AgdaPkt 2005-10-24 - Laserfiche WebLink

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;:::R- /5 CB RICHARD ElLIS CONSULTING Sedway Group CBR C8 RICHARD ELLIS Mr. Larry Carr September 15, 2005 Page 3 benefit from these expenditures because of their taxable retail sales generation potential, but so too will the locally-owned businesses of Redwood City. ApPROACH Fiscal Revenues Analysis CBRE Consulting conducted a quantitative analysis comparing the fiscal revenues attributable to prospective R&D and office use of the property to the revenues attributable to Stanford Hospital and Clinic's out-patient medical facility. The comparative fiscal impact analysis focused on several key General Fund revenue sources, including property taxes, sales taxes, and utility users' taxes. The analysis was conducted in 2006 dollars for a period of 20 years. The year 2006 was selected because it is the year Stanford anticipates taking ownership of the property. A period of 20 years was selected for the revenue analysis. This is a conservative assumption given that the anticipated lifespan of medical equipment and improvements is much shorter, typically 8 to 12 years. The General Fund revenue stream was discounted to a present value for comparative purposes, where the present value is the value of the future revenues generated by the property discounted to 2006 (i.e., the value of the revenues if all were received by the City in 2006, the year Stanford Hospital and Clinics takes possession). All future references to "present value" refer to the present value of this General Fund revenue stream. Based on information provided by the City of Redwood City finance Department, a discount rate of 3.12 percent was used. Select Economic and Other Public Benefits While Stanford Hospital and Clinics will not generate property tax revenues for the City of Redwood City, there will be economic benefits to the Redwood City economy. The most readily quantifiable of these benefits include the support of local businesses through local employee spending and patient spending. The analysis includes projections of these local economic benefits, demonstrating the extent to which local business sales may be attributable to the operation of the clinic. In addition, Stanford Hospital and Clinics will make select payments to the City of Redwood City for impacts on the community, such as traffic, water, and sewer impact fees. Conservative and Reality-Based Assumption The analysis by necessity includes a number of operational assumptions. Every effort was made to approach the formulation of the assumptions in a conservative and reality-based manner. For example, where possible, assumptions were based on actual performance of existing Stanford Hospital and Clinics operations, including those of the departments anticipated to be relocated to Redwood City. Inherent conservatisms include an assumption of no local spending by the Stanford Hospital and Clinics in Redwood City, in recognition of existing vendor contracts in other Peninsula locations. .