parking supply. See Figure 10 for

additional information regarding residential parking ratios.

The remaining 6,500 spaces are for shared use of the office, retail, hotel, and cultural uses. This equates to a

blended average for non-residential uses of approximately 1,600 square feet per space. The varying peak

operational hours and days of these uses provide a structure where parking space use can be shared to create an

efficient use structure which minimizes the creation of underused, single-use serving parking. Further, parking

structures should be shared or linked between individual buildings on a block or potentially joined between blocks

to increase parking garage efficiency and flexibility. At more than $40,000 per parking space, for a total projected

cost of $684 million, it is important that parking structures are designed to maximize utility, see Appendix B:

Project Cost Estimate for more information.

Residential Parking Ratios

Unit Type Unit Count Parking Ratio Parking Space Demand

Condominiums (Market 4,236 65% 2,753Condominiums (Affordable) 429 5% 21

Apartments (Market) 10,321 40% 4,128

Apartments (Affordable) 1,040 5% 52

Total 6,955

Figure 10: Residential Parking Ratio Assumptions


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B. Economic Impact Summary of Hains PointI. Total Direct Annual Tax Revenue

The redevelopment of Hains Point represents an opportunity to create significant direct tax revenue for the

District. First-year annual tax revenue projections identify $425 million dollars of annual direct taxes to the District

of Columbia. This estimate was created without accounting for additional tax revenue created from cultural or

entertainment venues and without applying aggressive multipliers or identifying indirect or induced impacts.

Further, the potential revenue stream to the District associated with land sales or ground leases has not been

accounted for. Given the intensity of development and unique nature of the site, capitalizing on the direct land

value as a potential revenue stream could be very significant for the District. Due to these factors the true

economic impact of the proposed redevelopment of Hains Point is likely significantly larger than has been stated.

See Figure 10 and Appendix D Appendix M for additional detail.

Over a thirty year period this redevelopment of Hains Point would grow to create more than $3.8 billion dollars in

new tax revenue. See Figure 12: Cumulative District Tax Revenue 2040-2070 and Appendix O: 30 Year Debt Service

and Tax Revenue Calculation for additional information.

Total Direct Annual DC Tax Revenue by Use $2012

Condominium (Affordable) $2,209,671

Apartments (Affordable) $3,184,422

Parking $25,365,876

Hotel $49,062,939

Condominium (Market) $59,297,858

Retail $92,909,949

Apartments (Market) $95,244,507

Office $98,366,610

Total $425,641,832

Figure 11: Annual Direct Tax Summary


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Figure 12: Cumulative District Tax Revenue 2040-2070 ($2012)

For the District, these impacts can be seen largely to represent net new tax revenue since the redevelopment

program of Hains Point is a response to the significant undersupply of development within the District that was

identified though the analysis of the Sustainable DC population growth targets. This redevelopment provides the

opportunity to help the District maximize its potential and will draw residents and jobs back into the central city

from the suburbs. This will create opportunities for new residents and employees, not simply a substitution of

opportunities that are already provided for within the boundaries of the District proper.


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II. Employment

In addition to providing significant opportunity to expand the Districts tax base, the redevelopment of Hains Point

would provide many important employment opportunities. In total, more than 38,000 full time equivalent jobs are

projected to be created through the redevelopment of Hains Point. This includes approximately 25,750 office jobs,

4,325 retail jobs, 2,785 hotel jobs, 110 parking related jobs, and the creation of approximately 5,565 construction

jobs, see Figure 13: Construction Employment Calculation for additional information on Construction Employment

projections.

Figure 13: Construction Employment Calculation

Employment for the thousands of architects, engineers, landscape architects, planners, designers, lawyers,

developers, and other real estate professionals has not been included in this calculation. Nor has employment

opportunities related to the cultural, entertainment, transportation, or infrastructure components of the program.

The income generated for District residents by these employment opportunities have not been included in the

calculations except to the extent that residents of Hains Point also work on Hains Point. Due to the lack of a

commuter tax, expanding employment opportunities within highly transit accessible areas within the District,

while simultaneously providing housing options for those that hold jobs in the District, is of paramount importance

in order to build a stronger and more resilient tax base within the District.

Construction Job Calculation

Value of Construction (Hard Cost) 7,165,385,600

Direct Labor 40%

Average Annual Income (1) 51,500

Total Person Years 55,653

Build Out Time Period 10 Years

Construction FTE Jobs 5,565

Source: DOES Industry and Occupational Projections 2008-2018

(1) Average income of Construction and Extraction Occupations

2008 Annual Income escalated a 3% to 2012 dollars


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III. Public Infrastructure Funding and Managementi. Public Infrastructure Funding:

A wide variety of creative opportunities and mechanisms will have to be employed for the funding of the Public

Infrastructure required for the redevelopment of Hains Point. While this study does not venture to guess what

tools would ultimately be used to fund an undertaking of this magnitude, it does offer a basic metric for

consideration using Tax Increment Financing. Currently, the Hains Point site generates zero real estate tax revenue

for the District as it is owned by the federal government. Annual full-build unescalated Real Estate Tax Revenue

projected for the redevelopment of Hains Point is $170 million dollars. The annual debt service associated for

bonds for public infrastructure in the amount of $1.7 billion4

dollars is only $100.3 million dollars. This preliminary

metric indicates that using Year One Real Estate Tax values alone would provide a debt service coverage ratio of

170 percent5.

Figure 14: Public Infrastructure Bond Debt Service Calculation

A phased development timeline of ten-years offers a more nuanced view of how new real estate tax revenue

would be accrued relative to TIF bond expenditures. As demonstrated in below in Figure 15: TIF Annual Debt

Service 2040-2070, with 10-year Build Out and Figure 16: Cumulative Debt Service and Real Estate Tax Revenue

4the value all of the Public Infrastructure with the exception of the Museums that are assumed to be funded

through private fundraising and/or government appropriations5

Issuance Costs or other associated costs have not been included in this basic calculation

Debt Service Calculation

Bond Amount $1,692,810,000

Annual Interest Rate 4.25%

Life of Loan 30

Number of Payments per Year 2

Total Number of Payments 60

Payment per Period $50,183,653

Sum of Payments $3,011,019,175Interest Cost $1,318,209,175

Annual Debt Service $100,367,306

Annual Real Estate Tax Revenue (Yr1) $170,406,313

Debt Coverage Ratio 170%


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2040-20706, the front-loaded TIF scenario would result in a few brief years where new tax revenue generated by

the redevelopment is not sufficient to cover the debt service payments however once development phases being

to deliver the debt service requirements are easily covered. During this initial period, other more mature TIF

districts may have to be looked to in order to provide coverage or techniques such as utilizing an initial interest-

only period on the bonds may need to be considered.

Figure 15: TIF Annual Debt Service 2040-2070, with 10-year Build Out

Figure 16: Cumulative Debt Service and Real Estate Tax Revenue 2040-2070

6Also see Appendix O: 30 Year Debt Service and Tax Revenue Calculation and Appendix P: Investment and Tax

Revenue Timeline 2040-2050 for additional information regarding debt service payment and new tax revenue

timing.


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Clearly, many other factors such as the health of the bond markets, the Districts credit rating, debt cap restrictions

and a myriad of other factors would need to be considered, but this illustrates the potential capacity that private

development has to support the creation of robust infrastructure investments. Other opportunities, such as the

use of an infrastructure bank or private sponsorship, could further limit the need to issue bonds for this

infrastructure. In Chicago, the construction of Millennium Park was able to raise over $220 million dollars in

private donations and sponsorships (NGA Center for Best Practices, 2007). The sponsorships of elements of the

infrastructure, public parks, spaces, cultural, and entertainment components of the Hains Point redevelopment is

another potentially highly lucrative opportunity for the District.


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ii. Public Infrastructure Management:

As discussed above, the aligned interest of the private sector with the District should be capitalized upon regarding

the basic maintenance and operations of the newly constructed public spaces and infrastructure. A business

improvement district (BID) should be established on Hains Point. Similar to the Capitol Riverfront BID, the Hains

Point BID would be able to support the maintenance and operation of the Hains Point park system. Using

prevailing assessment rates, a BID for Hains Point would be able to generate approximately $3.3 million in

assessments from property and building owners in the Hains Point neighborhood, see Appendix N: Business

Improvement Fee Generation for further information.

While this will not be sufficient to completely eliminate the need for many city services, the BID would be able to

greatly supplement the management efforts and needs of the District while maintaining a clean and safe

environment and promoting business development in the neighborhood. The Hains Point BID would be smaller

than some of the major BIDs that are in operation today but it would have a density that is roughly approximate to

the Downtown BID or NoMA BID areas, see Figure 17 below for additional detail.

Figure 17: Existing Business Improvement District Comparison

Business Improvement District Comparison

Hains Point NoMA Capi tol Riverf ront Downtown

Acres 142 240 500 640

Residential Units 16,025 10,001 10,000 6,863

Office GSF 5,947,500 22,156,000 17,000,000 80,000,000

Hotel Rooms 2,504 1,512 1,500 9,600

Retail GSF 1,601,250 1,274,950 100,000 3,444,882

Parkland 32 0 10 20

Total GSF 22,875,000 34,458,350 36,726,928 97,600,000

Sources: Researcher's analysis of 2012 NoMA Development Map, Capitol Riverfront BID Urban Design

Framework, Downtown BID: Stage of Downtown 2011, Personal Email Communication


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IV. Conclusion

As discussed in District 2040: Building Towards a Sustainable DCsignificant measures will need to be taken to allow

the District to grow to its full potential as was envisioned in the Mayors Sustainable DC initiative. Breaking New

Grounddemonstrates how a valuable asset in the District of Columbia can be utilized to help the District grow in a

sustainable manner to fulfill its potential and maintain its competitive stake in the region. The redevelopment

studied in Breaking New Groundwill create a vibrant neighborhood for District residents, both new and old, that

grows employment opportunities, provides a new tourist destination and hub, expands the Districts retail

offerings, and supports a robust urban parks system.

The redevelopment program reviewed in Breaking New Groundwould induce billions dollars in private investment,

generate hundreds of million dollars each year in new direct tax revenue, and expand tourism, housing, smallbusiness, retail, and recreation opportunities. It would create new world class museums, architecturally iconic

entertainment venues, and an unmatched civic realm.

The future prosperity of the District of Columbia and the metro region depends on its ability to support growth by

providing housing, employment, transportation, and recreation over the coming decades in a sustainable manner.

Breaking New Ground is intended to study the economic impacts of one potential redevelopment scenarios for

Hains Point.


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Hains PointBreaking New Groundby the numbers:

- $6 billion dollars in Private Investment- $2.7 billion dollars in new Public Infrastructure- $3.8 billion dollars of net new Real Estate Tax Revenue by 2070- $425 million dollars in annual Direct Tax Revenue- $11.6 billion dollars of taxable real estate value- 22.8 million square-feet of high density mixed use development- Housing for more than 25,000 District Residents- 33,000 new permanent jobs- 5,500 construction jobs- 1,500 new affordable housing units- 2,500 new hotel rooms- 1.6 million square-feet of retail and restaurant to help stop retail leakage- 1 new metro station- 2 new Smithsonian quality museums- 300+ acre world-class urban park system- $3.3 million dollars in annual Business Improvement District assessments- 1 new outdoor performing arts center


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Property Act of 2006. Washington: US Government Printing Office.

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Corporation.

Canal Park Development Association, Inc. (2012). History. Retrieved November 25, 2012, from

canalparkdc.org: http://www.canalparkdc.org/about/history

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December 9, 2012, from capitolriverfront.org:

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Clabaugh, J. (2012, October 9). Washingtonians Eating Out More. Retrieved December 9, 2012, from

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more.html

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Delta Associates. (2011). Washington Area Retail Outlook, Mid-Year 2011. Washington: Delta Associates.

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Program. Retrieved December 2, 2012, from dhcd.dc.gov:

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Gandhi, N. M. (2008). Fiscal Impact Statement: "Tax Increment Revenue Bonds Waterfront Arts Project

Refundable TIF Approval Resolution of 2008". Washington: Government of the District of

Columbia.

Greendoor Advisors; Delta Associates. (2010). St. Elizabeth's East Campus Market Study. Washington:

Delta Associates.

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Transportation Engineers.

Mix, T., & Jiang, X. (2009). Demographic Multipliers in Delaware. Newark: University of Delaware.

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National Capital Planning Commission.

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National Capital Planning Commission. (2010).About Washington's Parks and Open Space. Washington:

National Capital Planning Commission.

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NoMa BID. (2012, February). NoMa Development Map 2012. Retrieved December 9, 2012, from

nomabid.org: http://www.nomabid.org/wp/wp-

content/uploads/2012/02/NoMaDevMap_2012.pdf

Office of Mayor. (2012). The Five-Year Economic Develment Strategy for the District of Columbia.

Washington: Government of the District of Columbia.

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Analysis: City Market at O Street,Washington DC. Washington: District of Columbia.

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November 24, 2012, from dmped.dc.gov:

http://dmped.dc.gov/DC/DMPED/Projects/Anacostia+Waterfront+Initiative/Anacostia+Waterfr

ont+Neighborhood+Projects/ci.The+Yards.print

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Retrieved November 25, 2012, from Office of the Deputy Mayor for Planning and EconomicDevelopment: http://dmped.dc.gov/DC/DMPED/Projects/Development+Projects

Office of the Mayor. (2012).A Vision for a Sustainable DC. Washington: District of Columbia.

Social Compact, Inc. (2008). Washington, DC Neighborhood Market DrillDown: Catalyzing Business

Investment in Inner City Neighborhoods. Washington: Social Compact, Inc.

Steenhoek, M. (2012). District 2040: Building Towards a Sustainable DC. Alexandria: Virginia Tech.

Strurtevant, L., & Fuller, S. (2011). Housing the Region's Workforce: Policy Challenges for Local

Jurisdictions. Arlington, VA: George Mason University.

The Trust for Public Land. (2010). 2010 City Park Facts. Washington: The Trust for Public Land.

Uhlir, E. K. (2006). The Millennium Park Effect: Creating a Cultural Venue with Economic Impact. New

York: Americans For the Arts.

Washington DC Economic Partnership. (2012). Development Tracker Database. Washington: Washington

DC Economic Partnership.

Zipper, D. (2012). Retail Development Strategies, Washington DC. Retrieved November 24, 2012, from

http://www.mayorsinnovation.org: http://www.mayorsinnovation.org/pdf/DavidZipper.pdf


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Appendix


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Appendix A: Development Site AnalysisHAINSPOINT20

40

DevelopmentSiteAnalysis

ProjectSiteAre

a

DevelopSite

ParksPerimiter

CenterGreen

Road/Public

Realm

OtherParks

System

Development

Pads

FAR-

Developm

ent

PadsOnly

Calc(no

Public

Realm)

AltFAR

Calc-

EntireSite

Width

1,975

250

250

8.0

5.36

1.3

Length

3,125

3,125

2,500

GSFPotential

SQFT

6,171,875SQFT

781,250SQFT

625,000SQFT

1,906,250SQFT11,029,969SQFT2,859,375SQFT

22,875,000GSF

Acres

141.7Acres

17.9Acres

14.3Acres

43.8Acres

253.2Acres

65.6Acres

PercentageoftotalHainsPointArea:

35.9%

4.5%

3.6%

11.1%

64.1%

16.6%

Acres

SQFT

EastPotomacParkTotal:

394.9

17,201,844

TotalOpenSpace

329.3

14,342,469

OpenSpace%

83.38%


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Appendix B: Project Cost EstimateHAINS POINT 2040

Project Costs

Unit Quantity Unit Price Amount

Public Infrastructure Costs

Bulkhead Reconstruction/Repair/Canal lf 10,200 $4,000 $40,800,000 $40,800,000

Hains Point Parks/Fields/Structures sf 12,936,219 $25 $323,405,475 $323,400,000

Bandshell/Entertainment/Cultural 200,000 $285 $57,000,000 $57,000,000

Museums (2) sf 800,000 $1,000 $800,000,000 $800,000,000

School/Library/Other sf 92,000 $525 $48,300,000 $48,300,000

Center Green sf 625,000 $45 $28,125,000 $28,100,000

Parks Perimiter sf 781,250 $30 $23,437,500 $23,400,000

Streets/Sidewalks sf 1,906,250 $45 $85,781,250 $85,800,000

Streetcar mi 2.5 $15,000,000 $37,500,000 $37,500,000

WMATA Station 1 $130,400,000 $130,400,000 $130,400,000

Bridge and Highway Infrastructure 1 $100,000,000 $100,000,000 $100,000,000

Utilities/Site Work sf 3,312,500 $60 $198,750,000 $198,800,000

Cogeneration Plant MW 27 $10,000,000 $270,000,000 $270,000,000

Subtotal $2,143,500,000

Soft Costs 20% $428,700,000

Contingency 5% $128,610,000

Total Public $2,700,810,000

Private Costs

66% Residential (Apartments) sf 8,109,072 $185 $1,500,178,279 $1,500,200,000

34% Residential (Condo) sf 4,187,178 $215 $900,243,318 $900,200,000

Office sf 5,947,500 $170 $1,011,075,000 $1,011,100,000

Hotel sf 1,830,000 $290 $530,700,000 $530,700,000

Retail sf 1,601,250 $130 $208,162,500 $208,200,000

Garage sf 5,718,750 $95 $543,281,250 $543,300,000

Museum/Entertainment above

Other above

Subtotal $4,693,700,000

Soft Cost 20% $938,740,000

Contingency 5% $281,622,000Total Private $5,914,062,000

Total TOTAL $8,614,872,000

Construction Jobs

Value of Construction (Hard Cost) 7,165,385,600

Direct Labor 40%

Average Annual Income (1) 51,500

Total Person Years 55,653

Build Out 10

Construction FTE Jobs 5,565


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Appendix C: Residential Program Summary

HAINS POINT 2040

Residential Program Summary

Percent Affordable 8%

Residential Split % GFA Total GFA

Avg.

GFA Total NSF

Avg

NSF # Units

% of

Unit Mix

Total

OccupancyCondo - Market 31.3% 3,852,204 909 3,389,939 800 4,236 26.4% 7,604

Condo - Affordable 2.7% 334,974 782 294,777 688 429 2.7% 716

Apartments - Market 60.7% 7,460,346 723 6,565,105 636 10,321 64.4% 15,951

Apartments - Affordable 5.3% 648,726 624 570,879 549 1,040 6.5% 1,479

TOTAL 12,296,250 767 10,820,700 675 16,025 100.0% 25,751

Condo - Market % GFA Total GFA

Avg.

GFA Total NSF

Avg

NSF # Units

% of

Unit Mix

Total

Occupancy

Studio 20.0% 770,441 568 677,988 500 1,356 32.0% 1,356

1BR 30.0% 1,155,661 795 1,016,982 700 1,453 34.3% 2,179

2BR 30.0% 1,155,661 1,250 1,016,982 1,100 925 21.8% 2,311

3BR 20.0% 770,441 1,534 677,988 1,350 502 11.9% 1,758

Subtotal 100.0% 3,852,204 909 3,389,939 800 4,236 100.0% 7,604

Condo - Affordable % GFA Total GFA

Avg.

GFA Total NSF

Avg

NSF # Units

% of

Unit Mix

Total

Occupancy

Studio 30.0% 100,492 511 88,433 450 197 45.9% 197

1BR 25.0% 83,744 767 73,694 675 109 25.5% 164

2BR 25.0% 83,744 1,136 73,694 1,000 74 17.2% 184

3BR 20.0% 66,995 1,364 58,955 1,200 49 11.5% 172

Subtotal 100.0% 334,974 782 294,777 688 429 100.0% 716

Apartments - Market % GFA Total GFA

Avg.

GFA Total NSF

Avg

NSF # Units

% of

Unit Mix

Total

Occupancy

Studio 35.0% 2,611,121 511 2,297,787 450 5,106 49.5% 5,1061BR 30.0% 2,238,104 739 1,969,531 650 3,030 29.4% 4,545

2BR 20.0% 1,492,069 1,108 1,313,021 975 1,347 13.0% 3,367

3BR 15.0% 1,119,052 1,335 984,766 1,175 838 8.1% 2,933

Subtotal 100.0% 7,460,346 723 6,565,105 636 10,321 100.0% 15,951

Apartments - Affordable % GFA Total GFA

Avg.

GFA Total NSF

Avg

NSF # Units

% of

Unit Mix

Total

Occupancy

Studio 40.0% 259,490 455 228,351 400 571 54.9% 571

1BR 35.0% 227,054 710 199,808 625 320 30.7% 480

2BR 15.0% 97,309 1,023 85,632 900 95 9.1% 238

3BR 10.0% 64,873 1,193 57,088 1,050 54 5.2% 190

Subtotal 100.0% 648,726 624 570,879 549 1,040 100.0% 1,479

TOTAL % GFA Total GFA

Avg.

GFA Total NSF

Avg

NSF # Units

% of

Unit Mix

Total

Occupancy

Studio 30.4% 3,741,544 518 3,292,559 455 7,230 45.1% 7,230

1BR 30.1% 3,704,563 754 3,260,015 664 4,912 30.7% 7,368

2BR 23.0% 2,828,783 1,159 2,489,329 1,020 2,440 15.2% 6,100

3BR 16.4% 2,021,360 1,400 1,778,797 1,232 1,444 9.0% 5,053

TOTAL 100.0% 12,296,250 767 10,820,700 675 16,025 100.0% 25,751


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Appendix D: Economic Impact SummaryHAINS POINT 2040

Economic Impact Summary

Real Estate Tax Taxable Value Tax Value /SF Annual Real Estate Tax

Retail $1,319,085,295 $824 $24,403,078

Office $4,091,880,000 $688 $75,699,780Hotel $791,473,360 $432 $14,642,257

Condominium (Market) $1,932,378,018 $570 $17,004,927

Condominium (Affordable) $58,909,752 $200 $518,406

Apartments (Market) $2,538,741,247 $387 $22,340,923

Apartments (Affordable) $61,042,700 $107 $537,176

Parking $824,852,280 $144 $15,259,767

Total $11,618,362,651 $170,406,313

Retail Space Tax (Non Real Estate) Taxable Sales Related Tax

General Retail $309,361,500 $17,840,039

Restaurant $574,528,500 $50,486,980

Total $883,890,000 $68,327,019

Private Sector Office Direct Tax Gross DC Taxes Related Tax

$16,240,440 $16,240,440

Hotel Related Tax Revenue Taxable Sales Related Tax

Room Tax $156,771,773 $15,677,177

Other Guest Expenses $65,609,332 $5,576,793

Non-guest Food and Beverage $31,078,105 $2,377,475

Other $10,203,192

Total $253,459,210 $33,834,638

Employee Related Sales Tax Revenue Taxable Sales Related Tax

Retail $2,248,155 $179,852

Office $80,329,870 $6,426,390

Hotel $6,511,605 $586,044

Parking $253,536 $20,283

Total $89,343,166 $7,212,569

DC Resident Income Tax Total Potential Income Tax

Condominium (Market) $546,627,743 $30,638,827

Condominium (Affordable) $25,386,266 $1,205,330

Apartments (Market) $546,627,743 $2 $58,724,376

Apartments (Affordable) $63,932,015 $1,784,164

Total $1,182,573,767 $92,352,698

DC Resident Retail Expenditures Total Potential Capture Rate Sales Tax

Condominium (Market) $174,920,878 35.00% $4,591,673

Condominium (Affordable) $6,663,895 40.00% $199,917

Apartments (Market) $343,738,368 35.00% $9,023,132

Apartments (Affordable) $19,179,605 40.00% $575,388

Total $544,502,745 $14,390,110

Other DC Resident Related Fees Other Related Fees

Condominium (Market) $2,623,813

Condominium (Affordable) $114,238

Apartments (Market) $5,156,076

Apartments (Affordable) $287,694Total $8,181,821

Condo Transfer/Resale Fees Annual Turn over Transfer Tax

Condominium (Market) 7.00% $4,438,617

Condominium (Affordable) 7.00% $171,780

Total $4,610,398

Parking

Sales Tax $10,085,826

TOTAL DIRECT ANNUAL DC TAX REVENUE $425,641,832


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Appendix E: Annual Direct DC Tax Revenue by Use

HAINS POINT 2040

Annual Direct DC Tax Revenue By Use

Total Direct Annual DC Tax Revenue by Use

Condominium (Affordable) $7.50 $2,209,671

Apartments (Affordable) $5.58 $3,184,422

Parking $4.44 $25,365,876

Hotel $26.81 $49,062,939

Condominium (Market) $17.49 $59,297,858

Retail $58.02 $92,909,949

Apartments (Market) $14.51 $95,244,507

Office $16.54 $98,366,610

Total $18.61 $425,641,832


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Appendix F: Retail Annual Direct DC Tax RevenueHAINS POINT 2040

Retail - Annual Direct DC Tax Revenue - $2012

Project Description Direct Project Full Time Employment (a)

General Retail 640,500 gsf 667 sf per retail job (d)

Restaurant/Entertainment 960,750 gsf 961 retail jobs

Total Retail 1,601,250 gsf 286 sf per Restaurant/Entertainment (d)

3,363 restaurant/entertainment jobs

4,323 total jobs

370 avg retail/restaurant sf per job

Value Projection Gen Retail Restaurant

Rent per SF $45 $60

Vacancy 5.00% 5.00%

Less: vacancy ($2.25) ($3.00)

Effective Rent per SF $42.75 $57.00

Expense Ratio 8.00% 8.00%

Less: expenses ($3.42) ($4.56)

NOI per SF $39.33 $52.44

Cap Rate (c) 6.25% 5.50%

Market Value per SF $629.28 $953.45

7.25% 6.25% Retail Building

Real Estate Tax one sf total sf General Retail Real Estate Value $629.28 $403,053,840

Restaurant Real Estate Value $953.45 $916,031,455

Total Taxable Real Estate Value (assessment) 100.00% of value $823.78 $1,319,085,295

Real Estate Tax Revenue 1.85% commercial tax rate $15.24 $24,403,078

Total Rest Estate Tax Revenue $24,403,078

General Retail Direct Tax Revenues one sf total sf

On-site Taxable Retail Sales (Adjusted 8% for vacancy) $525 per sf $483.00 $309,361,500

DC Average Applicable Sales Tax 5.75% $27.77 $17,788,286

Sales Tax Net of On-Site Residents of Office Tenants 75.00% not on-site consumers $20.83 $13,341,215

DC Corporate Tax 9.975% on 10% Profit on Gross $3,085,881

Business Personal Property $50 FF&E per sf $50.00 $32,025,000

Business Personal Property Tax $3.40 per $100 assessed value $1.70 $1,088,850

Other Operating Taxes and Fees (b) (Adjusted for 8% vacancy) $0.55 per sf $0.51 $324,093

DC General Retail Related Tax Capture $17,840,039

Restaurtant/Entertainment Direct Tax Revenues one sf total sf

On-site Taxalble Retail Sales (adjusted for 8% vacancy) $650 per sf $598.00 $574,528,500

DC Average ApplicableSales Tax 9.00% $53.82 $51,707,565

21) Sales Tax Net of On-Site Residents or Office Tenants 80.00% not on-site consumers $43.06 $41,366,052

DC Corporate Tax 9.975% on 10% Profit on Gross $5.97 $5,730,922

Business Personal Property (adjust for 5% vacancy) $95 FF&E per sf $90.25 $86,707,688


Other Operating Taxes and Fees (b) $0.50 per sf $0.46 $441,945

DC Restaurent Related Tax Capture $50,486,980

Employee Related Sales Tax Revenue one sf total sf

FTE Employee Retail Expenditures Subject to Sales Tax $45 per FTE per week $2,248,155

Employee Related Sales Tax 8.00% Mostly Meals $179,852

Total Direct Annual Tax Revenue

Total Direct Annual Tax Revenue $58.02 $92,909,949

Notes

(a) Full time equivalent (40 hrs/wk) employees

(b) Misc. fees, operations purchases, utility, and telecom fees, and other business license and related fees and charges

(c) See CBRE Cap Rate Survey - August 2011, http://www.cbre.us/o/minneapolis/Asse tLibrary/PCGMN_CapRateSurvey_Aug2011[2].pdf

(d) See Demographic Multipliers in Delaware, June 2009. Mix, Troy and Jiang, Xuan.

Retail e mployment 1.0-2.0 per 1,000 SF, Eating and Drinking 3.0-4.0 employees per 1,000 SF

http://dspace.udel.edu:8080/dspace/bitstream/handle/19716/4279/DelMultipliers.pdf?sequence=1


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Appendix G: Office Annual Direct DC Tax RevenueHAINS POINT 2040

Office - Annual Direct DC Tax Revenue - $2012


General Office 5,947,500 gsf 231 sf per office job

Retail (see retail she) 0 gsf 25,747 office jobs

Total Office 5,947,500 gsf 25,747 total jobs

Value Projection Office

Rent per SF $40

Vacancy 5.00%

Less: vacancy ($2.00)

Effective Rent per SF $38.00

Expense Ratio 14.00%

Less: expenses ($5.32)

NOI per SF $32.68

Cap Rate (c) 4.75%

Market Value per SF $688.00

Office Building

Real Estate Tax one sf total sf

General Office Real Estate Value $688.00 $4,091,880,000

Retail Real Estate Value $420.00 $0

Total Taxable Real Estate Value (assessment) 100.00% of value $688.00 $4,091,880,000Real Estate Tax Revenue 1.85% commercial tax rate $12.73 $75,699,780


Private Sector Office Direct Tax (75% private occupancy) one sf total sf

Taxable Gross Revenues s (Adjusted 5% for vacancy) $120,000 per employee $370.13 $2,201,347,403

DC Corporate Tax 9.975% on 5% Profit on Gross $10,979,220

Business Personal Property $2,250 per employee $9.25 $55,033,685.06


Other Operating Taxes and Fees (b) (Adjusted for 5% vacancy) $0.60 per sf $0.57 $3,390,075

DC General Office Related Tax Capture $16,240,440

Employee Related Sales Tax Revenue one sf total sf

FTE Employee Retail Expenditures Subject to Sales Tax $60 per FTE per week $80,329,870

Employee Related Sales Tax 8.00% Mostly Meals $6,426,390


Total Direct Annual Tax Revenue $16.54 $98,366,610

Notes



(c) See CBRE Cap Rate Survey - August 2011, http://www.cbre.us/o/minneapoli s/AssetLibrary/PCGMN_CapRateSurvey_Aug2011[2].pdf


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Appendix H: Hotel - Annual Direct DC Tax RevenueHAINS POINT 2040

Hotel - Annual Direct DC Tax Revenue - $2012


Hotel Rooms 2,504 rooms 0.9 jobs per room (d)

1,830,000 gsf 2,783 hotel jobs

731 gsf per room 2,783 total jobs

Projected Hotel MixLuxury Full Service Select Service Total/Avg

% of Mix 35% 40% 25% 100%

GSF 640,500 732,000 457,500 1,830,000

Rooms 877 1,002 626 2,504

ADR 290 195 190 227

Gross Annual Income 105,850 71,175 69,350 246,375

Occupancy 73.00% 75.00% 80.00% 76% 42977.42

Effective Gross Income Per Room 77,271 53,381 55,480 $62,267

Expense Ratio 58.00% 58.00% 58.00%

Less:expenses (44,817) (30,961) (32,178)

NOI per Room 32,454 22,420 23,302 $26,152

Cap Rate (c) 8.00% 8.50% 8.50%

Total Value Per Room 405,670 263,766 274,136 316,025

Total Value 355,595,086$ 264,237,088$ 171,641,186$ 791,473,360$

Hotel Building

Real Estate Tax one room total roomsGeneral Hotel Real Estate Value $316,025.13 $791,473,360

Retail Real Estate Value $0.00 $0

Total Taxable Real Estate Value (assessment) 100.00% of value $1,083,178.15 $791,473,360

Real Estate Tax Revenue 1.85% commercial tax rate $20,038.80 $14,642,257


Direct Use Related Tax Revenues one room total rooms

Room Nights 75.55% Occupancy 276 690,625

Room Revenue (Net of Parking) $227 ADR $62,597 $156,771,773

Transient Accomodations Tax 10.00% per employee $6,260 $15,677,177.31

Other Hotel Expenditure (inc. restaurant) $95.00 per occupied room night $26,197 $65,609,332

Other Hotel Guest Sales Tax 8.50% Tax Rate $2,227 $5,576,793

Business Personal Property $40,415 FF&E per Room $40,415 $101,217,886.15

Business Persronal Property Tax $3.40 per $100 assessed value $1,374 $3,441,408

Other Operating Taxes and fees (b) $6.13 per room night $1,690 $4,233,528

Total Direct Use Related Taxes $2.00 $28,928,907

DC Direct Use Tax Capture 100.00% net DC sales $11,551 $28,928,907

Other Direct Tax Revenue one room total rooms

Non-Hotel Related Food & Beverage Sales $45 per day per room day $12,409 $31,078,104.81

DC Average Applicable Sales Tax 9.00% $1,117 $2,797,029

Sales Tax Net of Hotel Guests 85.00% not on-site consumers $949 $2,377,475

DC Corporate Tax 9.975% on 10% profit on gross $1,009 $2,528,256

Total Other direct Tax Revenue $1,959 $4,905,731

Other Direct DC Tax Capture 100.00% net DC sales $1,959 $4,905,731

Employee Retaleted Sales Tax Revenue

FTE Employee Retail Expenditures Subject to Sales Tax $45 per FTE per week $2,600 $6,511,605

Employee Related Sales Tax 9.00% mostly meals $234 $586,044


Total Direct Annual Tax Revenue $19,590.20 $49,062,939

Notes


(b) Misc. fees, operations purchases, utility, and telecom fees, and other business license and related fees and charges(c) See CBRE Cap Rate Survey - August 2011, http://www.cbre.us/o/minneapoli s/AssetLibrary/PCGMN_CapRateSurvey_Aug2011[2].pdf

(d) See Institute of Transportation Engineers - Trip Generation, 7th Edition, p541 ( http://www.anaheim.net/departmentfolders/pl anning/LakeHotel/AppendixQ.pdf )


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Appendix I: Condominium (Market Rate) Annual Direct DC Tax RevenueHAINS POINT 2040

Condominium (Market Rate) - Annual Direct DC Tax Revenue - $2012

Project Description Project Related DC Residents

Condominiums 4,664 units 1.80 person/household

Market Component 91% 4,236 occupied units

Market Units 4,236 units 7,604 total residentsAverage Size 800 NSF 100.00% net residents

Total Saleable SF 3,389,939 NSF 7,604 DC Residents

Market Condo Buil ding


Condominium Real Estate Value $645.00 $2,186,510,971

DC Homestead Exemption $60,000 per unit ($74.97) ($254,132,953)

Taxable Residential Real Estate Value $570.03 $1,932,378,018

Residential Real Estate Tax 0.88% residential tax rate $5.02 $17,004,927

Total Real Estate Tax Revenue $17,004,927

Residential Direct Tax Revenues One Unit Total Units

Average Unit Values $645.00 per sf $516,228 2,186,510,971

Required Gross HH Income 25.00% multiple of unit value $129,057 $546,627,743

Taxable Income 80.00% of gross $103,246 $437,302,194

Initial DC Income Tax $30,000.00 of initial taxable income $2,000 $8,471,098

Additional DC Income Tax 8.70% DC tax rate over initial $6,372 $26,990,507TOTAL Potential DC Income Tax $8,372 $35,461,606

Income Taxes Adjuste for Average Occupancy 96.00% Occupancy $8,037 $34,043,142

Potential DC Residents 90.00% of residents pay taxes $7,234 $30,638,827

Income Tax Revenue Adjusted for Resident Status $7,234 $30,638,827

New Resident Retail Expenditures Subject to Sales Tax 40.00% of taxable income $41,298 $174,920,878

District of Columbia Resident Sales Capture 35.00% of expenditures $14,454 $61,222,307

DC Average Applicable Sales Tax (a) 7.50% blend of categories $1,084 $4,591,673

Other Resident Related Use Taxes and Fees 0.60% of taxable income $619 $2,623,813

Personal Property Tax not considered

Total Residential Direct Tax Revenues $37,854,314

Recurring Property Resale Transfer Taxes One Unit Total Units

Annual Re-sales Relates Taxes (2.9% combined fees) 7.00% turnover $1,048 $4,438,617

Total Direct Annual Tax RevenueTotal Direct Annual Tax Revenue $14,000 $59,297,858

Notes

(a) blend of sales tax and services and restaurant sales tax



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Appendix J: Condominium (Affordable) Annual Direct DC Tax RevenueHAINS POINT 2040

Condominium (Affordable) - Annual Direct DC Tax Revenue - $2012


Condominiums 4,664 units 1.67 person/household

Market Component 9% 429 occupied units

Market Units 429 units 716 total residentsAverage Size 688 NSF 100.00% net residents

Total Saleable SF 294,777 NSF 716 DC Residents

Affordable Condo Building


Condominium Real Estate Value $287.07 $84,620,887

DC Homestead Exemption $60,000 per unit ( $87. 22) ( $25, 711,135)

Taxable Residential Real Estate Value $199.84 $58,909,752

Residential Real Estate Tax 0.88% residential tax rate $1.76 $518,406

Total Real Estate Tax Revenue $518,406


Average Unit Values $287.07 per sf $197,473 84,620,887



Initial DC Income Tax $30,000.00 of initial taxable income $2,000 $857,038

Additional DC Income Tax 8.70% DC tax rate over initial $1,256 $538,019TOTAL Potential DC Income Tax $3,256 $1,395,057





District of Columbia Resident Sales Capture 40.00% of expenditures $6,220 $2,665,558

DC Average Applicable Sales Tax (a) 7.50% blend of categories $467 $199,917

Other Resident Related Use Taxes and Fees 0.60% of taxable income $267 $114,238

Personal Property Tax not considered

Total Residential Direct Tax Revenues $1,519,485

Recurring Property Resale Transfer Taxes One Unit Total Units

Annual Re-sales Relates Taxes (2.9% combined fees) 7.00% turnover $401 $171,780

Total Direct Annual Tax RevenueTotal Direct Annual Tax Revenue $5,157 $2,209,671

Notes

(a) blend of sales tax and services and restaurant sales tax



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Appendix K: Apartment (Market Rate) Annual Direct DC Tax RevenueHAINS POINT 2040

Apartment (Market Rate) - Annual Direct DC Tax Revenue - $2012


Total Apartments 11,361 units 1.55 person/household

Market Component 91% 10,321 occupied units

Market Units 10,321 units 15,951 total residents

Average Size 636 NSF 100.00% net residents

Total Saleable SF 6,565,105 NSF 15,951 DC Residents

Value Projection

Average GSF per Unit 723

Average NSF per Unit 636

Rent per NSF $4.04

Monthly Rent per Unit $2,570

Annual Rent per Unit $30,838

Vacancy Rate 4.70%

Less: vacancy ($1,449)

Effective Rent per Unit 29,388

Less: expenses per unit ($11,413)

NOI per Unit $17,975

Cap Rate (c) 4.75%

Market Value per Unit $378,427

Market Value per NSF 594.93$

Market Apartment


Apartment Real Estate Value 594.93$ $3,905,755,765

Real Estate Assesment 65.00% $386.70 $2,538,741,247

Residential Real Estate Tax 3170 0.88% residential tax rate $3.40 $22,340,923

Total Real Estate Tax Revenue 114120 $22,340,923


Monthly Rent $4.04 per sf $2,570 26,523,022



Initial DC Income Tax $30,000.00 of initial taxable income $2,000 $20,642,054

Additional DC Income Tax 8.70% DC tax rate over initial $4,634 $47,825,214

TOTAL Potential DC Income Tax $6,634 $68,467,268





District of Columbia Resident Sales Capture 35.00% of expenditu

Documents

2013-01-13 Breaking New Ground Hains Point Redevelopment Economic Impact Study - M.steenhoek Rev1