AgdaPkt 2005-10-24 - Laserfiche WebLink

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7/l-z/ CB RICHARD ELLIS CONSULTING Sedway Group CBRE C8 RICHARD ELLIS Mr. Larry Carr September 15, 2005 Page 9 examination of the expenditures, it is assumed that 60.0 percent, or $3.2 million, of the expenditures represent annual transactions subject to use tax. It is assumed that 1.0 percent of these taxable sales will flow to the City of Redwood City in the form of annual use tax revenues. While clinic operations are not estimated to begin until start of 2008, expenditures are assumed to be required starting in mid-2007 to ensure smooth operations and to appropriately equip the facility to meet patient needs. These are conservative assumptions given they do not include local sales tax generated from Stanford Hospital and Clinics spending within Redwood City. Transient Occupancy Tax. Exhibit 6 details estimated transient occupancy tax revenues generated by Stanford Hospital and Clinics patients. Stanford Hospital and Clinics estimates annual patient visits totaling 188,262. It is estimated that patients residing outside the Greater San Francisco Bay Area will generate 20.0 percent of the annual patient visits. The analysis assumes on average, 33 percent of the patients from outside the Greater San Francisco Bay will require an overnight stay, resulting in annual overnight patient stays of 9,413. CBRE Consulting conservatively estimates that Redwood City hotels capture approximately 33 percent of the room demand, or 3,106 annual overnight stays. CBRE Consulting estimates average Redwood City hotel room rates of $76 per night (2008 dollars).l0 The estimated annual Redwood City room rate revenue totals $236,081 (2008 dollars). This total room revenue will be subject to the transient occupancy tax of 10 percent paid to the City of Redwood City. Therefore, 1O percent of the total of these annual room revenues, or $23,608 (2008 dollars), will flow to the City of Redwood City in the form of annual transient occupancy tax revenues. CONCLUSIONS Comparative Fiscal Revenues Analysis The present value findings for the two comparative uses are displayed in the following table. These findings are documented in Exhibits 7, 8, and 9, with the detailed analyses presented in Exhibits 1O, 11, and 12. Exhibit 14 presents the summary findings. As these findings indicate, the R&D tenant is projected to generate $2.6 million in revenues to the City of Redwood City General Fund over a 20- year period. The comparable figure for the traditional office tenants is $2.8 million. For both tenants, revenues are derived largely from property taxes and sales taxes. Stanford Hospital and Clinics use compares quite favorably to these figures with a 20-year revenue projection of $2.9 million, or a figure slightly higher than the R&D user and equivalent to the traditional office tenant. 20-Year Discounted General Fund Revenue Analysis 2006 Dollars Tenant 20-Year Present Value R&D Tenant $2,552,116 Traditional Office Tenant $2,815,183 Stanford Hospital and Clinic $2,885,998 These findings indicate that any perception that the City of Redwood City is incurring an opportunity cost if the Excite@Home space is transitioned to medical facility use is unfounded. Instead, Stanford Hospital and Clinics will likely slightly outperform the alternative R&D use of the building, and even 10 Refer to Exhibit 6 for explanation of average room rate.