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HomeMy WebLinkAboutGPAC_2005_05_0211111111 lill 111111111111111111111111111111,111111*NEW FILE* G PAC_2005_05_02 May 2, 2005 7:00-9:00 p.m. 7:00 I. CITY OF NEWPORT BEACH GENERAL PLAN ADVISORY COMMITTEE AGENDA Call to Order OASIS Senior Center 5t" and Marguerite 7:05 II. Fiscal Analysis of the General Plan Alternatives 8:45 III. • 8:50 IV • Discussion of Future Agenda Items Public Comments Public Comments are invited on items generally considered to be within ,the subject matter jurisdiction of this Committee -- Speakers are asked to limit comments to 5 minutes. Before speaking, please state your name and city of residence for the record. *Reports are available on line at www.nbvision2025.com Fiscal Analysis Of The General Plan Alternatives April 27, 2005 Prepared for City of Newport Beach Prepared by Applied Development Economics 2029 University Avenue • Berkeley, California 94704 • (510) 548-5912 1029 J Street, Suite 310 • Sacramento, California 95814 • (916) 441-0323 www.adeusa.com C� • CONTENTS n LJ • Introduction And Summary 1 Fiscal Impact Of The Alternatives....................................................4 Citywide Alternatives.....................................................................4 Fiscal Impact Of Subarea Options........... Airport Business Area ................................ Balboa Village .............................................. Banning Ranch .............................. Cannery Village .............................. Corona Del Mar ............................ LidoIsle .......................................... Lido Village .................................... Mariners Mile ................................. ...................................7 ................................... 7 ................................... 8 ................................... 8 ................................11 ................................12 ................................12 ................................14 ................................14 McfaddenSquare......................................................................... 15 Newport Center/Fashion Island..............................................17 OldNewport Blvd......................................................................17 West Newport Highway And Adjoining Residential. ............ 18 West Newport Industrial........................................................... 18 A Note On Residential Assessed Values ....................................... 21 • i� INTRODUCTION AND SUMMARY The fiscal analysis of the General Plan Alternatives is based on the model described in the report entitled FiscalIvipact Analysis and Model, dated January 2004. The report described the methodology used to develop the fiscal model and presents a fiscal analysis of existing land uses in Newport Beach, as well as analyses of future growth both at Newport Coast and for the city as a whole based on the existing General Plan. The present report analyzes several citywide alternatives identified through analysis of trip generation rates for each development option identified by the GPAC in geographic subareas of the City. The analysis evaluates the new development that would occur in each General Plan alternative. The report also presents a fiscal analysis of every option for each study area. However, from a fiscal perspective, the planning goal is to achieve a positive fiscal result citywide, not necessarily in each subarea. This requires a balance of land uses across the city, and each neighborhood or commercial district will provide only a piece of the total land use mix. Therefore, the results from the individual subareas should be viewed as "building blocks", for use in creating citywide development alternatives that make fiscal sense. The City would not likely want all future growth to be concentrated in one type of land use or another, because individual land uses depend on each other from an economic standpoint, as illustrated in Figure 1 below. For example, by themselves, residential and office uses sometimes create a negative fiscal impact, yet they provide the income and living environment necessary to support the retail uses that provide more of the fiscal benefit for the City. City of Newport Beach Figure 1 Economic and Fiscal Relationships in Newport Beach 7111 Purchase Newport Beach _ products and services r' Net Tax Dollars t Worker -earnings for Services x from businesses Other basic outside Newport Beach Jobs&� I Net Tox Dollers�Industrial Inwma for Services -Public Beaches Regional Visitor Shopping Spending Newport Beach Jobs & Households Income Income Loral Purchases Jobs & Net lax Dollars LIncome for Services Net Tax Dollars — Retail and for Services Service Business to Business Local �— Transactions Purchases —� and Visitor Spending In general, the individual land uses generate similar impacts as • demonstrated in the earlier analysis of general plan buildout for the City (Figure 2). Office and industrial uses typically do not generate enough property tax to offset the cost of services for those uses. However, retail, lodging and service commercial uses show a positive fiscal benefit, primarily due to sales taxes they generate as well as Transient Occupancy Tax (TOT) revenues from overnight stays. Public uses tend to require more in service costs than they generate in tax revenues. Figure 3 shows the net benefit of land uses serving primarily visitors. Average -priced housing creates a negative fiscal impact while higher -priced units tend to pay for themselves in terms of their cost/revenue balance for the City.' As shown in Figure 2, the total existing residential housing stock in Newport Beach is estimated to create a negative fiscal impact of $7.7 million annually, due in part to the fact that assessed values tend to degrade in relation to market values over time. The types of housing included in the General Plan Alternatives, • I In this context, "average prices" range from the low $400,000's for townhouses to the low $600,000's for single family units, while `higher prices` range fiom $600,000 for townhomes to $800,000 for single family units. City of Newport Beach combined with current market trends, result in higher property tax revenues than is typically generated by the • current housing stock. This leads to a positive fiscal outcome for most of the residential scenarios analyzed in this report (more discussion of residential values is provided at the end of this report). • • FIGURE 2 Overall Cost -Revenue Impact of Existing Land Uses ($ Millions) TOTAL = $0.1 Million Public -$6.9 Industrial -$1.6 Office Residential I -$7.7 Institutional $0.07 Service Commercial $1.9 Marine $2.4 FIGURE 3 Impact of Existing Visitors ($ Millions) TOTAL = $4.7 Million Public -$7.5 Institutional $0 Service Commercial $0.1 Marine $0.2 Lodging $7.6 Industrial $0 Retail $3.1 r ntial $0.7 City of Newport Beach 3 • • FISCAL IMPACT OF THE ALTERNATIVES CITYWIDE ALTERNATIVES The fiscal performance of the alternatives and the various options for the sub -%teas is a function largely of their land use combination and the amount of new development of each type. Three citywide alternatives were assembled, representing low and high levels of traffic generation. These same alternatives have been evaluated here from a fiscal standpoint; but perhaps not surprisingly, the results are the reverse of the traffic analysis. The maximum trip generation alternative generates the best fiscal benefit. While the two minimum traffic generation alternatives still generate positive fiscal results, they have lower net revenues (Table 1). The outcome for the minimum alternatives could be significantly affected by the cost of purchasing Banning Ranch for open space, if the cost were borne by the City of Newport Beach. As discussed below in the section on Banning Ranch, the cost of the land could require bond payments as high as $10.3 million annually. This would cause both of the minimum alternatives to show a negative fiscal impact. However, it is possible this transaction could be undertaken by other groups of agencies, or perhaps with the aid of state or federal funds. For these reasons, the land purchase has not been included in the figures in Table 1, but it must be recognized that the cost of the open space option at Banning Ranch could be substantial. A number of the individual options for many of the subareas do show a negative fiscal impact, as discussed in more detail in the next section, Table 2 provides some perspective for this discussion by presenting the individual options that comprise the citywide alternatives. The table indicates the percent contribution of each area to the grand total for each alternative, and demonstrates that although some of the areas have negative fiscal impacts, the magnitude of the impact is minimal. City of Newport Beach TABLE 1 Fiscal Impact of General Plan Alternatives Service ALTERNATIVES Total Residential Office Retail Industrial Lodging Marine Commercial Institutional Public �Subareaonly $5,325,466. $232,327 _($M,,973) $383,142 $1,762 $5,'91%656$674,832 $174,318 ($1,160,055) ($65,54,1 �•0 13ons.Minirnum Subarea Only $10,321,718 $985,111 ($726,305) $860,417 $97,038 $9,659,692 $674,832 $179,556 ($1,244,653) ($163,970) City of Newport Beach 5 • TABLE 2 Detailed Alternatives Analysis Subarea Subarea Only Only True Options Options Minimum Minimum Maximum AIRPORT BUSINESS AREA General Plan Growth -2.1% GPAC Alternatives Growth Option 2 52.8% Option 3 34.2% BALBOA VILLAGE GPAC Alternatives Growth Option 3 -25.4% -0.1% Option 4 -1.8% BANNING RANCH GPAC Alternatives Growth Option 1-•Open Space -1.0% 0.1% Option 2-Taylor Woodrow 6.8% CANNERY VILLAGE TAZ 1449/CANNERY VILLAGE WEST General Plan Growth -0.2% GPAC Alternatives Growth 0.8% 0.4% TAZ 1454/CANNERY VILLAGE EAST GPAC Alternatives Growth Option 1 0.6% Ophon 2 -26.1% -1.6% CORONA DEL MAR GPAC Alternatives Growth Option 1 1.5% Option 2 47.6% 2.8% LIDO ISLE General Plan Growth 0.6% GPAC Alternatives Growth Option 1-No change 0.0% 0.0% LIDO VILLAGE TAZ 1452 General Plan Growth 0.2% GPAC Alternatives Growth Option 2 13.0% Option 3-mixed use 1.8% TAZ 1453 General Plan Growth -9.0% GPAC Alternatives Growth Option 1 0.4% Option 2 0.8% MARINERS MILE TOTAL PLANNING AREA General Plan Growth 32.8% GPAC Alternatives Growth Option 2 17.9% 9.2% MCFADDEN SQUARE TAZ 1450 General Plan Growth 3.4% GPAC Alternatives Growth 9.1% 4.7% TAZ 1451 General Plan Growth 4.5% GPAC Alternatives Growth 19.6% 10.1% NEWPORT CENTER/FASHION ISLAND General Plan Growth 272.6% GPAC Alternatives Growth Option 1 38.1% Option 2 8.1% City of Newport Beach G', TABLE 2 . Detailed Alternatives Analysis (continued) Subarea Subarea Only Only True Options Options Minimum Minimum Maximum OLD NEWPORT BOULEVARD TAZ 1432 General Plan Growth 23.6% GPAC Alternatives Growth Option 1 1.0% Option 2 3.0% WEST NEWPORT HIGHWAY Block A 2 (spec needs housing) 0.0%Option Option 4 (parking lot) 0.9% 0.1% _ Block B (no change, est. exist dug) 0.0% 0.0% 0.0% Block C 0 Option 1 (vertical mixed use) -4.9% Option 4 (limit rti, hsg, & hotel) 108.1% 6.4% Non -Study Area 35.4% 2.1% 1.1% WEST NEWPORT INDUSTRIAL GPAC Alternatives Growth Option 2 (total TAZ) -15.4% Option 3 (total TAZ) -365.6% -21.8% TOTAL* 100,00/0 100.00/0 100.0% *Note: Totals do not add due to rounding. FISCAL IMPACT OF SUBAREA OPTIONS An analysis was run for every land use option in each subarea in the General Plan alternatives analysis. The analysis addresses only the incremental land use change, and does not account for existing land uses that would remain in place for each alternative. While the options within each subarea may be mutually exclusive, the fiscal results for the options may be added to those for options in other subareas to create results for any combination of subareas throughout the City. A brief discussion of each subarea is provided below. AIRPORT BUSINESS AREA According to the existing General Plan Growth Scenario, the Airport Business area would add primarily commercial and office development, with little change in the number of hotel rooms. This scenario produces a negative fiscal effect, primarily due to the amount of office space in relation to other land uses (Table 3). City of Newport Beach Under the GPAC alternatives, Option 1 would see • substantially more office development, but also significant growth in lodging. New retail development would be similar to the existing General Plan. This option produces a very strong $3.2 million in annual net revenues. Option 2 introduces mixed use residential and commercial development, with less office space and lodging than in Option 1. It performs very well, with $2.8 million in annual net revenue. Option 3 expands the mixed use development over Option 2, and provides much less office space, but the same amount of hotel development as in Option 2. It has the best fiscal impact of the GPAC options in this area, with $3.5 million in annual net revenues. BALBOA VILLAGE There are five options in this area in addition to the existing General Plan (Table 4). Under the General Plan Growth Scenario, the area would see growth in condominiums and single-family units in lieu of some existing single family units. There would also be a small amount of new retail and office • development. Overall, this scenario creates a negative fiscal impact of about $93,000 per year. The first three GPAC alternatives show very similar residential development patterns as the General Plan alternative, but with slightly varying amounts of commercial or office space. Their fiscal effects ate very similar to the General Plan, ranging from negative $80,000 to negative $93,500. Options 4 and 5 include mixed use development, featuring residential over retail space. Option 5 also includes new hotel space, not included in any of the other options. The hotel development creates a positive fiscal impact for Option 5, while Option 4 remains slightly negative. BANNING RANCH In the General Plan Growth Scenario, the Banning Ranch Area is slated to have 21496 multi -family units, in addition to 225 single-family units. There would be commercial development to support the residential uses, as well as industrial and office uses in portions of the site adjacent to • the existing West Newport industrial area. It is anticipated City of Newpod Beach • • • that this site would support higher than average residential values, and the General Plan scenario produces a modest positive fiscal impact of about $27,000 per year. The GPAC options range from devoting the entire site to open space (Option 1) to various levels of residential and commercial uses substantially below the amount allowed by the existing General Plan (Options 2 and 3), with no office or industrial space. These middle option are variations on the previously proposed Taylor Woodrow project, and both create a healthy fiscal benefit of nearly $600,000 to $700,000 per year (Table 5). Option 4 would include a resort on a smaller portion of the site, with relatively little housing and no industrial or office space. However, the lodging development would create a $1.7 million net fiscal benefit, which is the best result of all the scenarios for Banning Ranch. The open space option would entail significant cost to purchase and maintain the land at Banning Ranch. The value of the land is dependent upon the development options available to it. For this analysis, we have taken the approach of estimating the total value of the various land use options included in the alternatives analysis and then setting the land value at 25 percent of total value for each option (Table 6). The development permitted under the existing General Plan is the most intensive of the options, and would result in a total development value of over $1.7 billion. Options 2 and 3 reduce this value somewhat. Option 4, a small scale resort development, represents the lowest overall value project, primarily because it uses only a small portion of the site. We have taken the average of these alternatives to represent the potential value of a project at Banning Ranch. This results in a potential land value of $226 million. If the community were to approve a 30-year bond measure to finance this purchase, the annual debt service would be about $10.3 million. City of Newport Beach TABLE 3 Fiscal Impact For Airport Business Area Service AIRPORT BUSINESS AREA Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public General Plan Growth ($6,656) $0 ($189 853) $84,777 ($18,959) 1654292 $0 $45,196 tG($8,943 15,635 PACAitemativessGrowth Option 3 $3,525,627 $340,968 ($39,044) $163,033 $223,432 $2,984,052 $0 $28 616 ($88 402) ($87 029) TABLE 4 Fiscal Impact For Balboa Village Service BALBOA VILLAGE Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public General Plan Growth ($93,184 $71,746) ($36,041) $5,768 $0 $0 $0 $6,133 $0 $2,702 GPAC Alternatives Growth 0 tion 3 0 433) 71746, $20 14S) $5 768 0 0 0 3,948 0 17Q aOotion 4 18 9q ($25:467) $�ut Option 5 $1,868,324 ($41,132) $12,452 $46,416 $0 $1,928 057 $0 ($1387) $0 ($76 082) TABLE 5 Fiscal Impact For Banning Ranch Service BANNING RANCH Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public City of Newport Beach 10 As discussed in the Introduction, other options may be • possible for purchasing the land, some of which may not require any investment from the City of Newport Beach itself. Therefore, the land purchase has been kept separate from the fiscal impact of the onsite land uses in Table 5. TABLE 6 Estimated Land and Development Values at Banning Ranch LAND USE General Plan DEVELOPMENT OPTIONS Option 2 Option 3 Option 4 RESIDENTIAL Single Family $202,500,000 $787,500,000 $392,400,000 $0 Multi -Family $1,388,400,000 $487,275,000 $142,675,000 $26,000,000 Subtotal Residential $1,590,900,000 $1,274,775,000 $535,075,000 $26,000,000 NON-RESIDENTIAL Office $33,431,918 $0 $0 $0 Retail $1,859,526 $2,789,289 $1,301,668 $929,763 Industrial $108,976,964 $0 $0 $0 Lodging $0 $5,997,503 $5,997,503 $20,951,277 Service Commercial $12,395,592 $3,593,977 $1,677,189 $1,197,992 Subtotal Non -Residential $156,664,000 $12,380,768 $8,976,360 $23,079,032 ESTIMATED LAND VALUE $436,891,000 $321,788,942 $136,012,840 $12,269,758 • AVERAGE AMONG THE OPTIONS $226,740,635 ANNUAL COST* $10,316,699 *13ased on a 30 year bond @ 5% Source: ADE., Inc. • CANNERY VILLAGE The east and west villages have been addressed separately in the analysis (Table 7). CANNERY VILLAGE WEST (TAZ 1449) Under the existing General Plan, this area would see a small amount of condominium development and some commercial growth. This scenario has a minor negative fiscal impact. The GPAC alternative would include mixed -use development with residential over commercial space, and increase the intensity of development over the existing General Plan. All of the land uses in this option are fiscally positive, totaling about $45,000 in net revenue per year. City of Newport Beach 11 • CANNERY VILLAGE EAST (TAZ 1 454) The existing General Plan would allow additional condominium development along with a small amount of retail, office and waterfront industrial development in this area. The industrial uses contribute to a negative fiscal impact, although if the future development includes boat sales along with repair, it could actually be a positive fiscal benefit. The GPAC Option 1 would have mixed use development at greater intensities, while Option 2 focuses mainly on multi- family residential development, in place of some of die existing commercial space in the area. The mixed use development in Option 1 creates a positive fiscal impact, while the mix of land uses in Option 2 is negative. CORONA DEL MAR According to the General Plan Growth Scenario, the Corona del Mar area will add some single family residential development, with supporting commercial and professional office space. The single family units create a positive fiscal • effect, and the scenario as a whole produces more than $129,000 per year in net revenue (Table 8). Options 1 and 2 introduce mixed -use space, along with the new single family units. These options have even higher fiscal benefits due to the higher intensity of residential development. • LIDO ISLE The existing General Plan would allow additional growth in single family units. In addition to this option, the GPAC also defined an alternative that would keep development as it currently exists in the area. The existing General Plan development scenario would increase property values in the area and have a positive fiscal benefit of about $64,000 per year, which would not be realized with the alternative (Table 9). City of Newport Beach 12 TABLE 7 Fiscal Impact For Cannery Village Service CANNERY VILLAGE Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public Alternatives Growth $42,519 $20,228 $10,876 $10,153 $0 $0 $0 $592 $0 $669 TAZ 1454/CANNERY VILLAGE EAST GPAC Alternatives Growth Optio�,i $66,861 ,$31836 $49,612 6367 ("t3" 9144)- $0 $0 Option 2 ($82,669) ($8,619) $49,612 ($58,996) ($39,144) $0 $0 ($19 275) $0 ($6 247) TABLE 8 Fiscal Impact For Corona Del Mar Service CORONA DEL MAR Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public I-General-Plan-Grdwilt $129,552--_$86,603. I$34902) $54,370-. $0 - $0 $0 $15W _-- - to t OS GPAC Alternatives Growth 0 do 152 88 $108,866 1622 11 Q 0 Q 12 437 6 Option $151,051 $103,760 $43,485 $7,767 $0 $0 $0 ($4483) $0 $522 TABLE 9 Fiscal Impact For Lido Isle Service LIDO ISLE Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public General Plan Growth $64,569 $63,271 $0 $0 $0 $0 0 $0 $0 $1,298 GPACAItematives.Growth - - - " - - Option 1-No change to ebsting uses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 City of Newport Beach 13 • LIDO VILLAGE The north and south sections of this subarea have been addressed separately in the analysis (Table 9). LIDO VILLAGE NORTH (TAZ 1452) In the northern portion of Lido Village, little growth would occur in the General Plan Scenario and there is little fiscal effect. Under the GPAC alternatives, both Option 1 and Option 3 would include mixed use development, with residential over commercial space. Option 2 focuses more on retail and visitor accommodation, although Option 1 also includes new hotel space. Due to the hotel space, Options 1 and 2 return a substantial $1.3 million annual fiscal benefit, while the Option 3 fiscal impact is a much more modest $95,000 per year (Table 10). LIDO VILLAGE SOUTH (TAZ 1453) The existing General Plan for this area would allow some new • office development and a small amount of new commercial space. The office space contributes to an overall negative fiscal impact by this scenario of more than $28,000 per year. Under the GPAC alternatives, Option 1 would increase the retail development potential and reduce office space, while Option 2 would have mixed use residential and retail space and no new office space. While both of these options are positive fiscally, Option 2 performs much better at $78,000 per year in net revenues (Table 10). MARINERS MILE In the General Plan Growth Scenario, the Mariners Mile project area is projected to include additional office space, and a small amount of hotel development. This scenario would result in a positive fiscal impact of about $103,000 per year (Table 11). The GPAC options would add mixed use development, substantially increasing the amount of housing development in the area, along with the same increase in lodging as in the • existing General Plan. In addition, Option 2 would focus on marine uses in -lieu of some of the other non-residential land City of Newport Beach 14 • C] • uses. This would boost the fiscal benefit of the option to more than $950,000 per year, up from $305,000 per year under Option 1. MCFADDEN SQUARE The east and west portions of this subarea have been addressed separately in the analysis (Table 12). MCFADDEN SQUARE EAST (TAZ 1450) The existing General Plan would permit some increase in single family attached housing in this area, along with a small amount of commercial development. This land use mix produces a small fiscal benefit of about $10,000 per year. The GPAC alternatives would include mixed use development with residential over office space. There would also be additional lodging development, which substantially increases the fiscal benefit by $483,000 per year (Table 12). MCFADDEN SQUARE WEST (TAZ 1451) In this area, the existing General Plan would also allow some single-family detached units along with townhouse or duplex developments. As with the east side of this area, this mix produces a modest positive fiscal benefit ($14,000 per year). The GPAC alternative would focus on lodging development with some supporting commercial space, creating net positive revenues of over $1 million annually. TABLE SO Fiscal Impact For Lido Village Service LIDO VILLAGE Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public TABLE 11 Fiscal Impact For Mariners Mile Service MARINERS MILE Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public TABLE 12 Fiscal Impact For McFadden Square MCFADDEN SQUARE Total Housing Office Retail Industrial Lodging Service Marine Commercial Institutional Public TAZ 1450 6" t- la Growth - f088f 5I60 0 - 99 0 0 - 2 to 2 GPAC Altematives Growth TAZ 1451 $483,564 $20,724 ($34,509) $17,422 $4,999 $483,568 $0 $7,169 $0 ($15,808) GeneraLPlan Growth 4223 9" 1 113 -t8.499 to 0 10 7 11010 50 GPAC Altematives Growth _ $1,045,852. $229 $888 2,642 $0 $0 _ $0_ _ $1,361 $0 ($41,274) City of Newport Beach 16 • NEWPORT CENTER/FASHION ISLAND The existing General Plan would allow some increases in nearly all of the existing land uses including commercial, office and hotels. There would be no increase in residential development, however. This scenario creates a fiscal benefit of more than $860,000 per year (Table 13). The GPAC alternatives would have varying amounts of new development in the non-residential land use categories, along with potentially substantial increases in multi -family residential development. Option 1 would have significantly more hotel development than would either the existing General Plan or the other GPAC options, and would also significantly increase the amount of retail development in the area. This combination of land uses creates the best fiscal benefit in the area, at $3.9 million per year (Table 13). Option 2 significantly increases the amount of office space that would be permitted, which reduces the fiscal benefit of this scenario to $428,000. Option 3 has the same office and hotel growth as the existing general Plan, but increases retail • development over Option 2, thus resulting in a mid -range fiscal benefit for this area of $927,000 per year. Also, this option has more housing than the others, and given the anticipated market segments for the housing this increases the fiscal benefit of the option. OLD NEWPORT BLVD. The existing General Plan option increases single family attached units along with some commercial and office space. This scenario would have a positive fiscal impact of about $74,000 per year (Table 14). The GPAC options focus on mixed use residential and commercial development, along with a small amount of additional lodging. In addition, Option 1 includes increased medical offices in the area. However, with the lodging and an increased component of retail development, Option 1 has a solid fiscal benefit of about $99,000 per year. Option 2 performs much better without the office space, despite having slightly less retail development. It produces about $161,000 per year. Option 3 deletes the lodging and has a fiscal benefit of only $18,000 • per year. City of Newport Beach 17 WEST NEWPORT HIGHWAY AND • ADJOINING RESIDENTIAL The existing General Plan would see very little additional development in this area and a modest fiscal benefit. The GPAC Option 1 adds mixed use residential and commercial development, with some reduction in the existing lodging rooms in the area. This results in a negative fiscal impact of more than $500,000 per year. Option 2 concentrates on adding some housing and more lodging to the area, and has the best fiscal benefit, at about $1.2 million annually. Option 3 adds more commercial and open space but also results in a reduction of lodging, and a resulting negative fiscal impact. Option 4 provides limited additional retail, residential and hotel development, with a positive fiscal impact of more than $340,000 per year. WEST NEWPORT INDUSTRIAL This area features growth in industrial and office uses and expansion of the hospital. The hospital is certainly a major community resource, and in many ways is lilcely an economic engine in terms of fostering related medical office development and possibly medical equipment sales. However, because it is operated by a non-profit religious group, the City receives very little property tax from the hospital. The available revenues do not cover the estimated city services costs. This greatly influences the outcome of all the development scenarios in this area. The potential impact of the hospital expansion is approximately negative $1 million annually. In addition to the hospital project, the three GPAC options in this area include progressively larger components of multi- family housing development. Option 1 also includes substantial industrial development along with a moderate amount of office space, creating a negative $1.3 million annual fiscal impact (Table 16). Option 2 includes some commercial development and a very large medical office component, but reduces the amount of industrial development compared to Option 1. Option 2 has the worst fiscal impact of the three, at negative $1.5 million. Option 3 includes the most housing development of the three -and • actually reduces some of the existing industrial space to make room for the housing and new office development. This. option has the best fiscal result, at negative $1.1 million. City of Newport Beach 18 TABLE 13 Fiscal Impact For Newport Center/Fashion Island Service NEWPORT CENTER/FASHION ISLAND Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public laneral. Plan Growth 864,583 0 23'Of5 - 49 635 0 724,743 -O 36 082 410b 18 76f GPAC Altematives Growth 93i,206 SiS29 1i&438) -264;744 "6 3'839.177 0 68599 - 5 672 '738 Option 2 428,956 7,184 (489.715) 93.818 0 724,743 0 89.723 (4.101) 7.304 TABLE 14 Fiscal Impact For Old Newport Boulevard Service OLD NEWPORT BOULEVARD Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public laenera i-Plan Growth 74 836 - 53 47 - 6 400) 11,66Z 13 42 0 983 0 4 58 City of Newport Beach 19 i • • TABLE 15 Fiscal Impact For West Newport Highway and Adjoining Residential Service WEST NEWPORT HIGHWAY AND ADJOINING RESIDENTIAL Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public Gene -P a Gro 7 634 _($511 t0 t6.056 t0 $O 11.264 0 6 GPAC Alternatives Change (estimated) Block A [Option of l res 66 7-19 0- $0-- 0 0 0 50 Option 4 (parking lot) Block B (no change, est. exist dus) Block C $2,866 $3,080 $0 $0 $0 $0 $0 $0 $0 ($215) IOotioo CyArt al mtmd use) MSQ3 762) $45,396 $0 57,681.41;0 E 8$5 6.806) $0 t4,439 - 50 525,528] 0 tion 2 (dus & hotel) 11,262,151 $352 $0 $15,610 $0 $1,301,917 $0 ($3,043) $0 ($52,684 0 tian_3.(rnmlWflot- onsdid) Option 4 (limit rd, hsg, & hotel) $342,926 $352 $0 $1,189 $0 $357 562 $0 ($1485) $0 ($14 692) TABLE 16 Fiscal Impact For West Newport Industrial Service WEST NEWPORT INDUSTRIAL Total Housing Office Retail Industrial Lodging Marine Commercial Institutional Public - 1 67- 2 8 930 1 0 - 0 225 74 0 $0, - -21 89..- (1.070,3,131. 92.9781 GPAC Alternatives Growth gn on1 - -FI,389 910) - (18 430) (185 2711 Q (225 $0 Q 17.070 Q 313 2 8 - City of Newport Beach 20 • A NOTE ON RESIDENTIAL ASSESSED VALUES When we analyzed new home prices for the fiscal impact of Newport Coast in 2002 and 2003, single family prices averaged $815,000 and townhouses averaged about $600,000. Our analysis of existing land uses in Newport Beach showed that there was very little new multi family product, and most of the assessed values of existing apartment units have declined substantially relative to market conditions. Out fiscal analysis indicated that existing residential units generally did not pay their way for City services because the property taxes on existing assessed values were not sufficient. However, new homes such as those in Newport Coast were valued high enough to create a positive fiscal impact. For the alternative analysis in this report, the following assumptions have been made about unit values. ■ Single family: $900,000 • ■ Condominium: $650,000 ■ Mixed Use apartments: $344,000 ■ Other apartments: $275,000 The land use alternatives have been defined in terms of broad land use categories. In order to prepare the fiscal analysis, we have made additional more detailed assumptions about the unit types and values. In the .Airport area, Banning Ranch and Newport Center, 75 percent of the multi -family units would be condominiums. In other areas, the ownership share would be 50 percent. For mixed use residential, 75 percent would be condominiums ($650,000) and the other 25 percent are valued at $344,000. City of Newpod Beach 21 NEWPORTBEACH GENERAL PLAN UPDATE AIR QUALITY IMPACT MATRIX (April 19, 2005) The following table shows the percent increase or decrease in air pollutant generation under each land use alternative when compared to the City's currently adopted General Plan. Specific air pollutants modeled include reactive organic gases (ROG), nitrogen oxide (NOx), particulate matter (Plvl), and carbon monoxide (CO). PERCENT CHANGE IN AIR POLLUTANTS = COMPARED TO ADOPTED GENERAL_ PLAN Air Pollutants % chan e ROG NOx PM CO Airport Business Area Option 1-Increase in commercial and office uses 70 75 75 75 Option 2-Slight increase in housing 78 74 73 73 Option 3-Significant increase in housing 109 85 83 83 Balboa Village Option 1-Reuse of existing commercial to residential uses 1 0 0 0 Option 2-Reuse of existing commercial to residential uses 0 0 0 0 Option 3-Water-related commercial uses -9. -1 -J. -1 Option 4-Mixed-use 24 15 14 15 Option 5-Mixed-use with visitor serving accommodations 16 8 7 7 Banning Ranch Option 1-Open Space -100 -1 -100 -99 Option 2-Taylor Woodrow -29 1 -25 -27 -27 Option 3-Taylor Woodrow Reduced -62 1 -60 -61 -61 Option 4-Resort 86 $3 -84 -84 Cannery Village Option 1-Block A -Mixed use 72 48 47 47 Option 2-Block A- New residential 3550 59 43 3247 Option 3-Block B-Mixed use 455 105 80 5905 Corona Del Mar Option 1-Mixed-use with commercial and residential uses 2 1 1 1. Option 2-Intensifying commercial nodes with residential uses 4 8 -9 -9 April 19, 2005 PE12CENT CHANGE IN Alit POLLIYTANTS-- . ' fff� -COMPARED TO ADOPTED GENERAL PLAN _ Air Pollutants % chan e ROG NOx PM CO Lido Isle Option 1--No change from existing conditions 1 0 0 0 0 Option 2-Continuation of the existing General Plan 22 22 21 22 Lido Village Option 1--Mixed use with visitor accommodations 69 42 38 39 Option 2-Retail with visitor accommodations 45 44 44 43 Option 3-Mixed use 33 24 22 22 Option 4-Block &retail infill; Block C-residential 24 16 15 16 Option 5-Block El -retail infill; Block C-mixed use, retail/residential 26 22 24 24 Mariners Mile Option 1--No change from existing conditions 0 0 0 0 Option 2-Conversion of 40 % of existing uses to commercial -marine related uses 17 13 13 13 McFadden Square Option 1-Block A -overlay lodging 83 75 75 1 75 Option 2-Black B-mixed use, residential/office 38 38 41 1 38 Newport Center/Fashion Island Option 1-increase in residential, commercial, medical office, and addition of City Hall 19 16 16 16 Option 2-Increase in commercial 1 5 5 5 Option 3-Increase in residential 9 5 5 5 Old Newport Boulevard Option 1-13lock A -medical office & retail; Block B-vertical mixed use of commercial & residential 61 68 68 67 Option 2-Block A -vertical mixed use; Block B-intensification of residential uses 31 23 22 22 Option 3-Block A -vertical mixed use of commercial & residential ; Block B-affordable housing 39 29 28 28 West Newport Hwy &Adjoining Residential Option 1-Alternative 5 27 24 1 24 23 Option 2-Alternative 16 15 19 1 20 20 West Newport Industrial Option 1--No change from existing conditions 0 0 0 0 Option 2-Intensification of medical uses with additional commercial and residential uses 13 16 16 16 Option 3-Expansion of existing mobile home uses 2 A. -1 1 4 April 19, 2005 i • • Newport Beach Land Use Alternatives Environmental Impact Matrix (Revised May 2, 2005) Area Electricity Solid Waste Wastewater Water Students3 (Elementary School) Students3 (Middle School) Students3 (High School) Subarea Demand (KWh / Day) Change From Existing Demand (lbs/day) % Change From Existing Demand (gp() % Change From Existing Demand (gpd) % Change From Existing Demand (Number of Students) I % Change From Existing -Demand (Number of Students) % Change From Existing Demand (Number of Students) %Change From Existing Airport Business Area I I I I_ I I I I I Existing Use 244,457 _ 84,371 _ _ 1,412,315 _ 1,568,360 _ _ 0 0 0 ExistingGP 267,428 9% 94,169 12% 1,531,799 8% 1,701,010 8% 0 N/A 0 N/A 0 N/A Option 1 305,809 25% 107.324 27% 1,822,926 29% 2.204,471 41% 0 N/A 1 0 N/A 0 N/A Option 21 309,110 26% 113:612 SO 2,064,858 46% 1 2,363,872 51% I 384 N/A 1 47 N/A 1 68 N/A Option 32 347,341 42% 132,032 56% 2,933,583 108% 3,400,219 I 117% 1,180 N/A 118 N/A 185 N/A Balboa Village Existing Use 29,844 21,255 _ 528,940 587,599 _ _ _ 230 82 86 Existing GP 33,721 130/6 22,673 7% 558,266 6% 620,187 1 69/. 1 213 _ -7% 70 1 _ _ -15% 75 -13% Option 1 33,708 130/6 22,672 1 7% 560,034 6% 622152 6% 1 214 -7% 1 71 -13% 1 76 -12% Option 2 33,656 13% 22,630 6% 558,776 6% 620,,754 6% T 213 -7% 70 -150/ 75 -13% Option 3 32,667 9% 22,377 5% 552,414 4% 613,691 4% 213 -7% 1 70 -15% 75 -13% Option 4 39,533 32% 26,021 22% 543,267 3% 707,600 20% 209 -9% 69 -16% 73 -15% Option 5 34,666 i6% 24,058 13% 1 577,327 9% 714,347 22% 209 -9% 69 -16% I 73 1 -15% Banning Ranch I I 1_ I 1 I ExistingUse 216 _ 90 _ _ 2,982 _ 3,318 _ 2 0 0 Existing GP 59,396 N/A 29,533 N/A 684,864 N/A 761,763 N/A 481 _ _ _ __ N/A 48 _ _ _ N/A 73 _ N/A Option 1 216 N/A 90 N/A 8,482 N/A 3,374 N/A 2 N/A 0 I N/A 0 N/A Option 2 82,257 N/A 41,358 1 N/A 550,070 N/A 605,286 N/A 361 N/A 96 N/A 105 N/A Option 3 67,273 N/A 32,177 N/A 286,559 N/A 1 312,408 N/A 182 N/A 48 1 NO 53 N/A 10ption 4 184,985 N/A 1 81,778 I N/A 1 69,822 I N/A I 71,638 I N/A 16 N/A 1 1 N/A 1 2 I N/A Cannery Village I I I I Existing Land Use - TZ 1449 4,705 3,070 50,482 56,061 10 4 4 General Plan Buildout 4,956 5% 3,255 6% 54,134 7% 60,117 7% 10 _ -5% 4 _ -5% 4 -5% Option 1 7,979 70% 4,821 1 57% 54,401 8% 105,896 89% 42 323% 6 42% 8 90% Existing Land Use - TZ 1454 13,484 _ 6,607 _ 82,589 _ _ 91,711 12 5 _ 5 General Plan Buildout 14,403 7% 8,719 32% 139,466 69% 154,871 69% 27 130% 11 _ _ 126% 11 126% Option 1 16,006 19% 9,228 40% 52,124 -37% 155,835 70% 70 499% 4 -15% 8 70% Option 2 4,314 -68% 1 3,205 -51% 66,894 I -19% 1 74,298 -19% 1 15 29% 1 6 1 25% 1 6 25% Corona Del Mar I I I I I I I Existing Use 63,973 _ _ 46,913 1,179,603 1,310,263 _ 704 289 290 75,978 19% 54,823 17% 1,337,650 13% 1,485,786 13% 780 11% 322 -- --11% 322 -11 % Option 1 77,198 21% 55,250 1 18% 1,367,525 16% 1,519,050 16% 811 15% 324 12% 326 13% 0ption2 70,960 11% I 52,328 12% 1 1,346,055 14% 1,495,275 14/ I 828 18% 325 12% 328 I 13% Lido Isle I I I LI Existin Use 14,197 _ _ _ _ 11,113 336,688 _ 374,007 206 84 84 Existin GP 18,005 27% 14,133 27% 428,078 27% 475,524 27% 264 _ 29% 108 29% 109 29% Option 1 14,197 0% 11,113 0% 336,666 0% 374,007 0% 206 0% 84 0% 84 0% Option 2 18,005 27% 14,133 I 27% 1 428,078 27% 475,524 27% I 264 29% I 108 I 29% 109 29% Lido Village I I I I I I I I Existing Land Use - TAZ 1452 8,390 _ _ 4,358 _ 48,340 53,661 __ 1 _ 0 0 {_ General Plan Buildout 8,262 -2% 4,389 1% 44,146 -9% 49,002 -9% 1 N/A 0 _ WA 0 N/A Option 1 13,644 63% 6,872 58% 120,556 149% 134,060 150% 42 N/A 2 N/A 5 N/A Option 2 10,258 22% 5,587 28% 69,888 45% 77,675 45% 0 N/A 0 N/A 0 WA O lion 3 11,910 42% 6,773 55% 103,896 115% 115,502 115% 53 N/A 3 1 N/A 6 N/A ExistingLand Use -TAZ1453 6,800 _ 3,448 34,660 38,473 0 0 General Plan Buildout 9,325 37% 4,236 23% 46,996 36% 52,166 36% 0 N/A 0 N/A 0 _ N/A O lion 4 7,087 4% 4,093 19% 51,456 48% 57,185 I 49% 20 N/A 1 N/A Option 5 7,287 7% 4,475 30% 44,794 29% 49,756 I 29% 10 N/A 1 WA 1 N/A CV me M6 SaWn9ak mylSeNngs\iemp°rerylnlemet R.IOWUIZ mrtmme°W Im Mabv.rJs Page 1 05/02/2005 C • • Area Electricity Solid Waste Wastewater ' Water Students3 (Elementary School) Students3 (Middle School) Students3 (High School) Subarea - Demand (KW h / Day) 01 Change From Existing Demand (lbs/day) % Change From Existing Demand (gpd) % Change From Existing Demand (gpd) % Change From Existing Demand (Number of Students) % Change From Existing Demand (Number of Students) % Change From Existing Demand (Number of Students) % Change From Ex sting Mariner's Mile Existin Use 51,463 15,060 _ 571,878 1 635,008 _ 114 35 37 Existin GP 64,488 25% 17,350 15% 651,372 14% 1 723,265 14% 116 _ 1% 1 35 _ 2% 37 __ 2% O tion 1 76,824 49% 25,088 67% 680,052 19% 1 898,021 41% 233 104% 42 22% 51 40% Option 2 76,824 49% 25,088 67% 680,052 19% 898,021 41% 233 104% 42 22% 51 40% McFadden Square Existing Land Use - TAZ 1450 5,144 2,815 4,087 9,170 3,602 3,909 4,497 _ 45,273 _ 50,284 6 2 2 General Plan Buildout 6,285 22% 45% 82,537 82% 1 91,673 _ 82 /0 16 1 _ _ _ _ _ 153 /0 6 _ ° 163 /0 6 ° 161/ O tion 1 13,611 165% 226% 112,310 148% 1 155,782 210% 39 496% 8 217% 9 1 268% 6cistm Land Use - TAZ 1451 4,926 _ _ 67,739 75,244 17 6 7 General Plan Buildout 5,462 11% 9% 71,805 6% 79,759 6% 17 2% 7 2% 7 _ 2% (Option 2 9,336 1 90% 25% 96,514 42% - 107,266 43% 1 17 2% 7 2% 7 I 2% Newport Center / Fashion Island I I I I I I I I I I I ExistingUse 200,069 79,715 _ 1,375,645 1,527,694 84 ExistingGP 215,855 8% 202,627 154% 1,480,683 8% 1,647,232 8% 84 0% 19 0% 22 0% Option 1 255,446 28% 104,647 31% 1,895,538 38% 12,105,682 38% 159 90% 134 595% 134 516% Option 2 244,075 22% 95,097 19% 1,653,881 20% 1,836,677 20% 77 -8% 52 169 0 52 139% Option3 234,752 17% 96,655 21°/0 1,738,225 26% 1,930,912 26% 172 106% 147 664% 147 578% Old Newport Boulevard II I_ ExistingUse 11§6 7,110 _ _ _ 176,540 196,091 1 298,146 392,424 365,547 1 372,131 79 32 1 32 Existing GP 16,874 48% 1 10,520 49% 268,414 1 52% 52% 88 _ _ 1 12% 1 36 _ 11% I 36 11% Option 1 25,875 127% 15,146 115% 353,202 1 100% 100% 136 73% 38 18% 41 1 27% Option 2 18,474 62% 12,889 83% 328,991 86% 86% 136 73% 41 27% 43 34% Option 3 19,803 740 13,943 1 98% 334,859 1 90% 90% 1 157 98% 39 22% 43 34% West Newport Highway & Adjoining Residential I I II Existing Use 12,931 1 8,640 _ 253,706 281,964 285,460 243,545 247,725 226,125 226,125 237,282 327,801 243,462 242,202 247,4811 _ _ 161 49 52 Existing GP 13,489 0% 1 9,017 0% 256,855 0% 0% 161 _ 00' 49 _ 0% 52 0% Block A- Option 1 10,737 -20% 7,089 -21% 219,162 -15% -15% 150 -7% 48 -3% 50 -4% Block A -Option 2 11,008 -18% 7,202 -20% 20 19 -13% -13% 153 -5% 48 -301 50 I -3% Block A - Option 3 9,604 -29% 6,618 -27% 1 203,506 -21% -21% 137 -14% 47 -5% 49 -7% Block A- Option 4 13,317 -1% 7,515 -17% 203,506 -21% -21% 137 -14% 47 -5% 49 -7% Block B 10,205 -240/ 6,932 -23% 213,540 -17% -17% 145 -10% 48 Block C - Option 1 18,177 351/ 8,846 -2% 220,960 -14% 15% 197 22% 50 2% 55 7% Block C - Option 2 10,731 -20% 7,0, -21% 219,087 -15% -15% 150 -7% 48 -3% - -4% Block C - Option 3 12,283 -9% 6,618 -27% 217,990 -15% -15% 137 -14% 47 -5% 49 -7% I Block C - Option 4 11,401 -15% 1 7,087 -21% 222,708 I -13% -13% 1 150 1 -7% 48 I -3% 50 -40% West Newport Industrial I I II I I I I I Existing Use 87,490 59,324 712,348 _ 1 792,419 446 36 60 Existing GP 125,591 44% 82,266 39% 854,770 20% 950,811 20% 474 _ 6% 36 2% 63 4% Option 1 123,525 41% 81,692 38% 843,290 18% 938,068 18% 474 1 6% 36 2% 1 63 40% Option 2 134,868 54°/n 128,845 117 0 980,11 38% 1,089.984 38% 503 13% 38 7% 66 10% Option 3 104,905 20% 67,548 14% 926,393 30% 1,030,333 30% 563 26% 42 17% 73 22% Sources: 1. 800% of the additional 2,104 multi -family residential units is assumed to be high-rise residential. A different student generation rate of 0.068 students/unit is used to calculate total demand. 2. 80% of the additional 6,633 multi -family residential units is assumed to be high-rise residential. A different student generation rate of 0.068 students/unit is used to calculate total demand. 3. Newport -Mesa United School District, persnal communication, April 2005. C\p menm atM&Mn9n myAocal S dng XTemp°mry Intemet FiiesLLlW.eEm memal Impact Ma=a Page 2 05/02/2005 Lektorich, Debbie From: Philip Arst [philiparst@cox.net] Sent: Monday, May 02, 2005 11:03 AM To: Wood, Sharon; Bromberg, Steven; Nancy Gardner; Phillip Lugar; Lektorich, Debbie .Cc: Allan Beek Subject: Comments on Fiscal Analysis of General Plan Alternatives LJ Fiscal Impact =omments 5-2.doc.. The enclosed letter is herewith submitted to the GPUC and GPAC Committees. Please distribute to them at today's meeting. It Is demonstrated that the Fiscal Analysis of General Plan Alternatives has some severe problems that have resulted in an overly optimistic portrayal of the General Plan Alternatives financials. For example, the impacts of inflationary increases in the cost of city services during the life of the proposed General Plan Alternatives vs. the Prop 13 restrictions on property tax revenues is not included. Additionally, the required inclusion of 20% affordable housing at an average unit cost of $290,000 will further impact residential DU financials. There are also significant unanswered questions about the revenue projections of commercial properties based upon the year 2025 span of the General Plan Update and the use of year 2005 expense levels. Many of these issues were previously worked out with a City Council Finance Committee and some subsequent city studies have correctly taken the Prop 13/Inflation issue into account. Philip Arst 2601 Lighthouse Lane Corona del Mar, CA 92625 (949) 721-1272 • Mayor Steve Bromberg Chairman GPUC May 2, 2005 Ref; Fiscal Analysis of the General Plan Alternatives 4/27/05 by Advanced Development Economics Executive Summary The referenced fiscal analysis seriously understates the negative fiscal impacts of residential and commercial properties by not including the factors of annual inflation of city service costs (4.25% CPI1) vs. the Proposition 13 restrictions on city property tax revenues (20/o/year.) Over time this dichotomy puts all but the highest priced residential housing into a negative fiscal impact status. Additionally the requirement that 20% of new residential housing developments must be affordable lowers the average property tax returns from even this high-priced housing but not the costs. The net result is an overly optimistic fiscal projection, particularly for residential housing. The projected revenues from commercial properties are unexplained. Are market factors included in the projections or are they simply based upon full occupancy in year 2025? There are a large number of unused commercially designated land uses in 2005 because the market is not there and Newport Beach, particularly Mariners Mile, is inconvenient for shopper automobile access. Does the study project full occupancy of a greater amount of commercial land uses in 2025 despite considerably greater traffic congestion? As these projections for 2025 are based upon year 2005 city expenses the above optimism in property revenues could rise to extreme levels if not documented and explained. The Fiscal Analysis was not issued in time to provide for a meaningful review and getting these questions answered. Overall, the entire Fiscal Analysis needs to be redone to provide a minimum 30- year picture of revenues and expenses and more realistic market projections in order to define the apparent substantial negative fiscal impact of the proposed General Plan Alternatives. The following comments and questions apply to the referenced Fiscal Analysis: 1, The Fiscal Analysis' costs are based on only a one-year period for the year 2005. This does not provide a true picture of the fiscal situation in the city because of the disparity in annual increases of city revenues based upon the property tax rate (maximum of 2% per year) and the annual increases in city costs based upon the CPI (4.25% per year.) As residential properties turn over at an estimated average of ten6 years and office and industrial properties for a much longer estimated average of 20 years, the financial results will be considerably lower than those shown by the referenced study. For example: Costs of services by the city for residential properties will increase approximately 52% over the average holding period of ten years vs. a 22% increase in property tax revenues. Costs of service by the city for commercial, office and industrial properties will increase approximately 130%•over the estimated average holding period of twenty years vs. a 48% increase in property tax revenues. 2. There is no data to support the contention in the section "A Note on Residential Assessed Values" that "new homes (based up the listed assumptions ranging from $275,000 to $900,000) were valued high enough to create a positive fiscal impact." While there is no recent data on the costs of service on different classes of housing, an old • report 3 contained in a previous City of Irvine General Plan demonstrated that the costs of city services per resident were generally the same except that the negative fiscal impact of each multi -family DU was 40% less than that for Rural/Estate type SF housing. However, since there are many more DU's in a multifamily development, its negative fiscal impact is considerably greater that an equivalent use of city land area by SF Estate type DU's. The referenced Fiscal Analysis needs to be updated to include this divergence over time. It should include a calculation of the sales price of a dwelling unit needed to produce a positive fiscal . impact over an eleven year average holding period to provide a true picture of the costs of supporting the different classes of dwelling units. 3. An additional factor that will further produce a substantial negative fiscal impact from residential housing is the city's obligation to build approximately 1500 affordable housing, units plus the requirement that 20% of all additional housing units built under the General Plan Update must be affordable. The average cost of these affordable units is approximately $290,0005. Therefore a SF DU projected at a $900,000 selling price will actually average $778,000 property tax valuation when its affordable housing component is included. These will certainly cause a substantial negative fiscal impact that will further add to the net negative fiscal impact of residential housing units as a whole. 4. There is no proven market demand to demonstrate that the substantial revenues forecast for retail, lodging and service commercial will actually occur. Currently the situation in Newport Beach is that the hotel occupancy rate is reportedly in the 60-70% range and that many current commercial land uses have not been developed due to a lack of market demand. Given that Newport Beach does not have good freeway access as compared to South Coast Plaza and the already heavily congested Pacific Coast Highway area will be swamped with the proposed buildup of mixed uses, it is highly unlikely that a large number of people will drive into Newportto support the projected commercial use options. These rosy projections need to be explained or scaled back considerably. 5. The financial potentials for proposed retail and lodging land uses are for the year 2025 that I understand is the time period for projections for the General Plan Update. These projections should be shown instead as a rate of buildup in order for the city to balance negative fiscal impact development such as the mixed use and multi -family residential uses projected. As is stated in item 3 above, it is highly unlikely that all commercial uses will be filled to the 100% level and the projections in the Fiscal Analysis need explanation in order to ascertain the true fiscal results of these developments. 6. The Mariner's Mile forecasts in Table 11 for Option 2 shows a substantial positive impact due to added Marine uses not reflected in the current GP or other options. Moorings and boat sales for additional boats do not mean that they are necessarily sold in Newport Beach. Also most large boats are registered in Mexico to avoid sales taxes. If we can't fill out our current commercial entitlements now that leads to the conclusion that the market will not support the grandiose projections for 2025 in the most congested section of the city. Thank you for your consideration of these comments. Sincerely, CC: GPUC Philip L. Arst GPAC 1. U.S. Bureau of Labor Statistics 50 year average for LA/Orange/Riverside Counties 2. Traffic Model December 2003 prepared by Urban Crossroads 3. City of Irvine General Plan contained in Report "Economic Analysis of Office Buildings" by Philip L. Arst (www.newnortgreenliaht.com, Project Study Data section, #3 4. Newport Beach General Plan — Housing Element 5. Inclusionary Housing In -Lieu Fee Study dated September 22, 2004 by Economic & Planning Systems 6. Consultant Stan Hoffman City Finance Committee approved projections for Newport Coast annexation 1/14/98 It GENERAL PLAN ADVISORY COMMITTEE • Monday, May 2, 2005 Roger Alford Ronald Baers Patrick Bartolic Phillip Bettencourt Carol Boice Elizabeth Bonn Gus Chabre John Corrough Lila Crespin Laura Dietz Grace Dove Nancy Gardner Gordon Glass Louise Greeley Ledge Hale Bob Hendrickson Tom Hyans Mike Ishikawa Kim Jansma Mike Johnson Bill Kelly Donald Krotee Lucille Kuehn Philip Lugar William Lusk Barbara Lyon I� U 1 0 0 Marie Marston Jim Navai Catherine O'Hara Charles Remley Larry Root John Saunders Hall Seely Jan Vandersloot Tom Webber Ron Yeo Raymond Zartler 2 • GENERAL PLAN AVISORY COMMITTEE Monday, May 2, 2005 PUBLIC SIGN -IN NAME ADDRESS/PHONE r u E-MAIL ADDRESS 1 f v �" ���-GC/�✓.J ! w7✓ �a�-%rY��.(B7 �3 (j�%�iJ�e�$�'K ij LLAN QEcK ll--6N Milli ,�, 11m01 {AAV-eA 91- v\-e-49ggV700 L v C"Jk • GENERAL PLAN ANISORY COMMITTEE Monday, May 2, 2005 PUBLIC SIGN -IN NAME ADDRESS/PHONE E-MAIL ADDRESS CITY OF NEWPORT BEACH GENERAL PLAN ADVISORY COMMITTEE Minutes of the General Plan Advisory Committee Meeting held on Monday, May 2, 2005, at the OASIS Senior Center. Members Present: Roger Alford Patrick Bartolic Phillip Bettencourt Carol Boice Elizabeth Bonn Gus Chabre John Corrough Lila Crespin Laura Dietz Grace Dove Members Absent: Nancy Gardner Gordon Glass Louise Greeley Ledge Hale Bob Hendrickson Mike Ishikawa Kim Jansma Mike Johnson Donald Krotee Lucille Kuehn Phillip Lugar Marie Marston Jim Navai Charles Remley Larry Root John Saunders Hall Seely Jan Vandersloot Tom Webber Raymond Zartler Ronald Baers William Lusk Ron Yeo Tom Hyans (sick leave) Barbara Lyon Bill Kelly Catherine O'Hara (sick leave) Staff Present: Sharon Wood, Assistant City Manager Debbie Lektorich, Executive Assistant Woodie Tescher, EIP Consultant Doug Svensson, Applied Development Economics Members of the Public Present: Phil Arst Allan Beek I. Call to Order Kelly Hillman Carol Hoffman Nancy Gardner called the meeting to order. E Dolly Shaw • II. Fiscal Analysis of the General Plan Alternatives Doug Svensson reviewed the Fiscal Analysis report provided with the agenda packets. Gordon Glass asked if the study included the Council revisions adding residential into the airport area because in previous charts the residential shows as a fiscal negative. Mr. Svensson indicated that the additional units were included and added that because the residential would be'mixed with commercial uses, it becomes a fiscal positive. Charles Remley asked about Table 12 and pointed out that the total doesn't equal the parts. Mr. Svensson explained that while manually transferring the numbers, some of the lodging didn't get into the table. Lucille Kuehn asked about the possibility of the dissolution of Prop. 13 in the future and if that was taken into consideration. Mr. Svensson said it was not accounted for. John Saunders asked if it would be appropriate to discuss how the City spends money and the requirement of 20% affordable housing. Sharon Wood pointed out that the 20% for affordable housing is included in the housing element of the general plan and we would be looking at all the elements. Phillip Bettencourt commented on Banning Ranch and indicated he understood that the cost for acquisition is not included in the study because this is a service analysis, however there isn't any debt service expense for park development either. He asked if • that would be seen as part of the acquisition costs. Mr. Svensson indicated it would not be included and he didn't have an estimate at this time. Mr. Bettencourt also commented that the economic viability for the resort option at Banning Ranch is worth taking a closer look at because the location is much different than the Montage resort in Laguna Beach, which is what it is being compared to during discussions. Ms. Kuehn asked about the level of income required for affordable housing . Ms. Wood indicated there are three income levels: moderate income is 120% of the County median, low income is 80% of the median and very low income is 50% of the median. Patrick Bartolic asked if the numbers in Figure 2 for residential uses were driven by actual costs or if a percentage was used to calculate the result. Mr. Swensson explained that the analysis of existing land uses were taken from the current City budget and actual service demands. Mr. Glass asked how we would balance the results from the visioning process where the residents indicated their least popular uses were tourism/lodging and the fact that these type uses are where the money is fiscally. Ms. Wood indicated that would happen when developing the preferred land use plan; it may be found that part of the City would be more acceptable for these uses than others. Laura Dietz asked what element of municipal service costs are going to increase, stay • the same or decrease in the next few years. Ms. Wood indicated that would get into the inflation question and we are not addressing inflation during this analysis. 061 • Gus Chabre asked how the increases in property values were accounted for. Mr. Svensson indicated that once the preferred land use plan was approved they would go back to the model and try to project the increases; that is the reason some of the residential is showing as a positive fiscal benefit. Jan Vandersloot thought the $800,000 for single family units is probably higher and the negative impact of $7.7 million is too low. Mr. Svensson explained that the minus $7.7 million is the actual deficit on existing assessed value. When houses are sold they get a lot more than the assessor is charging today. The figures also include the 20% affordable units; they were trying to capture a very broad range of product in the tables. Mr. Glass pointed out that residential real estate is cyclical and questioned how much longer can the current trends continue. Mr. Svensson indicated he could not predict, however they are trying for a snap shot of development and stay conservative when trying to look at buildout. Mike Johnson asked if the City Hall project was considered in this report. Mr. Svensson indicated it was not included. Jim Navai asked about long term liability issues/costs facing the City were considered. Ms. Wood indicated that the City's budget includes costs for insurance, risk management and liability. Mr. Bartolic asked what are the actual gross revenues generated by residential and for the biggest hospitality/lodging generator. Mr. Swensson said the estimate for residential uses generated $45 million or about 45% in revenue; however that use generates about $51 million in costs. He added that total lodging is approximately $9 million in revenue and costs are much less. Don Krotee asked if marine uses provided a positive or negative income. Mr. Swensson thought they might have a neutral impact. Carol Hoffman, Newport Beach, asked if any differentiation had been made between gated and non -gated communities with respect to costs. Mr. Svensson indicated the analysis did take into account private streets and neighborhoods and they made adjustments to various costs. III. Discussion of Future Agenda Items Mr. Tescher provided replacement charts from the Environmental Summary last week. Mr. Glass asked about adding the large amount of residential units in the airport area without services. Ms. Gardner indicated the Airport Area Subcommittee had discussed adding a market and other services to that area along with the residential. Mr. Tescher added that when the group makes land use recommendations, you can add that residential is contingent upon adding the supporting services. 3 Mr. Bartolic asked about data for the Westcliff/Dover Shores area. Ms. Wood indicated that area was not one of the special study areas. Mr. Krotee asked how staff would deal with CEQA when shoulder season data was used instead of worst case. Mr. Tescher indicated that as long as supporting data was presented there is no problem with it. Ms. Wood added that shoulder season data has always been used. Ms. Kuehn asked for a definition of shoulder season. Ms. Wood stated it was spring and fall. Mike Johnson asked about new legislation regarding affordable housing. Ms. Wood indicated the latest requires more density bonuses for affordable/workforce housing developments. Mr. Bartolic asked if water use would become a problem with the larger buildout ortinns. Mr. Tescher indicated it is a biq issue here and statewide. M pi P N 0