AgdaPkt 2005-10-24 - Laserfiche WebLink

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%!-¿fl EXHIBIT 3 20- YEAR DISCOUNTED MUNICIPAL REVENUE ANALYSIS (1) GENERAL ASSUMPTIONS 2005 DOLLARS Assumptions R&D Tenant Traditional Office Tenant Stanford Hospital And Clinics Notes: (1) Pertains to revenues accruing to the City of Redwood City General Fund. (2) Provided by the City of Redwood City Finance Director. (3) Represents first year Stanford Hospital and Clinics or a traditional office tenant, based on market research conducted by CBRE Consulting, will have stabilized occupancy. (4) Pursuant to Proposition 13. (5) Based on review of Real Capital Analytics, San Francisco Office Market Trends and Trades report for third quarter 2004, Real Estate Research Corporation third quarter 2004 Real Estate Report, and Korpacz third quarter 2004 report. The interim assessment capitalization rate is reflective of current strong capital markets for quality real estate products and the current low interest rate environment. The reassessment upon sale rate is based on terminal capitalization rates used today by institutional investors. (6) According to the State Board of Equalization, the jobsite is regarded as a place of business of a construction contractor or subcontractor. Therefore, all hard construction costs (less estimated labor costs) and furniture fixtures are taxed in the locality of the job site. (7) Estimated total hard costs are estimated at $15 per square foot for R&D and office in tenant improvements, based on market research conducted by CBRE Consulting. For Stanford Hospital and Clinics refer to Exhibit 4. (8) Percentage is derived from analysis of information provided by several Bay Area contractors, construction services consultants, and construction industry trade groups. For the traditional office the reduction for non-taxable costs is 50 percent of the total hard costs. For Stanford Hospital ond Clinics refer to Exhibit 4. (9) Applied to total stabilized square feet. (10) The existing building does hove an on-site cafeteria. For the R&D and Traditional Office Tenant it is unknown whether the cafeteria will be maintained. Stanford anticipates a total of 5,049 gross square feet of cafeteria space. (11) Average taxable sales data provided by Stanford Hospital and Clinics for the cafeteria derived from existing Stanford operations and anticipated sales ot the Mid-Point facility. It is anticipated that the cafeteria will generate $750,000 in taxable sales (2003 dollars). The average sales per square foot in 2003 dollars is $148.54, and $157.59 in 2005 dollars. The 2005 figure used in this analysis is rounded to the nearest dollar. (12) Assumption for the R&D and traditional office tenant based on market research conducted by CBRE Consulting, and located in Appendix B. For Stanford Hospital and Clinics it is the actual ratio based on the total number of employees. (13) Estimate provided by Stanford Hospital ond Clinics. (14) Projected workday local retail expenditures generated by employees are estimated based on analysis of figures developed by the Internationol Council of Shopping Centers, "Office Worker Retail Spending Patterns." Employees in suburban locations spend approximately $2,832 (2005 dollors) annually within their work communities. Due to the limited retail proximate to the Mid Point facility this assumption was reduced by 25 percent to $2,124. Of the total, it is estimated that lunch purchases account for 15.8 percent of those expenditures. Since it is expected that Stanford Hospital and Clinics employees will primarily (but not exclusively) take lunch at the facility's cafeteria, the annual workday expenditures by each employee were conservatively reduced by 15.8 percent to $1 ,676 (2005 dollars). (15) Estimate provided by Stanford Hospital and Clinics. (16) Based on McGill University Health Centre outpatient/escort/visitor survey, April 2002. Projected local visitor spending is $10.93 (2005 dollars) and adjusted down by 50 percent to account for on-site purchases. (17) The utility users' tax also applies to intrastate telephone usage. However, this analysis is conservative and does not include utility users' tax resulting from telephone usage because the data are not available. (18) Estimated by Stanford Hospital and Clinics based on existing comparable R&D and office buildings. (19) Estimated by Stanford Hospital and Clinics based on existing comparable medical and office facilities. Assumes all four of the buildings are medical office. The higher rate is reflective of the increased cost associated with operating medical facilities. (20) Assumption provided by CBRE Consulting. (21) Based on data provided by Pacific Gas & Electric reflective of the increase in average gas rates between 1988 and 2004. N/A denotes not applicable. Sources: Stanford Hospital and Clinics; CB Richard Ellis; City of Redwood City; CoStar; Real Capital Analytics; Real Estate Research Corporation; Korpacz; International Council of Shopping Centers, Office Worker Retail Spending Patterns, 2004; McGill University Health Centre Outpatient/Escort/Visitor Survey, April 2002; Pacific Gas & Electric; Walgreen Company, 2004 Form 1 O-K; and CBRE Consulting. Q:\proiects\2004\ 1004150 Stanford Hosp. Redwood Citv\ Workina Docs\Fiscal Benefit\rStanford Fiscal6.xlslEx1 UB1 27 -Sep-05