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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NoMa BID. (2012, February). NoMa Development Map 2012. Retrieved December 9, 2012, from
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content/uploads/2012/02/NoMaDevMap_2012.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
Business Personal Property Tax $3.40 per $100 assessed value $3.07 $2,948,061
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
Project Description Direct Project Full Time Employment (a)
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
Total Rest Estate Tax Revenue $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
Business Personal Property Tax $3.40 per $100 assessed value $0.31 $1,871,145
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
Total Direct Annual Tax Revenue $16.54 $98,366,610
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/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
Project Description Direct Project Full Time Employment (a)
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
Total Rest Estate Tax Revenue $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
Total Direct Annual Tax Revenue $19,590.20 $49,062,939
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/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
Real Estate Tax one sf total sf
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
(b) Misc. fees, operations purchases, utility, and telecom fees, and other business license and related fees and charges
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Appendix J: Condominium (Affordable) Annual Direct DC Tax RevenueHAINS POINT 2040
Condominium (Affordable) - Annual Direct DC Tax Revenue - $2012
Project Description Project Related DC Residents
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
Real Estate Tax one sf total sf
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
Residential Direct Tax Revenues One Unit Total Units
Average Unit Values $287.07 per sf $197,473 84,620,887
Required Gross HH Income 30.00% multiple of unit value $59,242 $25,386,266
Taxable Income 75.00% of gross $44,431 $19,039,700
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
Income Taxes Adjuste for Average Occupancy 96.00% Occupancy $3,125 $1,339,255
Potential DC Residents 90.00% of residents pay taxes $2,813 $1,205,330
Income Tax Revenue Adjusted for Resident Status $2,813 $1,205,330
New Resident Retail Expenditures Subject to Sales Tax 35.00% of taxable income $15,551 $6,663,895
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
(b) Misc. fees, operations purchases, utility, and telecom fees, and other business license and related fees and charges
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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
Project Description Project Related DC Residents
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
Real Estate Tax one sf total sf
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
Residential Direct Tax Revenues One Unit Total Units
Monthly Rent $4.04 per sf $2,570 26,523,022
Required Gross HH Income 300.00% multiple of unit value $92,513 $954,828,800
Taxable Income 90.00% of gross $83,262 $859,345,920
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
Income Taxes Adjuste for Average Occupancy 95.30% Occupancy $6,322 $65,249,307
Potential DC Residents 90.00% of residents pay taxes $5,690 $58,724,376
Income Tax Revenue Adjusted for Resident Status $5,690 $58,724,376
New Resident Retail Expenditures Subject to Sales Tax 40.00% of taxable income $33,305 $343,738,368
District of Columbia Resident Sales Capture 35.00% of expenditu