Finance and Budget Chair Dan Carson spoke last week on the fiscal impact of Nishi and explained his commission’s vote.
Good evening commissioners.
For the record my name is Dan Carson. I’m Chair of the Finance and Budget Commission. Our commission reviewed this project and it’s not in our jurisdiction to recommend approval or not, but we did review the fiscal impacts as regards to the city.
Some of the public comments I’ve seen online, there is a lot of confusion about what we’ve said. I just wanted to put it clearly on the record that by a 5 to 2 vote, after extensive discussion and public testimony, we did conclude that the city staff’s model which showed $13 million dollars in one time fiscal benefits from this project, a modest net fiscal benefit on an ongoing basis each year, we considered those conclusions to be reasonable.
We point out in our analysis that there’s different scenarios that would make the project look better on an ongoing basis. For example, if the parcel tax package approved by the council last night were to be approved it would significantly change the numbers in the positive direction. But of course if that parcel tax were rejected it would move it a little bit the other direction as well.
There are important changes in the development agreement, it’s not a final document, we get back the $350,000 dollars that the city front-ended for pre-development costs a few years back. There’s some additional monies. There’s also credits that are provided for some of the transportation improvements.
Our general recommendation to the council has been: get a residual land value analysis so that we know what you should be bargaining for with all these amenities, but also assuming the increase in the value of the land to the applicant the city should get the maximum that it can while still retaining, of course, a viable return on investments so that they can finance this project. Try to strike that balance, is what we’re urging the council to do.
The commission voted 5-2 on a motion in which they found: “We also generally concur with the estimate that annual ongoing revenues and costs for the city from the project would be modestly net positive over time.”
According to the staff analysis: “The Nishi project is anticipated to be revenue positive according to the fiscal model analysis. The project will contribute property taxes to the City’s General Fund based on the value of the property. The new property tax revenue for this project would be $2.6 million over 15-years with a valuation of $266 million and a tax rate share of 6.9275%. If the tax rate share went to 10.3912%, the revenue over 15-years period would be $3.9 million. Sales tax revenue over 15-years is $ 2.8 million.”
Staff finds: “Over a 15-year period, the project will contribute $13.8 million in revenue projections while expensing $12.2 million in expenditures. Parks, greenbelts, street trees, all residential street and connectors will be maintained by the development.”
As the commission notes, “the commission did not have available to it a complete and detailed description of the project, a supplemental environmental analysis, or a development agreement with the city. Therefore, any conclusions we have reached should be considered preliminary and subject to change and our commission will continue to review these numbers.”