1. business and industrial

STAFF REPORT
DATE:
March 17, 2015
TO:
City Council
FROM:
Mike Webb, Director of Community Development and Sustainability
Katherine Hess, Community Development Administrator
SUBJECT:
Fiscal and Economic Analysis for Innovation Center Applications
Recommendation
Staff recommends that the City Council
1. Approve the attached Budget Adjustment appropriating $160,000 from planning
application revenues for economic and fiscal analysis of the two Innovation Center
applications; and
2. Approve the attached resolution authorizing the City Manager to enter into a contract
with Economic and Planning Systems for the studies.
Council Goals
• Drive Innovation and Economic Vitality
This analysis is intended to further application consistency with the Innovation Center Guiding
Principles and goal to focus on creation of research, technology and advanced manufacturing
jobs, and revenue generating uses.
Fiscal Impact
No General Fund impact. Cost of the economic and fiscal analysis is $160,000, which is
anticipated to be split evenly between the two Innovation Center applications (Mace Ranch
Innovation Center and Davis Innovation Center).
Background
In 2014, the City received planning applications for two proposed innovation centers. Planning,
technical and public review are underway. The Mace Ranch Innovation Center is proposed on
approximately 200 acres east of Mace Boulevard. The Davis Innovation Center is proposed on
approximately 200 acres north of Sutter-Davis Hospital. The Draft Environmental Impact Report
for each application is anticipated for public release in June.
The City has a contract project manager for the innovation center applications, and is
supplementing the efforts of planning and engineering staff with additional contract services. For
the innovation center applications, costs of all contract services are billed to the applicants.
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Budget Adjustment
The cost of the fiscal and economic analysis is anticipated to cost $160,000. This would be split
between the two innovation center applications. The budget adjustment provides an increase in
current planning contract services covered by an increase in applicant deposits.
Consultant Contract
In January, the City issued a Request for Proposals for economic and fiscal analysis for the two
innovation center applications. The RFP identified a series of analyses that would be requested
for each project, to inform decisionmakers and the public of the fiscal and economic impacts of
the proposals. The draft RFP was reviewed by the innovation center applicants and a
subcommittee of the Finance and Budget Commission. Similar work is being conducted for the
Nishi Gateway effort under contract to A. Plescia & Co.
The RFP was sent to eight consulting firms with experience in financial analysis. Economic and
Planning Systems, Inc. (EPS) was the only firm that responded. Other firms stated that they did
not propose due to workload issues, difficulty in addressing the full range of the requested
components of the scope of work, or concerns over potential conflicts of interest through
contracts with other jurisdictions or the applicants.
Economics and Planning Systems is a highly qualified firm with experience in the types of
analyses requested for this effort. The City of Davis has successfully contracted with EPS for
assistance with Redevelopment Agency programs and the firm is very familiar with issues
surrounding local development finance. EPS is currently working with the City on Rail
Relocation. Staff has worked with EPS to refine the scope of work to meet the needs for project
analysis and project schedule.
EPS will be providing the following services for the two proposals:
- Development buildout scenarios and anticipated mix of uses, industry, and job type,
under high and low assumptions.
- Evaluation of land economic profile for each proposal, for purpose of understanding the
project’s ability to cover infrastructure costs and other contributions desired by the City;
and to assist with the Yolo County tax share agreement.
- Community economic impact analysis, to evaluate the benefit of the jobs and other
business spending to the Davis economy. The evaluation will also be conducted at the
Countywide level.
- Fiscal analysis, to evaluate project impacts on the City’s General Fund.
- Meetings and advisory services, including check-ins with the City Council and Finance
and Budget Commission. Staff anticipates that EPS may also provide on-call advisory
services during annexation/tax share discussions with Yolo County.
Council should be aware that EPS has had a working relationship with Buzz Oates Enterprises,
and is currently under contract with them on Metro Air Park. The last meeting on that effort was
late 2014. Future meetings have been anticipated, but nothing is scheduled. Other consultants did
not submit proposals to the City because of relationships with other applicants or Yolo County.
While no legal conflict of interest exists, staff does recognize that even perception of conflict can
be detrimental. In response, staff anticipates arranging for “peer review” of the work products
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prior to release. The peer review is anticipated to include a brief report, that would be public, as
to the peer reviewers findings and any recommended adjustments.
Time is of the essence for this contract, to allow the City Council to take action on the
applications by the end of 2015. To ensure that EPS is able to complete the first phase of its
analyses prior to release of the Draft EIR, staff has issued a $10,000 purchase order to begin the
effort. The remainder of the work ($150,000) is under the scope of work recommended for
approval at this meeting.
Next Steps
The City Council has directed staff to return with updates on the innovation center and Nishi
planning and environmental review processes. The next update is scheduled for April 21, 2015.
Attachments
1. Budget Adjustment
2. Resolution approving contract with Economic Planning Systems
a. Proposed Scope of Work for Phases I & II
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RESOLUTION NO. 15-___, SERIES 2015
RESOLUTION APPROVING CONTRACT WITH ECONOMIC & PLANNING SYSTEMS
FOR ECONOMIC AND FISCAL ANALYSIS
WHEREAS, the City is processing applications for land-use entitlements for two innovation
centers; and
WHEREAS, economic and fiscal analysis of the proposal will enhance City Council and
community ability to evaluate the proposals and their impacts on Davis; and
WHEREAS, costs of preparing the economic and fiscal analysis will be borne by the planning
project applicants; and
WHEREAS, the Department of Community Development and Sustainability issued a Request
for Qualifications to select consultants for economic and fiscal analysis; and
WHEREAS, Economic & Planning Systems (EPS) is uniquely positioned to perform economic
and fiscal analysis for the innovation center applications. EPS and its principals have prepared
analyses for other projects in the city of Davis and bring the economic and land use planning
experience necessary to complement the consultant team for these applications.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Davis that it hereby
approves a consultant agreement with Economic & Planning Systems, not to exceed $150,000,
for the scope of work attached to this Resolution.
AND BE IT FURTHER RESOLVED that the City Manager is directed and authorized to
execute the agreement, including any minor technical or clarifying changes as necessary.
PASSED AND ADOPTED by the City Council of the City of Davis on this 17th day of March
2015 by the following vote:
AYES:
NOES:
ABSTAIN:
Daniel M. Wolk
Mayor
ATTEST:
Zoe S. Mirabile, CMC
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Proposal
Economic and Fiscal Analysis: Phase I
Innovation Park Development
Assumptions, Land Economics, and
Development Scenarios
Prepared for:
City of Davis
Prepared by:
Economic & Planning Systems, Inc. (EPS)
February 16, 2015
EPS #152006
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Table of Contents
INTRODUCTION ................................................................................................................................................1
1.
QUALIFICATIONS AND EXPERIENCE..........................................................................................................1
2.
EPS PERSONNEL QUALIFICATIONS AND EXPERIENCE ..............................................................................5
3.
PREVIOUS PROJECT EXPERIENCE ...........................................................................................................7
4.
CONFLICT OF INTEREST STATEMENT .....................................................................................................11
5.
EXCEPTIONS TO CONTRACT ..................................................................................................................13
6.
SCOPE OF WORK .................................................................................................................................14
7.
2015 HOURLY STAFF BILLING RATES ....................................................................................................17
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Introduction
Economic & Planning Systems, Inc. (EPS) is pleased to present this proposal to provide the initial phase
of the economic and fiscal analysis related to the proposed Davis Innovation Centers. This “Phase I”
effort has been excerpted as a portion of a larger and more comprehensive economic analysis,
representing an initial effort to prepare key assumptions, including land economics, select fiscal
considerations, and preliminary industry analysis needed to prepare Innovation Center development
scenarios before the release of the Draft Environmental Impact Report (EIR) scheduled for June 1, 2015.
EPS recognizes the tremendous benefits the proposed Innovation Centers can create for the City of
Davis (City) and the entire region. The project approach will focus on addressing the required elements
of the Request for Proposals (RFP) and the City’s objectives of leveraging the University of California
(UC) Davis campus and other unique community attributes to advance local economic prosperity and job
creation.
The Innovation Centers have the potential to create benefits that generate economic value to the City and
UC Davis alike. The proposed projects could support the goal of strengthening academic-industry
partnerships in Davis and throughout the region, in support of the Next Economy initiative. Moreover, the
parks may provide much needed jobs-housing balance and fiscal resources, allowing Davis to maintain
its reputation as one of the best quality-of-life experiences attained in the region. The citizenry in Davis
must understand the economic and community benefit contributions offered by these opportunities, which
stand to provide a variety of jobs in multiple market segments. The proposed Innovation Centers have
great potential to move forward simultaneously, if phased and developed in concert with evolving market
forces.
1.
Qualifications and Experience
EPS is uniquely qualified to estimate the range of economic impacts that could result from the proposed
innovation centers:
EPS has more than 30 years of experience, seamlessly integrating technical skills around urban
revitalization and development, regional economics and economic development, and economic
impact analysis.
EPS has worked directly on projects in Davis, Woodland, West Sacramento, Yolo County, and
Solano County and has amassed significant relevant experience across Northern California, and
specifically the Sacramento Region, on projects related to defining economic development
opportunities and estimating fiscal and economic impacts.
EPS has been instrumental in evaluating the economic contributions of the UC and other systems.
EPS also has substantial experience working between various campuses and private-sector
stakeholders to respond to economic development and real estate opportunities and has contributed
to sustainable-job growth in key regional industries throughout the State of California (State) and the
nation as a result.
Senior staff members assigned to this project live in Davis and understand the local context,
stakeholders, and dynamics at play and are committed to delivering impactful work.
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Economic & Planning Systems, Inc.
Proposal February 16, 2015
About EPS
The Firm: EPS is a land economics consulting firm experienced in the full spectrum of services related to
real estate development, the financing of public infrastructure and government services, land use and
conservation planning, and government organization.
Guiding Principle: EPS was founded on the principle that real estate development and land use-related
public policy should be built on realistic assessment of market forces and economic trends, feasible
implementation measures, and recognition of public policy objectives, including provisions for required
public facilities and services.
Areas of Expertise: Real Estate Market and Feasibility Analysis; Public Finance; Economic
Development; Fiscal and Economic Impact Analysis; Reuse, Revitalization, and Redevelopment; Real
Estate Transactions and Negotiations; Regional Economics and Industry Analysis; Land Use Planning
and Growth Management; Open Space and Resource Conservation; Government Organization;
Transportation Planning and Analysis; and Asset Valuation and Repositioning.
Clients Served: Since 1983, EPS has provided consulting services to hundreds of public- and privatesector clients in California and throughout the United States. Clients include cities, counties, educational
institutions, multijurisdictional authorities, property owners, developers, investors, financial institutions, and
land use attorneys.
Staff Capabilities: EPS’s professional staff includes specialists in market analysis, public finance, real
estate development, economic development, land use and transportation planning, government
organization, and computer applications. EPS excels in preparing concise analyses that disclose risks
and impacts, support decision making, and provide solutions to real estate development and land userelated problems.
EPS Locations: Sacramento (primary office for this assignment), Oakland, and Los Angeles, California;
and Denver, Colorado.
EPS Web Site: www.epsys.com.
Key Practice Areas Related to the Davis Innovation Centers
EPS participates in a wide range of site, area, and regional-level development and revitalization efforts,
including evaluating market potentials and development feasibility, identifying opportunities and catalyst
sites, and providing public-private implementation plans. EPS has conducted numerous projects for
cities, redevelopment agencies, and developers as part of multidisciplinary teams or independently for
more focused economic analysis in efforts designed to promote economic development in a variety of
contexts. EPS’s project experience has been organized into the following topic areas, spanning a range
of development and redevelopment activities:
Economic and Market Analysis: The type, amount, and location of real estate development is
linked integrally to underlying economic and market forces. EPS takes a holistic approach to real
estate market analysis, taking into account product-specific performance measures, changes in
demographic and employment, local and regional economic trends, consumer preferences, and
business cycle considerations. The success of the Innovation Centers in Davis relies on a
fundamental regional understanding of market opportunity and constraints, which EPS is uniquely
positioned to provide.
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Economic & Planning Systems, Inc.
Proposal February 16, 2015
Project Financial Feasibility: In addition to land constraints, Davis has suffered from a lack of
appropriate vertical product to offer growing companies. EPS evaluates the financial feasibility of real
estate development for the full spectrum of building types, including mixed-use, retail, office, housing,
lodging, and entertainment projects. Pro forma cash flow models are used to test feasibility under a
range of project alternatives, financing, and partnership options; disposition strategies; and measures
of financial return. This capability will be critical at the outset of the project in determining overall
feasibility profiles and informing key assumptions for economic impact and fiscal impact analysis.
Economic Development: EPS provides a full range of economic development and regional
economic knowledge and skills, with expertise in labor force analysis, industry cluster formation,
input/output analysis, and policy formulation. This practice is interwoven with EPS’s overall urban
economics practice, providing a comprehensive approach toward community development, growth,
and diversification. The recent addition of Ryan Sharp, formerly leading the Sacramento Area
Commerce and Trade Organization (SACTO)’s Center for Strategic Economic Research (CSER),
bolsters EPS’s capabilities and market reach in this area, building on numerous successful past
collaborations.
Public-Private Financing: EPS helps to determine required levels of public support to attract
developer interest or to complete the financing program for a proposed project. These services
include identifying and forecasting potential funding sources; allocating capital costs among
participating entities and public finance negotiations, including drafting development agreements; and
formulating assessment rates, special tax formulas, and fee ordinances. Because EPS has a
balanced portfolio of public- and private-sector clients, including some of the largest and most
influential developers and university systems in the nation, EPS brings a unique and informed
perspective to how public and private resources may be effectively deployed in pursuit of sustainable
economic development in Davis.
Fiscal and Economic Impact Analysis: EPS evaluates the fiscal and economic impact of land use
projects as a basis for understanding and comparing the implications of various public policy
decisions. EPS outputs generally focus on quantifiable variables such as the costs and revenues to
local jurisdictions, jobs and output, and the likely change in sales on both subject land uses and
nearby businesses. As highlighted in this proposal, EPS has developed integrated fiscal, economic
impact, and capital funding analyses for some of the largest projects in the region, including the
Sacramento Railyards.
Sustainable Community Development: EPS collaborates with urban designers and planners in
formulating effective revitalization strategies for redevelopment, infill development, and transitoriented development sites. The revitalization of urban areas requires the strategic combination of
marketing and business development, the amelioration of physical constraints (e.g., blight) to create a
vital mix of commercial, civic, and residential uses, and determination of appropriate levels of agency
financial participation. In the case of Davis, there are multiple opportunities for effectively segmenting
the market to ensure projects are characterized and phased in such a manner as to ensure the
downtown is protected and bolstered, jobs and housing are better balanced, and fiscal revenues are
available to fund key City services in support of continued economic innovation and the overall quality
of life in Davis.
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Economic & Planning Systems, Inc.
Proposal February 16, 2015
Innovation Center Economic and Fiscal Analysis: Overview of Key Experience
EPS has a long and distinguished track record in the evaluation of innovation park market potential,
economic impact, and implementation strategies. A selected group of projects underscoring this track
record is briefly provided below, with more detailed discussion of analogous projects provided later in this
proposal. All projects were conducted with the involvement of the EPS team members cited in this
proposal:
NASA Research Park—University Development Area (Mountain View/Sunnyvale, California):
Financial feasibility and implementation strategies for self-sustaining and environmentally progressive
reuse of federally owned NASA Ames/Moffett Field property. Involved negotiations between NASA
and multiple universities and colleges based on multidisciplinary analysis.
Lawrence Livermore Open Campus Site Master Planning and Development (Livermore,
California): Prepared a market analysis and development feasibility study for Livermore Valley Open
Campus (LVOC) in support of a Master Plan for a Science & Technology Park, located “outside the
fence,” in conjunction with Lawrence Livermore National Laboratory (LLNL) and Sandia National
Laboratories (SNL). The project goal is to encourage collaborative research & development (R&D)
with academic and private-industry partners.
Nishi Concept Development (Davis, California): Multi-session internal charrette with Perkins +
Will, the City, UC Davis, Yolo County, and private-sector developer-owners of the 45-acre Nishi site.
EPS provided perspective on land use mix and intensity, key amenities including amount and
positioning of supporting retail and other uses, potential phasing concepts, and identification of
potential feasibility and market challenges.
Davis Business Park Initial Analysis (conducted by Ryan Sharp for CSER for the City,
California): Conducted analysis of the value of economic development and potential employment
growth, providing an overview of the various aspects and benefits of economic development with
specific discussion and quantitative analysis related to knowledge-based industries. Generated
multiple scenarios of employment growth in Davis and estimated the related economic impacts and
land demand over a 25-year period.
MedZone (Sacramento, California): EPS is assisting the City of Sacramento on the MedZone
project, which seeks to leverage specializations of the UC Davis and other health care systems to
diversify the regional economy and improve the Oak Park neighborhood. One potential outcome is
the creation of a physical venue loosely characterized as “industry collaboration space” in immediate
proximity to the UC Davis Medical Center. This space has been discussed as a possible life sciences
incubator or accelerator facility as part of a larger economic development initiative.
UC Systemwide Economic Impact Study (State of California): Comprehensive economic study to
analyze and communicate the range of economic effects that UC’s educational programs, services,
and research have on the State’s economy.
UC San Francisco Economic and Fiscal Impact Analysis (San Francisco, California): Analyze
operational impacts on San Francisco’s economy and the city and county budget and prepared a
detailed report on impacts on jobs and output in the city and its generation of local taxes and
consumption of local services. The report and its findings received coverage in the San Francisco
Business Times and San Francisco Chronicle.
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Economic & Planning Systems, Inc.
Proposal February 16, 2015
UC San Francisco Mission Bay Campus and Hospital: Commercial Land Use Impacts (San
Francisco, California): Prepared economic impact study for UC San Francisco (UCSF) related to its
Mission Bay campus and planned hospital facility with analysis of “spin-off” businesses and
neighborhood impacts.
Stanford University Fiscal and Economic Impacts Analysis (Redwood City, California): Fiscal
impact analysis projecting costs and revenues to the city over time, resulting from new 35-acre
administrative campus, taking into account Stanford’s tax-exempt status (as a nonprofit).
Austin Airport Reuse Plan (Austin, Texas): Conducted market study, organizational analysis,
interim reuse strategies, and financial feasibility analysis and developed a financing strategy and
strategic implementation measures. Resulted in substantial new investment by the University of
Texas at Austin as a major focal point of the project.
Lawrence Berkeley National Laboratory at Golden Gate Fields Fiscal and Economic Impact
Analysis (Albany, California): Conducted detailed fiscal, economic impact, and development
feasibility analysis of proposed development plans for the Golden Gate Fields site that would
accommodate Lawrence Berkeley National Laboratory (LBNL) expansion plans, as well as ancillary
private development.
Solano County Economic Diversification Study (Solano County, California): Conducted
detailed demographic and economic analyses and interviewed public and private entities to develop
Moving SOLANO Forward (MSF) Strategy, composed of a unifying vision and a set of objectives,
strategies, and implementation actions.
Sacramento Railyards Specific Plan Fiscal Impact Analysis (Sacramento, California): Prepared
a Public Facilities Financing Plan (Financing Plan), Fiscal Impact Analysis, Economic Impact
Analysis, and provided technical support for development agreement negotiations.
San Joaquin County Countywide Facility Fee Nexus Study (San Joaquin County, California):
Developed an Annexation Fiscal Analysis and assisted San Joaquin County in renegotiating the
Master Property Tax Sharing Agreements to assure that San Joaquin County is not adversely
affected by future annexations.
Other key EPS projects involving the EPS team included in this proposal include a detailed
Business Plan for redevelopment of NAS Alameda and a technology park on Fort Ord UC Monterey
Bay Education, Science, and Technology (UC MBEST) Center; the reuse of Fitzsimons Naval
Hospital in Aurora, Colorado; ongoing evaluation of economic benefits of the Monterey Institute for
International Studies; a recent feasibility analysis for Sacramento State of the Ramona Village (former
County Youth Authority) site; and advisory services provided to the developers of the UC Davis West
Village project regarding ground leases. Additional information on these and many other similar EPS
projects is available on request.
2.
EPS Personnel Qualifications and Experience
EPS integrates a mix of expertise across several relevant disciplines, including regional economics and
market analysis, redevelopment and reuse, economic development, infrastructure planning and funding,
goods movement, and public finance. Brief biographies for each of the core project team members are
provided below. The core project team will be supported by one or more EPS Research Analysts or
Associates. Detailed resumes for the proposed project team members are available on request.
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Economic & Planning Systems, Inc.
Proposal February 16, 2015
EPS Managing Principal David Zehnder will serve as Principal-in-Charge of this project and will provide
guidance and input as needed. Since arriving in 1992, David has helped build EPS into a pre-eminent
urban economics consulting firm. David seeks to apply his expertise in urban economics within a
multidisciplinary framework with focus on project and policy decision making that accurately reflects
identified opportunities and risks. His practice in the United States and Canada has concentrated on
mixed-use development concepts in the infill context, often seeking to activate public investments in
transit-oriented, university, downtown, industrial reuse, and maritime districts. David has practiced
intensively in the area of university-related development, having advised multiple UC and California State
University (CSU) campuses and related private-sector developers on research park;
incubator/accelerator; innovation villages; staff, faculty, and student housing; and economic and
community impacts and benefits. David has advised the City on several infill projects related to university
development, retail patterns, and public-private development projects, and he advised Perkins + Will in
the development of the current vision for the Nishi property. David holds a Master’s Degree in City and
Regional Planning from UC Berkeley, with an emphasis in Regional Economics.
EPS Senior Vice President Ryan Sharp will be the day-to-day Project Manager for this effort. Ryan has
experience in both the public and private sectors, including work in the economic development,
management consulting, and technical research arenas. He has developed a wide range of skills in
complex economic analyses, facilitation and consensus-building, and economic development program
design. He holds a Bachelor’s Degree in International Relations from UC Davis, a Master’s degree in
International Affairs from CSU Sacramento, and the designation of Certified Economic Developer from
the International Economic Development Council (IEDC). Ryan is the immediate past Chair of the IEDC
Education and Certification Advisory Committee and a member of the California Association for Local
Economic Development (CALED) Advisory Board. Ryan has extensive research and consulting
experience around industry clusters, economic impact analysis, and innovation economics. He was
instrumental in development of the Next Economy Capital Region Prosperity Plan and MSF Economic
Diversification Strategy and worked closely with the City on the Business Park Land Strategy. Ryan’s
economic impact experience covers a wide range of clients like UC Davis and PG&E addressing issues
such as utility infrastructure, real estate development, company location and expansion, energy
efficiency, and community investment.
EPS Executive Vice President Amy Lapin will prepare the City’s fiscal impact analysis model. Amy has
assisted multiple public and private entities in preparing fiscal impact analyses to determine the net fiscal
impacts of development on a public agency’s operating budget. Amy also has assisted public and private
entities in preparing urban services analyses, evaluating the service levels, and devising a funding
strategy to fund an urban level of public services to serve future residents and employees. Amy has
previous experience reviewing the assumptions and methodologies employed in the City’s fiscal impact
model in conjunction with a concise revenue impact analysis of a project in the City.
In addition, EPS Managing Principals James Musbach and Jason Moody will be involved at strategic
junctures based on their complimentary project experience. Both Jim and Jason work closely with David
Zehnder and EPS’s Sacramento office on a variety of projects around the State and nation.
EPS President and Managing Principal James Musbach, based out of EPS’s Oakland office, has
provided master planning and property development support services to many public agencies and
private developers since joining the firm in 1987. Among these experiences are multiple planning and
public-private development projects, creating new districts or major mixed-use communities in
conjunction with university, medical, research, and technology uses. Examples include the
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Economic & Planning Systems, Inc.
Proposal February 16, 2015
reuse/redevelopment of the University Medical Center Brackenridge, in Austin, Texas; UCSF Mission
Bay, in San Francisco, California; the Fitzsimmons Medical Center/University of Colorado Health
Science Center, in Denver, Colorado; UC Davis Village West, in Davis, California; UC Santa Cruz
MBEST Center, in Santa Cruz, California; and the Livermore National Labs Open Campus, in
Livermore, California; among others. For this assignment, Jim will provide strategic support and
guide the technical analysis, leveraging his expertise to provide insights into the economic
dimensions of medical/university district master planning.
EPS Managing Principal Jason Moody, also based out of EPS’s Oakland office, has developed a
specialization in evaluating the economic and market-related impacts of large R&D institutions
specifically and research-intensive sectors in general. In recent work, EPS has looked at land userelated opportunities with San Francisco’s Mission Bay, a major biotech hub anchored by UCSF, and
similar work looking at development opportunities adjacent to Stanford University. Jason also worked
with Perkins + Will as part of the Harbor UCLA Master Plan, focusing on economic and marketrelated issues. Jason will serve as a key Project Advisor for this effort.
Advisory Team: Jim Gray and Nahz Anvary, DTZ
EPS will also include DTZ principals Jim Gray and Nahz Anvary as a technical resource to the project.
Both Jim and Nahz have the most up-to-date data sets regarding real estate metrics driving feasibility in
Davis and the greater region, and both bring detailed knowledge of the industry players, their needs, and
other key “on-the-ground” dynamics affecting the type and rate of development likely to occur in Davis
under various circumstances.
Jim Gray, CCIM, is a Principal at DTZ. Jim has been active for more than 30 years in the commercial
real estate and development industry as a broker in Office, Investments, Sale/Leasebacks, and
Development and has been consistently recognized as a “top producer.” Jim has been a general partner
in the development of office buildings, mixed-use business parks, apartments, as well as single-family
subdivisions. Jim and Nahz are business partners and collaborate to meet the needs and objectives of
businesses, landlords, and developers. Jim is co-founder and Chairman of Community Business Bank
and is on the Board of Sutter Health Plus, a Health Insurance Plan. Jim has served in health care
governance for more than 25 years, including serving on the board and as past chair of Sutter Health.
Also, Jim served as a Yolo County Planning Commissioner, including a term as the Chairman. He is a
graduate of UC Davis, with a degree in Housing and Community Development, and a graduate of the
school of Mortgage Banking.
Nahz Anvary, CCIM, is a Principal of DTZ. Nahz specializes in investment sales and in full-service tenant
and landlord representation for office and investment properties. She works with both office landlords
and tenants to sell, purchase, lease and develop office buildings. Her expertise and marketing
background provide a unique perspective when marketing and repositioning properties. Nahz brings her
experience in managing business, repositioning products, and developing new products for Fortune 500
corporations to her work in commercial real estate. She has been recognized consistently as a “top
producer.” Nahz is a graduate of Wellesley College with a degree in Economics and Psychology and
received her MBA from Harvard Business School.
3.
Previous Project Experience
Six of the projects briefly cited above are presented in greater detail below, along with references,
budget, timeline, and links to key reports.
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Economic & Planning Systems, Inc.
Proposal February 16, 2015
UC Systemwide Economic Impact Study
California
The UC Office of the President (UCOP) was seeking a comprehensive economic study to analyze and
communicate the range of economic effects that UC’s educational programs, services, and research have
on the State’s economy. The need for this analysis came at a critical juncture for both UC and the State.
On the one hand, the strength of California’s economy has become increasingly linked to the type of
innovation, productivity, and diversity that the UC system has helped advance over its long history. On
the other hand, the ongoing budget crisis in California has affected all of the State’s programs and
services, including particularly onerous cuts to UC, even as student enrollment demands have increased.
In Phase I of this study, the UCOP retained EPS to quantify the UC’s “primary” economic impacts
generated by its education, research, and medical functions. EPS used an input/output (I/O) modeling
framework to quantify UC’s contribution to State and regional output, jobs, and employee compensation.
These economic impacts were disaggregated into 14 separate regions in the State and assigned to one
of UC’s 10 campuses or 5 medical centers. The analysis used primary data from UCOP related to
salaries and wages, capital investments, payments to retirees, and other expenditures.
Reference: William T. Tucker, Ph.D. M.B.A., Interim Vice President, Research and Graduate Studies,
Executive Director, Innovation Alliances and Services, University of California, Office of the President,
1111 Franklin Street, 5th Floor, Oakland, CA 94607, (510) 587-6037, [email protected]
Budget: $74,000
Timeline: 2011–2012
Web Link: The UC still makes available a PR brochure based on EPS’s study, as well as the study itself:
http://ucop.edu/communications/_files/mini-brochures/economic_impact_summary.pdf
http://regents.universityofcalifornia.edu/regmeet/sept11/f7attach.pdf
Livermore Valley Open Campus Master Plan and Development Feasibility Analysis
Livermore, California
EPS, along with Flad Architects, was hired by LLNL and SNL to prepare a Master Plan for a Science &
Technology Park located “outside the fence” but still on federal land and adjacent to existing facilities.
The purpose of the LVOC is to locate unclassified government research facilities in a more open
environment than the current LLNL facility to encourage collaborative R&D with academic and private
industry partners, greater interaction between lab scientists and the larger scientific community, and
potential collocation of academic institutions and private-sector R&D businesses to facilitate
dissemination and commercialization of LLNL scientific findings.
EPS was responsible for preparing a market analysis and development feasibility study for the LVOC. As
part of this effort, EPS interviewed program heads and Labs scientists from a wide range of research
areas about their projects and core competencies; analyzed Labs partnerships with outside agencies,
institutions, and businesses; conducted case studies of other research parks; and assessed the potential
links between the core research competencies of the Labs and emerging technologies in the academic
and business communities in the Bay Area. Based on this analysis, EPS evaluated the potential for
increased collaboration and collocation in LVOC, the scale and character of LVOC, and made
recommendations on factors critical to successful implementation of the Master Plan.
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Reference: Camille Bibeau, PhD, Lawrence Livermore National Laboratory, 7000 East Avenue L-001,
Livermore, CA 94550-9234, (925) 422-7798, [email protected]
Budget: $80,600
Timeline: 2010
Web Link: This report is not available publicly, but, for the purpose of reviewing EPS’s qualifications, a
copy of the report can be provided to the City through secured electronic means on request.
UCSF Fiscal and Economic Impact Studies
San Francisco, California
UCSF is a highly respected, health-focused university that has advanced biomedical research programs,
as well as graduate-level education in life sciences and health professions, and operates four hospitals in
San Francisco. UCSF is the second-largest employer in San Francisco, making it a significant economic
engine in the city. Because of its tax-exempt status, San Francisco also is particularly interested in UCSF
from a fiscal perspective.
EPS assisted UCSF in analyzing its operations’ impacts on San Francisco’s economy and the city and
county budget. EPS prepared a detailed report of UCSF’s activities, impacts on jobs and output in the
city, and its generation of local taxes and consumption of local services. The report and its findings
received coverage in the San Francisco Business Times and San Francisco Chronicle.
Reference: Diane Wong, Senior Planner/Environmental Coordinator, UCSF Campus Planning,
3333 California Street, Suite 11, San Francisco, CA 94143, (415) 502-5952, [email protected]
Budget: $98,000
Timeline: 2011
Web Link: http://www.ucsf.edu/about/economic-impact-report
Austin Airport Reuse Plan
Austin, Texas
Robert Mueller Airport was scheduled for closure in May 1999, with the transfer of airport activities to the
former Bergstrom Air Force Base. The Robert Mueller Airport facility is composed of 711 acres of land
located in central Austin along I-35, the city’s major north-south transportation corridor. The City of Austin
had experienced rapid growth in research- and technology-based industry and sought the creation of a
viable mixed-use development at the former airport that would provide jobs, housing, and economic
activity.
EPS teamed with a design firm and local consultants to create a development plan for the site, which
maximizes site disposition revenue while accomplishing the community’s reuse goals. EPS’s roles
included market analysis, organizational analysis, interim reuse strategies, financial feasibility analysis,
development of a financing strategy, and development of strategic implementation measures. The airport
has become one of Austin’s premier development opportunities that promise to bolster the surrounding
community and contribute to Austin’s impressive economic growth, featuring substantial new investment
by the University of Texas at Austin as a major focal point of the project.
Reference: Sue Edwards, Assistant City Manager, City of Austin, 301 West Second Street, Austin, TX
78701, (512) 974-7097, [email protected]
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Budget: $680,000
Timeline: 2001–2007
Web Link: The final product is a large and complex development agreement, but the following links
provide information regarding the resulting commercial development program and its award-winning
status:
http://www.muelleraustin.com/commercial/
http://www.cnu.org/resources/projects/robert-mueller-municipal-airport-reuse-plan-2008
Solano County Economic Diversification Study
Solano County, California
Solano County retained EPS, in concert with CSER and the Solano Economic Development Corporation
(EDC), to prepare an Economic Diversification Strategy (Strategy) for the county. This effort, dubbed
MSF, sought to build on past collaborative economic development efforts to develop a countywide
approach to diversify the economic base and hedge against defense spending fluctuations related to
Travis Air Force Base (TAFB), a major driver of the local economy.
The EPS Team conducted detailed demographic and economic analyses that helped shape discussions
with a diverse set of public- and private-sector stakeholders and preparation of the detailed Strategy.
Using the technical analyses as key inputs, as well as information derived from interviews with public and
private entities in Solano County, the EPS Team developed the MSF Strategy, composed of a unifying
vision, and set of objectives, strategies, and implementation actions associated with three overarching
goals: enhancing the county’s development capacity, strengthening regional economic and workforce
development programs and services, and improving the county as a high quality-of-life locale.
Reference: Stephen Pierce, former Public Communications Officer, County of Solano, current General
Manager, Solano County Fair, 900 Fairgrounds Drive, Vallejo, CA 94589, (707) 551-2000,
[email protected]
Budget: $350,000
Timeline: 2013–2014
Web Link: The Solano County Economic Diversification Study Final Report and other MSF information
can be found at the MSF home page: http://movingsolanoforward.com/
Sacramento Railyards Specific Plan Fiscal Impact Analysis
Sacramento, California
The Sacramento Railyards Specific Plan is located in the City of Sacramento on 244 acres of land
immediately north of downtown Sacramento, east of the Sacramento River, south of North B Street, and
north of the Federal Court House and Alkali Flat neighborhood. The Sacramento Railyards Specific Plan
provided for high-density, mixed-use development and a maximum allowance of 12,100 residential units,
2.4 million square feet of office space, 1.4 million square feet of commercial space, 491,000 square feet
of flexible mixed-use space, 485,390 square feet of historic and cultural space, and 1,100 hotel rooms.
The Sacramento Railyards Specific Plan also included open space, parks, and other community facilities.
The City of Sacramento retained EPS to prepare a Financing Plan, Fiscal Impact Analysis, Economic
Impact Analysis, and to provide technical support for development agreement negotiations:
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The Financing Plan identified proposed funding sources for all backbone infrastructure improvements,
public facilities, and administrative costs needed to serve the proposed land uses in the Sacramento
Railyards Specific Plan.
The Fiscal Impact Analysis estimated the impact on the City of Sacramento’s General Fund and Road
Fund from delivering municipal services to the Sacramento Railyards Specific Plan.
The objective of the Economic Impact Analysis was to estimate the quantifiable impacts of
Sacramento Railyards Specific Plan construction and operations of the proposed land uses on the
local economy.
In providing technical support for development agreement negotiations, EPS established a set of
preliminary guiding principles to guide decision making concerning public-private funding and
financing policies.
Reference: Mark Griffin, Development Finance Manager, City of Sacramento, New City Hall, 915 I Street,
3rd Floor, Mail Code #22001, Sacramento, CA 95814, (916) 808-8788, [email protected]
Budget: $280,000
Timeline: 2005–2008
Web Link: http://www.epsys.com/wp-content/uploads/2015/02/15574-F1-Railyards-Fiscal-Report11.07.pdf
4.
Conflict of Interest Statement
EPS has provided consulting services to hundreds of public- and private-sector clients throughout the
United States since 1983. EPS offers consulting services in real estate market analysis, feasibility
analysis, fiscal impact analysis, infrastructure financing strategies, affordable housing strategies, and
similar areas of expertise that are of value to local jurisdictions and authorities, as well as to developers.
EPS has been involved in several public-private development negotiations throughout the United States,
usually under contract to the public-sector party, but sometimes under contract to the private-sector party.
EPS’s reputation and success have been built on its ability to perform objective and transparent analyses
that allow all stakeholders to understand the economics of development and the financial implications of
various approaches to projects’ programmatic features and financing. This emphasis on objectivity,
rather than advocacy, is one of EPS’s official “core values” and is instilled in EPS’s staff from their first
day with the firm.
EPS strives to inform all potential clients of any conflicts of interest, real or perceived, so they can decide
whether or not EPS is the best firm to provide consulting services, given the unique technical
requirements of the assignments, as well as the political considerations in place. EPS is proud of its
longstanding success in providing quality services to a wide variety of clients and believes this breadth of
experience enables EPS to understand the perspectives and needs of all parties involved in complex
urban development.
As developers responded to the City’s earlier solicitation for projects, both applicants sought assistance
from EPS as they assembled their submittal information. However, there was no contractual relationship
for these brief assignments, which EPS offered under the rubric of marketing. These are known
contractual relationships in 2015:
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SKK/Hines: EPS leases its Sacramento office space from Hines, but has no other contractual
relationships to the group.
BOE: EPS has been assisting BOE on two projects which may have future work. These include the
Metro Air Park project, which has been delayed because of flood protection issues, and the Riverpoint
Marketplace project in West Sacramento. EPS is not aware of any conflicts associated with these
assignments. Details on each are provided below:
Metro Air Park. Metro Air Park (MAP) is a 1,500-acre business park located immediately east of
Sacramento International Airport in Sacramento County and is planned to contain nearly 21 million
square feet of business professional, commercial, and industrial land uses. Since adoption of the
2004 Public Facilities Financing Plan, a series of additional facility costs, new and increased
development impact fees, and depressed local market dynamics have resulted in a situation where
development projects in MAP are no longer competitive. EPS was retained by the Buzz Oates
Corporation to develop a proposal to incentivize new MAP development, including using existing and
new Sacramento County economic development incentives, using an alternative funding source for
habitat mitigation requirements, revising the 2007 Public Facilities Financing Plan (updated from
2004), and introducing new revenue sources. EPS met with Buzz Oates Corporation and
Sacramento County to discuss this proposal from 2010 through 2012. Discussions recommenced in
late 2014 and are expected to continue with the objective of reaching a mutually beneficial agreement
between Buzz Oates Corporation and Sacramento County in 2015.
Riverpoint Marketplace Revenue and Economic Analysis. At the request of the Buzz Oates
Corporation, EPS prepared a revenue and economic impact analysis of the Riverpoint Marketplace
located in West Sacramento and in a former city redevelopment area. EPS analyzed the revenue
and economic impacts of the Riverpoint Marketplace’s one-time infrastructure investments, key
ongoing annual West Sacramento General Fund revenues, ongoing annual tax increment revenue to
the City of West Sacramento, and the number of one-time construction and ongoing annual jobs
associated with the project. EPS prepared a final memorandum summarizing these impacts in
January 2015. No additional work is anticipated.
Regarding other projects in Yolo County, EPS was selected recently to conduct Assessment Areas #1
and #2 of the Rail Realignment Study, also overseen by David Zehnder and Ryan Sharp. Amy Lapin is
leading an analysis of flood protection fees in West Sacramento. Other EPS projects in Yolo County are
being handled by EPS staff not assigned to this project and include technical assistance to the City of
Woodland related to infrastructure finance, as well as a potential ongoing role in the Dunnigan Specific
Plan on behalf of Elliott Homes, both overseen by EPS Managing Principal Jamie Gomes.
Key Personnel Active Projects
Identified EPS personnel have placed this project as a top priority. Current and active projects for key
personnel are identified below:
David Zehnder: Monterey Institute of International Studies (Economic Impacts); Sacramento MedZone
Initiative; Fort Ord Capital Improvement Program (CIP) Phase III; Tahoe City and Kings Beach Town
Center Infill Development Incentives; San Joaquin County Tax Sharing; Placer Sunset Industrial Area
Plan; UC Davis Economic Impact Analysis; Broadway Bridge Market/Feasibility Study; Yolo Rail
Relocation Study; West Berkeley Waterfront Highest and Best Use Analysis; and Cupertino Community
Benefits Analysis.
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Ryan Sharp: Danville Comprehensive Economic Development Plan; Placer Sunset Industrial Area Plan;
SMUD Technical Assistance and Economic Impact Analysis; State Route 239 Economic Development
Opportunities Study; UC Davis Economic Impact Analysis; and Yolo Rail Realignment Assessment
Areas #1 and #2.
Amy Lapin: West Landing Specific Plan Fiscal Impact Analysis; Sacramento Tree Ordinance Update;
Placer Sunset Industrial Area Plan; Marble Valley Specific Plan (Fiscal Impact Analysis, Financing Plan);
Central El Dorado Hills Specific Plan (Fiscal Impact Analysis, Financing Plan); Lime Rock Valley Specific
Plan (Fiscal Impact Analysis, Economic Impact Analysis, Financing Plan); Lincoln Village 5 Fiscal Impact
Analysis; Lathrop Stanford Crossing Technical Support (Residual Land Value Analysis); West
Sacramento Flood Protection Fee; and Yuba County Magnolia Ranch Specific Plan (Fiscal Impact
Analysis).
5.
Exceptions to Contract
3.10.2.1 Minimum Scope of Insurance.
EPS cannot comply with code 1 (any auto) because EPS does not own any vehicles. EPS’s Automobile
Liability policy has codes 8 & 9, covering non-owned and hired vehicles.
3.10.4.2 Automobile Liability.
Because EPS’s Automobile Liability policy covers only non-owned and hired vehicles, EPS’s insurer
offers only blanket Additional Insured language for the Automobile Liability policy.
3.10.4.4 All Coverages.
Insurers do not offer 30-days’ written notice of cancellation or provide related endorsements. EPS
requests deleting this section entirely and creating a new section as follows:
3.10.2.3
Cancellation. Coverage shall not be suspended, voided, reduced or canceled except
after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the
City. Any failure to comply with reporting or other provisions of the policies, including breaches of
warranties, shall not affect coverage provided to the City, its directors, officials, officers, employees,
agents, and volunteers.
6.3 Indemnification.
EPS requests adding the word, “negligent,” as follows:
6.3.1
Indemnity. To the fullest extent permitted by law, Consultant shall defend, indemnify
and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless
from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of
any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of,
pertaining to, or incident to any alleged negligent acts, errors or omissions of Consultant, its officials,
officers, employees, subcontractors, consultants or agents in connection with the performance of the
Consultant’s Services, the Project or this Agreement, including without limitation the payment of all
consequential damages, expert witness fees and attorneys fees and other related costs and expenses.
Notwithstanding the foregoing, to the extent Consultant’s Services are subject to Civil Code
Section 2782.8, the above defense and indemnity obligations shall be limited, to the extent required by
Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness,
or willful misconduct of the Consultant.
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Subconsultants
Subconsultants are insured under EPS’s Professional Liability policy but cannot be covered by other EPS
policies.
6.
Scope of Work
Key Issues and EPS Approach
Initially, EPS will conduct a detailed review of the Bay Area Economics (BAE) study with the
understanding that the analysis provides key information to the California Environmental Quality Act
(CEQA) process and as such, assumptions are to be taken as “given.” EPS’s evaluation of the estimated
development parameters will therefore focus on how issues of market competition, feasibility, and other
development opportunities and constraints affect the phasing, development typology, assessed values,
and other attributes of the project. These are key topics to be explored at the outset of the project:
Overall volume and timing of development. Although the combined acreage of both Innovation
Center proposals and the Nishi site are substantial, the uses and benefits may be addressed at
buildout, whereby the challenge will be to use available evidence to further characterize the functions,
intensity, value, and other characteristics of development. However, as presented in the BAE report,
while prospects for Davis are very strong, the shift from current levels of net absorption to future
levels as identified by BAE are dramatic. Therefore near-term and longer term prospects, tied-in with
specific university and industry initiatives, must be approached as a range of potential outcomes. It
will be critical to establish defensible logic for the stated figures such that fiscal and economic impacts
are predicated on a solid foundation.
Ancillary retail scale and phasing. As an extension of the topic referenced above, the amount and
character of proposed retail will need to be evaluated to ensure that estimated expenditures and
resulting square footage can be defended. Urban decay will be a concern of citizens, and the topic
must be addressed to minimize the likelihood of any such prospects.
Role of Innovation Centers. Numerous recent publications reinforce the notion that these projects
work best when they are developed in intense, active urban centers with a variety of cultural, civic,
educational, and other supporting uses. While the two proposed Innovation Centers are geared
toward providing many of these characteristics, they are largely proposed as greenfield sites that
must create the necessary ambiance. To this end, it will be important to distinguish among the
various opportunities most likely to arrive in Davis to determine the allocation of space to key
locations by type of development. Proper determination of market segments and appropriate
locations can bolster annual absorption and provide a defensible determination of how the Downtown,
Nishi site, and peripheral Innovation Centers can work together to contribute to a complete economic
development ecosystem.
Scale of economic impacts. While regional economic impacts can be identified and likely would be
very strong if projected development is achieved, local economic impacts rely on the presence of a
buyer/supplier network that is likely to grow over time and may not initially rival examples such as
Stanford and Triangle Research Park. EPS will advise as to strategic opportunities to maximize the
overall positive impact to the local Davis and Yolo County economies.
Strategic implementation actions. EPS will use a multidisciplinary frame of reference to evaluate
and suggest solutions to key issues, including the feasibility of horizontal (infrastructure) and vertical
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(buildings) development, including use of emerging tools and techniques for underwriting these
facilities. Where appropriate, public-private funding concepts will be considered.
Scope of Work
This phase of the project will be broken into two segments. It is anticipated that Phase IA will be
processed under a separate contract. Phase IB and II will processed under a combined contract.
Phase IA: Initiate Project
Review reports and data and consult with the City and project applicants to gain an appropriate
understanding and clarification of the key findings and issues.
Consult with applicants and City representatives regarding specific project leads, initial phasing
concepts, and viable approaches to infrastructure and services funding.
Phase IB: Conduct Technical Assessments
Task 1: Initiate Project and Conduct Economic Analysis
Subtask 1.1: Build Assumptions
This initial task will expand on work conducted in Phase IA and
consolidate information from BAE and other reports, establish
the local context, and build assumptions to create scenarios for
the economic and fiscal impact analyses:
Fiscal inputs: issues and opportunities. EPS will consider
the fiscal effects of uses attracted to similarly sized
business and innovation parks to help inform project
development modeling assumptions.
Economic impact inputs: issues and opportunities. Gain an
understanding of industry sectors or clusters present and
the mix of job types prevalent in similar innovation centers.
Compare typical or desired sectors and clusters to local
and regional economic development strategies (e.g., Next
Economy Capital Region Prosperity Plan and Davis
Innovation and Economic Vitality Work Program) and UC
Davis research strengths (e.g., sustainability, agriculture,
and health) to help inform the potential distribution of
employment types in the proposed Innovation Centers.
Confirm study area(s), build the local context, gather
qualitative input on potential economic opportunities, and
identify local and regional project stakeholders.
Examples of Possible Economic
Opportunities:
Robotics and computer-controlled
machinery
Energy research
Life sciences (e.g., genomics)
World Food Center-related
research and development
Strengthened academic-industry
partnerships
New infrastructure/amenities
Reduced out-commute
Improved fiscal revenue and
public services
Balance of infill and new
development to respond to
market needs
Improved real estate economics
facilitating improved absorption
Interview local and regional project stakeholders to gain additional input on potential economic
opportunities and specific projects.
Assess specific areas of City interest and concepts raised in stakeholder interviews using tools such
as economic analysis, market demand evaluations, literature reviews and case studies, and
professional experience.
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Delineate economic opportunities related to site development and industry cluster growth to begin
characterizing the respective role and function of each development area in the City.
Subtask 1.2: Build Development Scenarios
The second subtask under Task 1 will build three development scenarios, each with high and low
buildout estimates:
Translate information from Subtask 1.1 to arrive at viable economic assumptions based on identified
economic opportunities, established real estate metrics, and an evaluation of competitive projects.
Establish three overall development scenarios for Mace Ranch Innovation Center , Davis Innovation
Center, and both innovation centers plus Nishi/Gateway that are consistent with the Environmental
Impact Reports and Bay Area Economics analysis.
Based on Subtask 1.1, populate each scenario with appropriately specific variables reflecting
competitive position of each area, with reference to identified economic opportunities, industry type,
labor characteristics, real estate prototypes (e.g., R&D/flex, manufacturing, office, etc.), probable
capital investment, assessed value considerations (e.g., property and sales tax), and alignment with
economic development strategies. This will be an iterative task with Phase II, as further information
regarding probable industry clusters will be developed, which may inform and refine these
descriptions.
Share the working scenarios with the City for review and feedback and adjust as appropriate to
finalize for the economic and fiscal impact analyses.
Discuss qualitative aspects of projects with City staff and set expectations regarding the format and
level of detail for the qualitative analysis covered in Phase II.
Subtask 1.3: Develop Land Economics Profile
This third element of the initial task establishes the prospective land economics of the two proposed
Innovation Centers for purposes of understanding the ability to cover infrastructure costs and other
facilities the City may wish to build. EPS will evaluate the following items.
Applicant information. EPS specifically will work with applicants to gain an improved understanding
of project revenue and cost attributes, supplemented by in-house and other industry data sources.
Cost-burden analysis. EPS will compare known costs of development with estimated value of
development to measure the relative “cost burden” confronting each of the two proposed centers.
Pro forma analysis. As necessary and appropriate, EPS may employ supplemental analysis using a
pro forma model to confirm development feasibility, given proposed exactions or other funding
expectations. Appropriate sensitivity analysis will be included in the pro-forma work.
Produce a technical memorandum that includes a preliminary development pro forma or residual
land value analysis related to the development proposals for the two applications, taking into account
necessary project infrastructure, mitigation measures, and phasing necessary for project delivery.
Task 2: Meeting Support
EPS will provide meeting support at up to 2 meetings between the Budget and Finance
Commission and the City Council, as well as periodic progress reports and up to 3 informal check-ins
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with staff. An allowance has been established for these meetings, which will require additional time
and materials if meetings exceed the identified level of effort.
Schedule and Budget
Above-referenced work will be complete by May 31, 2015. An initial administrative draft will be prepared
by May 1, 2015.
The estimated budget by task is shown below:
Phase IA (under separate contract)
$10,000
Phase IB
Task 1: Initiate Project and Conduct Economic Analysis
Task 2: Provide Meeting Support
$4,9501
Total Budget
7.
$35,000
$49,950
2015 Hourly Staff Billing Rates
California Offices
Managing Principal
$250–$300
Senior Principal
$300
Principal
$225–$260
Executive/Senior Vice President
$215–$220
Vice President
$195–$200
Senior Technical Associate
$180–$200
Senior Associate
$165–$185
Associate
$145
Research Analyst II
$100–$120
Research Analyst I
$80-$85
Production and Administrative Staff
$80-$85
Billing rates updated annually.
1 Task 2 is based on assumed attendance at up to 2 formal meetings and 3 informal check-in meetings
with City staff. Additional meetings, if requested, will be billed on a time-and-materials basis.
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Proposal
Economic and Fiscal Analysis: Phase II
Impact Evaluation
Prepared for:
City of Davis
Prepared by:
Economic & Planning Systems, Inc. (EPS)
February 16, 2015
EPS #152006
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Table of Contents
INTRODUCTION ................................................................................................................................................1
1.
QUALIFICATIONS AND EXPERIENCE..........................................................................................................1
2.
EPS PERSONNEL QUALIFICATIONS AND EXPERIENCE ..............................................................................5
3.
PREVIOUS PROJECT EXPERIENCE ...........................................................................................................7
4.
CONFLICT OF INTEREST STATEMENT .....................................................................................................11
5.
EXCEPTIONS TO CONTRACT ..................................................................................................................13
6.
SCOPE OF WORK .................................................................................................................................14
7.
2015 HOURLY STAFF BILLING RATES ....................................................................................................17
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Introduction
Economic & Planning Systems, Inc. (EPS) is pleased to present this proposal to provide economic and
fiscal analysis related to the proposed Davis Innovation Centers. This Phase II proposal directly builds on
the Phase I Scope of Work prepared under separate cover.
EPS recognizes the tremendous benefits the proposed Innovation Centers can create for the City of
Davis (City) and the entire region. The project approach will focus on addressing the required elements
of the Request for Proposals (RFP) and the City’s objectives of leveraging the University of California
(UC) Davis campus and other unique community attributes to advance local economic prosperity and job
creation.
The Innovation Centers have the potential to create benefits that generate economic value to the City and
UC Davis alike. The proposed projects could support the goal of strengthening academic-industry
partnerships in Davis and throughout the region, in support of the Next Economy initiative. Moreover, the
parks may provide much needed jobs-housing balance and fiscal resources, allowing Davis to maintain
its reputation as one of the best quality-of-life experiences attained in the region. The citizenry in Davis
must understand the economic and community benefit contributions offered by these opportunities, which
stand to provide a variety of jobs in multiple market segments. The proposed Innovation Centers have
great potential to move forward simultaneously, if phased and developed in concert with evolving market
forces.
1.
Qualifications and Experience
EPS is uniquely qualified to estimate the range of economic impacts that could result from the proposed
innovation centers:
EPS has more than 30 years of experience, seamlessly integrating technical skills around urban
revitalization and development, regional economics and economic development, and economic
impact analysis.
EPS has worked directly on projects in Davis, Woodland, West Sacramento, Yolo County, and
Solano County and has amassed significant relevant experience across Northern California, and
specifically the Sacramento Region, on projects related to defining economic development
opportunities and estimating fiscal and economic impacts.
EPS has been instrumental in evaluating the economic contributions of the UC and other systems.
EPS also has substantial experience working between various campuses and private-sector
stakeholders to respond to economic development and real estate opportunities and has contributed
to sustainable-job growth in key regional industries throughout the State of California (State) and the
nation as a result.
Senior staff members assigned to this project live in Davis and understand the local context,
stakeholders, and dynamics at play and are committed to delivering impactful work.
About EPS
The Firm: EPS is a land economics consulting firm experienced in the full spectrum of services related to
real estate development, the financing of public infrastructure and government services, land use and
conservation planning, and government organization.
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Guiding Principle: EPS was founded on the principle that real estate development and land use-related
public policy should be built on realistic assessment of market forces and economic trends, feasible
implementation measures, and recognition of public policy objectives, including provisions for required
public facilities and services.
Areas of Expertise: Real Estate Market and Feasibility Analysis; Public Finance; Economic
Development; Fiscal and Economic Impact Analysis; Reuse, Revitalization, and Redevelopment; Real
Estate Transactions and Negotiations; Regional Economics and Industry Analysis; Land Use Planning
and Growth Management; Open Space and Resource Conservation; Government Organization;
Transportation Planning and Analysis; and Asset Valuation and Repositioning.
Clients Served: Since 1983, EPS has provided consulting services to hundreds of public- and privatesector clients in California and throughout the United States. Clients include cities, counties, educational
institutions, multijurisdictional authorities, property owners, developers, investors, financial institutions, and
land use attorneys.
Staff Capabilities: EPS’s professional staff includes specialists in market analysis, public finance, real
estate development, economic development, land use and transportation planning, government
organization, and computer applications. EPS excels in preparing concise analyses that disclose risks
and impacts, support decision making, and provide solutions to real estate development and land userelated problems.
EPS Locations: Sacramento (primary office for this assignment), Oakland, and Los Angeles, California;
and Denver, Colorado.
EPS Web Site: www.epsys.com.
Key Practice Areas Related to the Davis Innovation Centers
EPS participates in a wide range of site, area, and regional-level development and revitalization efforts,
including evaluating market potentials and development feasibility, identifying opportunities and catalyst
sites, and providing public-private implementation plans. EPS has conducted numerous projects for
cities, redevelopment agencies, and developers as part of multidisciplinary teams or independently for
more focused economic analysis in efforts designed to promote economic development in a variety of
contexts. EPS’s project experience has been organized into the following topic areas, spanning a range
of development and redevelopment activities:
Economic and Market Analysis: The type, amount, and location of real estate development is
linked integrally to underlying economic and market forces. EPS takes a holistic approach to real
estate market analysis, taking into account product-specific performance measures, changes in
demographic and employment, local and regional economic trends, consumer preferences, and
business cycle considerations. The success of the Innovation Centers in Davis relies on a
fundamental regional understanding of market opportunity and constraints, which EPS is uniquely
positioned to provide.
Project Financial Feasibility: In addition to land constraints, Davis has suffered from a lack of
appropriate vertical product to offer growing companies. EPS evaluates the financial feasibility of real
estate development for the full spectrum of building types, including mixed-use, retail, office, housing,
lodging, and entertainment projects. Pro forma cash flow models are used to test feasibility under a
range of project alternatives, financing, and partnership options; disposition strategies; and measures
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of financial return. This capability will be critical at the outset of the project in determining overall
feasibility profiles and informing key assumptions for economic impact and fiscal impact analysis.
Economic Development: EPS provides a full range of economic development and regional
economic knowledge and skills, with expertise in labor force analysis, industry cluster formation,
input/output analysis, and policy formulation. This practice is interwoven with EPS’s overall urban
economics practice, providing a comprehensive approach toward community development, growth,
and diversification. The recent addition of Ryan Sharp, formerly leading the Sacramento Area
Commerce and Trade Organization (SACTO)’s Center for Strategic Economic Research (CSER),
bolsters EPS’s capabilities and market reach in this area, building on numerous successful past
collaborations.
Public-Private Financing: EPS helps to determine required levels of public support to attract
developer interest or to complete the financing program for a proposed project. These services
include identifying and forecasting potential funding sources; allocating capital costs among
participating entities and public finance negotiations, including drafting development agreements; and
formulating assessment rates, special tax formulas, and fee ordinances. Because EPS has a
balanced portfolio of public- and private-sector clients, including some of the largest and most
influential developers and university systems in the nation, EPS brings a unique and informed
perspective to how public and private resources may be effectively deployed in pursuit of sustainable
economic development in Davis.
Fiscal and Economic Impact Analysis: EPS evaluates the fiscal and economic impact of land use
projects as a basis for understanding and comparing the implications of various public policy
decisions. EPS outputs generally focus on quantifiable variables such as the costs and revenues to
local jurisdictions, jobs and output, and the likely change in sales on both subject land uses and
nearby businesses. As highlighted in this proposal, EPS has developed integrated fiscal, economic
impact, and capital funding analyses for some of the largest projects in the region, including the
Sacramento Railyards.
Sustainable Community Development: EPS collaborates with urban designers and planners in
formulating effective revitalization strategies for redevelopment, infill development, and transitoriented development sites. The revitalization of urban areas requires the strategic combination of
marketing and business development, the amelioration of physical constraints (e.g., blight) to create a
vital mix of commercial, civic, and residential uses, and determination of appropriate levels of agency
financial participation. In the case of Davis, there are multiple opportunities for effectively segmenting
the market to ensure projects are characterized and phased in such a manner as to ensure the
downtown is protected and bolstered, jobs and housing are better balanced, and fiscal revenues are
available to fund key City services in support of continued economic innovation and the overall quality
of life in Davis.
Innovation Center Economic and Fiscal Analysis: Overview of Key Experience
EPS has a long and distinguished track record in the evaluation of innovation park market potential,
economic impact, and implementation strategies. A selected group of projects underscoring this track
record is briefly provided below, with more detailed discussion of analogous projects provided later in this
proposal. All projects were conducted with the involvement of the EPS team members cited in this
proposal:
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NASA Research Park—University Development Area (Mountain View/Sunnyvale, California):
Financial feasibility and implementation strategies for self-sustaining and environmentally progressive
reuse of federally owned NASA Ames/Moffett Field property. Involved negotiations between NASA
and multiple universities and colleges based on multidisciplinary analysis.
Lawrence Livermore Open Campus Site Master Planning and Development (Livermore,
California): Prepared a market analysis and development feasibility study for Livermore Valley Open
Campus (LVOC) in support of a Master Plan for a Science & Technology Park, located “outside the
fence,” in conjunction with Lawrence Livermore National Laboratory (LLNL) and Sandia National
Laboratories (SNL). The project goal is to encourage collaborative research & development (R&D)
with academic and private-industry partners.
Nishi Concept Development (Davis, California): Multi-session internal charrette with Perkins +
Will, the City, UC Davis, Yolo County, and private-sector developer-owners of the 45-acre Nishi site.
EPS provided perspective on land use mix and intensity, key amenities including amount and
positioning of supporting retail and other uses, potential phasing concepts, and identification of
potential feasibility and market challenges.
Davis Business Park Initial Analysis (conducted by Ryan Sharp for CSER for the City,
California): Conducted analysis of the value of economic development and potential employment
growth, providing an overview of the various aspects and benefits of economic development with
specific discussion and quantitative analysis related to knowledge-based industries. Generated
multiple scenarios of employment growth in Davis and estimated the related economic impacts and
land demand over a 25-year period.
MedZone (Sacramento, California): EPS is assisting the City of Sacramento on the MedZone
project, which seeks to leverage specializations of the UC Davis and other health care systems to
diversify the regional economy and improve the Oak Park neighborhood. One potential outcome is
the creation of a physical venue loosely characterized as “industry collaboration space” in immediate
proximity to the UC Davis Medical Center. This space has been discussed as a possible life sciences
incubator or accelerator facility as part of a larger economic development initiative.
UC Systemwide Economic Impact Study (State of California): Comprehensive economic study to
analyze and communicate the range of economic effects that UC’s educational programs, services,
and research have on the State’s economy.
UC San Francisco Economic and Fiscal Impact Analysis (San Francisco, California): Analyze
operational impacts on San Francisco’s economy and the city and county budget and prepared a
detailed report on impacts on jobs and output in the city and its generation of local taxes and
consumption of local services. The report and its findings received coverage in the San Francisco
Business Times and San Francisco Chronicle.
UC San Francisco Mission Bay Campus and Hospital: Commercial Land Use Impacts (San
Francisco, California): Prepared economic impact study for UC San Francisco (UCSF) related to its
Mission Bay campus and planned hospital facility with analysis of “spin-off” businesses and
neighborhood impacts.
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Stanford University Fiscal and Economic Impacts Analysis (Redwood City, California): Fiscal
impact analysis projecting costs and revenues to the city over time, resulting from new 35-acre
administrative campus, taking into account Stanford’s tax-exempt status (as a nonprofit).
Austin Airport Reuse Plan (Austin, Texas): Conducted market study, organizational analysis,
interim reuse strategies, and financial feasibility analysis and developed a financing strategy and
strategic implementation measures. Resulted in substantial new investment by the University of
Texas at Austin as a major focal point of the project.
Lawrence Berkeley National Laboratory at Golden Gate Fields Fiscal and Economic Impact
Analysis (Albany, California): Conducted detailed fiscal, economic impact, and development
feasibility analysis of proposed development plans for the Golden Gate Fields site that would
accommodate Lawrence Berkeley National Laboratory (LBNL) expansion plans, as well as ancillary
private development.
Solano County Economic Diversification Study (Solano County, California): Conducted
detailed demographic and economic analyses and interviewed public and private entities to develop
Moving SOLANO Forward (MSF) Strategy, composed of a unifying vision and a set of objectives,
strategies, and implementation actions.
Sacramento Railyards Specific Plan Fiscal Impact Analysis (Sacramento, California): Prepared
a Public Facilities Financing Plan (Financing Plan), Fiscal Impact Analysis, Economic Impact
Analysis, and provided technical support for development agreement negotiations.
San Joaquin County Countywide Facility Fee Nexus Study (San Joaquin County, California):
Developed an Annexation Fiscal Analysis and assisted San Joaquin County in renegotiating the
Master Property Tax Sharing Agreements to assure that San Joaquin County is not adversely
affected by future annexations.
Other key EPS projects involving the EPS team included in this proposal include a detailed
Business Plan for redevelopment of NAS Alameda and a technology park on Fort Ord UC Monterey
Bay Education, Science, and Technology (UC MBEST) Center; the reuse of Fitzsimons Naval
Hospital in Aurora, Colorado; ongoing evaluation of economic benefits of the Monterey Institute for
International Studies; a recent feasibility analysis for Sacramento State of the Ramona Village (former
County Youth Authority) site; and advisory services provided to the developers of the UC Davis West
Village project regarding ground leases. Additional information on these and many other similar EPS
projects is available on request.
2.
EPS Personnel Qualifications and Experience
EPS integrates a mix of expertise across several relevant disciplines, including regional economics and
market analysis, redevelopment and reuse, economic development, infrastructure planning and funding,
goods movement, and public finance. Brief biographies for each of the core project team members are
provided below. The core project team will be supported by one or more EPS Research Analysts or
Associates. Detailed resumes for the proposed project team members are available on request.
EPS Managing Principal David Zehnder will serve as Principal-in-Charge of this project and will provide
guidance and input as needed. Since arriving in 1992, David has helped build EPS into a pre-eminent
urban economics consulting firm. David seeks to apply his expertise in urban economics within a
multidisciplinary framework with focus on project and policy decision making that accurately reflects
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identified opportunities and risks. His practice in the United States and Canada has concentrated on
mixed-use development concepts in the infill context, often seeking to activate public investments in
transit-oriented, university, downtown, industrial reuse, and maritime districts. David has practiced
intensively in the area of university-related development, having advised multiple UC and California State
University (CSU) campuses and related private-sector developers on research park;
incubator/accelerator; innovation villages; staff, faculty, and student housing; and economic and
community impacts and benefits. David has advised the City on several infill projects related to university
development, retail patterns, and public-private development projects, and he advised Perkins + Will in
the development of the current vision for the Nishi property. David holds a Master’s Degree in City and
Regional Planning from UC Berkeley, with an emphasis in Regional Economics.
EPS Senior Vice President Ryan Sharp will be the day-to-day Project Manager for this effort. Ryan has
experience in both the public and private sectors, including work in the economic development,
management consulting, and technical research arenas. He has developed a wide range of skills in
complex economic analyses, facilitation and consensus-building, and economic development program
design. He holds a Bachelor’s Degree in International Relations from UC Davis, a Master’s degree in
International Affairs from CSU Sacramento, and the designation of Certified Economic Developer from
the International Economic Development Council (IEDC). Ryan is the immediate past Chair of the IEDC
Education and Certification Advisory Committee and a member of the California Association for Local
Economic Development (CALED) Advisory Board. Ryan has extensive research and consulting
experience around industry clusters, economic impact analysis, and innovation economics. He was
instrumental in development of the Next Economy Capital Region Prosperity Plan and MSF Economic
Diversification Strategy and worked closely with the City on the Business Park Land Strategy. Ryan’s
economic impact experience covers a wide range of clients like UC Davis and PG&E addressing issues
such as utility infrastructure, real estate development, company location and expansion, energy
efficiency, and community investment.
EPS Executive Vice President Amy Lapin will prepare the City’s fiscal impact analysis model. Amy has
assisted multiple public and private entities in preparing fiscal impact analyses to determine the net fiscal
impacts of development on a public agency’s operating budget. Amy also has assisted public and private
entities in preparing urban services analyses, evaluating the service levels, and devising a funding
strategy to fund an urban level of public services to serve future residents and employees. Amy has
previous experience reviewing the assumptions and methodologies employed in the City’s fiscal impact
model in conjunction with a concise revenue impact analysis of a project in the City.
In addition, EPS Managing Principals James Musbach and Jason Moody will be involved at strategic
junctures based on their complimentary project experience. Both Jim and Jason work closely with David
Zehnder and EPS’s Sacramento office on a variety of projects around the State and nation.
EPS President and Managing Principal James Musbach, based out of EPS’s Oakland office, has
provided master planning and property development support services to many public agencies and
private developers since joining the firm in 1987. Among these experiences are multiple planning and
public-private development projects, creating new districts or major mixed-use communities in
conjunction with university, medical, research, and technology uses. Examples include the
reuse/redevelopment of the University Medical Center Brackenridge, in Austin, Texas; UCSF Mission
Bay, in San Francisco, California; the Fitzsimmons Medical Center/University of Colorado Health
Science Center, in Denver, Colorado; UC Davis Village West, in Davis, California; UC Santa Cruz
MBEST Center, in Santa Cruz, California; and the Livermore National Labs Open Campus, in
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Livermore, California; among others. For this assignment, Jim will provide strategic support and
guide the technical analysis, leveraging his expertise to provide insights into the economic
dimensions of medical/university district master planning.
EPS Managing Principal Jason Moody, also based out of EPS’s Oakland office, has developed a
specialization in evaluating the economic and market-related impacts of large R&D institutions
specifically and research-intensive sectors in general. In recent work, EPS has looked at land userelated opportunities with San Francisco’s Mission Bay, a major biotech hub anchored by UCSF, and
similar work looking at development opportunities adjacent to Stanford University. Jason also worked
with Perkins + Will as part of the Harbor UCLA Master Plan, focusing on economic and marketrelated issues. Jason will serve as a key Project Advisor for this effort.
Advisory Team: Jim Gray and Nahz Anvary, DTZ
EPS will also include DTZ principals Jim Gray and Nahz Anvary as a technical resource to the project.
Both Jim and Nahz have the most up-to-date data sets regarding real estate metrics driving feasibility in
Davis and the greater region, and both bring detailed knowledge of the industry players, their needs, and
other key “on-the-ground” dynamics affecting the type and rate of development likely to occur in Davis
under various circumstances.
Jim Gray, CCIM, is a Principal at DTZ. Jim has been active for more than 30 years in the commercial
real estate and development industry as a broker in Office, Investments, Sale/Leasebacks, and
Development and has been consistently recognized as a “top producer.” Jim has been a general partner
in the development of office buildings, mixed-use business parks, apartments, as well as single-family
subdivisions. Jim and Nahz are business partners and collaborate to meet the needs and objectives of
businesses, landlords, and developers. Jim is co-founder and Chairman of Community Business Bank
and is on the Board of Sutter Health Plus, a Health Insurance Plan. Jim has served in health care
governance for more than 25 years, including serving on the board and as past chair of Sutter Health.
Also, Jim served as a Yolo County Planning Commissioner, including a term as the Chairman. He is a
graduate of UC Davis, with a degree in Housing and Community Development, and a graduate of the
school of Mortgage Banking.
Nahz Anvary, CCIM, is a Principal of DTZ. Nahz specializes in investment sales and in full-service tenant
and landlord representation for office and investment properties. She works with both office landlords
and tenants to sell, purchase, lease and develop office buildings. Her expertise and marketing
background provide a unique perspective when marketing and repositioning properties. Nahz brings her
experience in managing business, repositioning products, and developing new products for Fortune 500
corporations to her work in commercial real estate. She has been recognized consistently as a “top
producer.” Nahz is a graduate of Wellesley College with a degree in Economics and Psychology and
received her MBA from Harvard Business School.
3.
Previous Project Experience
Six of the projects briefly cited above are presented in greater detail below, along with references,
budget, timeline, and links to key reports.
UC Systemwide Economic Impact Study
California
The UC Office of the President (UCOP) was seeking a comprehensive economic study to analyze and
communicate the range of economic effects that UC’s educational programs, services, and research have
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on the State’s economy. The need for this analysis came at a critical juncture for both UC and the State.
On the one hand, the strength of California’s economy has become increasingly linked to the type of
innovation, productivity, and diversity that the UC system has helped advance over its long history. On
the other hand, the ongoing budget crisis in California has affected all of the State’s programs and
services, including particularly onerous cuts to UC, even as student enrollment demands have increased.
In Phase I of this study, the UCOP retained EPS to quantify the UC’s “primary” economic impacts
generated by its education, research, and medical functions. EPS used an input/output (I/O) modeling
framework to quantify UC’s contribution to State and regional output, jobs, and employee compensation.
These economic impacts were disaggregated into 14 separate regions in the State and assigned to one
of UC’s 10 campuses or 5 medical centers. The analysis used primary data from UCOP related to
salaries and wages, capital investments, payments to retirees, and other expenditures.
Reference: William T. Tucker, Ph.D. M.B.A., Interim Vice President, Research and Graduate Studies,
Executive Director, Innovation Alliances and Services, University of California, Office of the President,
1111 Franklin Street, 5th Floor, Oakland, CA 94607, (510) 587-6037, [email protected]
Budget: $74,000
Timeline: 2011–2012
Web Link: The UC still makes available a PR brochure based on EPS’s study, as well as the study itself:
http://ucop.edu/communications/_files/mini-brochures/economic_impact_summary.pdf
http://regents.universityofcalifornia.edu/regmeet/sept11/f7attach.pdf
Livermore Valley Open Campus Master Plan and Development Feasibility Analysis
Livermore, California
EPS, along with Flad Architects, was hired by LLNL and SNL to prepare a Master Plan for a Science &
Technology Park located “outside the fence” but still on federal land and adjacent to existing facilities.
The purpose of the LVOC is to locate unclassified government research facilities in a more open
environment than the current LLNL facility to encourage collaborative R&D with academic and private
industry partners, greater interaction between lab scientists and the larger scientific community, and
potential collocation of academic institutions and private-sector R&D businesses to facilitate
dissemination and commercialization of LLNL scientific findings.
EPS was responsible for preparing a market analysis and development feasibility study for the LVOC. As
part of this effort, EPS interviewed program heads and Labs scientists from a wide range of research
areas about their projects and core competencies; analyzed Labs partnerships with outside agencies,
institutions, and businesses; conducted case studies of other research parks; and assessed the potential
links between the core research competencies of the Labs and emerging technologies in the academic
and business communities in the Bay Area. Based on this analysis, EPS evaluated the potential for
increased collaboration and collocation in LVOC, the scale and character of LVOC, and made
recommendations on factors critical to successful implementation of the Master Plan.
Reference: Camille Bibeau, PhD, Lawrence Livermore National Laboratory, 7000 East Avenue L-001,
Livermore, CA 94550-9234, (925) 422-7798, [email protected]
Budget: $80,600
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Timeline: 2010
Web Link: This report is not available publicly, but, for the purpose of reviewing EPS’s qualifications, a
copy of the report can be provided to the City through secured electronic means on request.
UCSF Fiscal and Economic Impact Studies
San Francisco, California
UCSF is a highly respected, health-focused university that has advanced biomedical research programs,
as well as graduate-level education in life sciences and health professions, and operates four hospitals in
San Francisco. UCSF is the second-largest employer in San Francisco, making it a significant economic
engine in the city. Because of its tax-exempt status, San Francisco also is particularly interested in UCSF
from a fiscal perspective.
EPS assisted UCSF in analyzing its operations’ impacts on San Francisco’s economy and the city and
county budget. EPS prepared a detailed report of UCSF’s activities, impacts on jobs and output in the
city, and its generation of local taxes and consumption of local services. The report and its findings
received coverage in the San Francisco Business Times and San Francisco Chronicle.
Reference: Diane Wong, Senior Planner/Environmental Coordinator, UCSF Campus Planning,
3333 California Street, Suite 11, San Francisco, CA 94143, (415) 502-5952, [email protected]
Budget: $98,000
Timeline: 2011
Web Link: http://www.ucsf.edu/about/economic-impact-report
Austin Airport Reuse Plan
Austin, Texas
Robert Mueller Airport was scheduled for closure in May 1999, with the transfer of airport activities to the
former Bergstrom Air Force Base. The Robert Mueller Airport facility is composed of 711 acres of land
located in central Austin along I-35, the city’s major north-south transportation corridor. The City of Austin
had experienced rapid growth in research- and technology-based industry and sought the creation of a
viable mixed-use development at the former airport that would provide jobs, housing, and economic
activity.
EPS teamed with a design firm and local consultants to create a development plan for the site, which
maximizes site disposition revenue while accomplishing the community’s reuse goals. EPS’s roles
included market analysis, organizational analysis, interim reuse strategies, financial feasibility analysis,
development of a financing strategy, and development of strategic implementation measures. The airport
has become one of Austin’s premier development opportunities that promise to bolster the surrounding
community and contribute to Austin’s impressive economic growth, featuring substantial new investment
by the University of Texas at Austin as a major focal point of the project.
Reference: Sue Edwards, Assistant City Manager, City of Austin, 301 West Second Street, Austin, TX
78701, (512) 974-7097, [email protected]
Budget: $680,000
Timeline: 2001–2007
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Web Link: The final product is a large and complex development agreement, but the following links
provide information regarding the resulting commercial development program and its award-winning
status:
http://www.muelleraustin.com/commercial/
http://www.cnu.org/resources/projects/robert-mueller-municipal-airport-reuse-plan-2008
Solano County Economic Diversification Study
Solano County, California
Solano County retained EPS, in concert with CSER and the Solano Economic Development Corporation
(EDC), to prepare an Economic Diversification Strategy (Strategy) for the county. This effort, dubbed
MSF, sought to build on past collaborative economic development efforts to develop a countywide
approach to diversify the economic base and hedge against defense spending fluctuations related to
Travis Air Force Base (TAFB), a major driver of the local economy.
The EPS Team conducted detailed demographic and economic analyses that helped shape discussions
with a diverse set of public- and private-sector stakeholders and preparation of the detailed Strategy.
Using the technical analyses as key inputs, as well as information derived from interviews with public and
private entities in Solano County, the EPS Team developed the MSF Strategy, composed of a unifying
vision, and set of objectives, strategies, and implementation actions associated with three overarching
goals: enhancing the county’s development capacity, strengthening regional economic and workforce
development programs and services, and improving the county as a high quality-of-life locale.
Reference: Stephen Pierce, former Public Communications Officer, County of Solano, current General
Manager, Solano County Fair, 900 Fairgrounds Drive, Vallejo, CA 94589, (707) 551-2000,
[email protected]
Budget: $350,000
Timeline: 2013–2014
Web Link: The Solano County Economic Diversification Study Final Report and other MSF information
can be found at the MSF home page: http://movingsolanoforward.com/
Sacramento Railyards Specific Plan Fiscal Impact Analysis
Sacramento, California
The Sacramento Railyards Specific Plan is located in the City of Sacramento on 244 acres of land
immediately north of downtown Sacramento, east of the Sacramento River, south of North B Street, and
north of the Federal Court House and Alkali Flat neighborhood. The Sacramento Railyards Specific Plan
provided for high-density, mixed-use development and a maximum allowance of 12,100 residential units,
2.4 million square feet of office space, 1.4 million square feet of commercial space, 491,000 square feet
of flexible mixed-use space, 485,390 square feet of historic and cultural space, and 1,100 hotel rooms.
The Sacramento Railyards Specific Plan also included open space, parks, and other community facilities.
The City of Sacramento retained EPS to prepare a Financing Plan, Fiscal Impact Analysis, Economic
Impact Analysis, and to provide technical support for development agreement negotiations:
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The Financing Plan identified proposed funding sources for all backbone infrastructure improvements,
public facilities, and administrative costs needed to serve the proposed land uses in the Sacramento
Railyards Specific Plan.
The Fiscal Impact Analysis estimated the impact on the City of Sacramento’s General Fund and Road
Fund from delivering municipal services to the Sacramento Railyards Specific Plan.
The objective of the Economic Impact Analysis was to estimate the quantifiable impacts of
Sacramento Railyards Specific Plan construction and operations of the proposed land uses on the
local economy.
In providing technical support for development agreement negotiations, EPS established a set of
preliminary guiding principles to guide decision making concerning public-private funding and
financing policies.
Reference: Mark Griffin, Development Finance Manager, City of Sacramento, New City Hall, 915 I Street,
3rd Floor, Mail Code #22001, Sacramento, CA 95814, (916) 808-8788, [email protected]
Budget: $280,000
Timeline: 2005–2008
Web Link: http://www.epsys.com/wp-content/uploads/2015/02/15574-F1-Railyards-Fiscal-Report11.07.pdf
4.
Conflict of Interest Statement
EPS has provided consulting services to hundreds of public- and private-sector clients throughout the
United States since 1983. EPS offers consulting services in real estate market analysis, feasibility
analysis, fiscal impact analysis, infrastructure financing strategies, affordable housing strategies, and
similar areas of expertise that are of value to local jurisdictions and authorities, as well as to developers.
EPS has been involved in several public-private development negotiations throughout the United States,
usually under contract to the public-sector party, but sometimes under contract to the private-sector party.
EPS’s reputation and success have been built on its ability to perform objective and transparent analyses
that allow all stakeholders to understand the economics of development and the financial implications of
various approaches to projects’ programmatic features and financing. This emphasis on objectivity,
rather than advocacy, is one of EPS’s official “core values” and is instilled in EPS’s staff from their first
day with the firm.
EPS strives to inform all potential clients of any conflicts of interest, real or perceived, so they can decide
whether or not EPS is the best firm to provide consulting services, given the unique technical
requirements of the assignments, as well as the political considerations in place. EPS is proud of its
longstanding success in providing quality services to a wide variety of clients and believes this breadth of
experience enables EPS to understand the perspectives and needs of all parties involved in complex
urban development.
As developers responded to the City’s earlier solicitation for projects, both applicants sought assistance
from EPS as they assembled their submittal information. However, there was no contractual relationship
for these brief assignments, which EPS offered under the rubric of marketing. These are known
contractual relationships in 2015:
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SKK/Hines: EPS leases its Sacramento office space from Hines, but has no other contractual
relationships to the group.
BOE: EPS has been assisting BOE on two projects which may have future work. These include the
Metro Air Park project, which has been delayed because of flood protection issues, and the Riverpoint
Marketplace project in West Sacramento. EPS is not aware of any conflicts associated with these
assignments. Details on each are provided below:
Metro Air Park. Metro Air Park (MAP) is a 1,500-acre business park located immediately east of
Sacramento International Airport in Sacramento County and is planned to contain nearly 21 million
square feet of business professional, commercial, and industrial land uses. Since adoption of the
2004 Public Facilities Financing Plan, a series of additional facility costs, new and increased
development impact fees, and depressed local market dynamics have resulted in a situation where
development projects in MAP are no longer competitive. EPS was retained by the Buzz Oates
Corporation to develop a proposal to incentivize new MAP development, including using existing and
new Sacramento County economic development incentives, using an alternative funding source for
habitat mitigation requirements, revising the 2007 Public Facilities Financing Plan (updated from
2004), and introducing new revenue sources. EPS met with Buzz Oates Corporation and
Sacramento County to discuss this proposal from 2010 through 2012. Discussions recommenced in
late 2014 and are expected to continue with the objective of reaching a mutually beneficial agreement
between Buzz Oates Corporation and Sacramento County in 2015.
Riverpoint Marketplace Revenue and Economic Analysis. At the request of the Buzz Oates
Corporation, EPS prepared a revenue and economic impact analysis of the Riverpoint Marketplace
located in West Sacramento and in a former city redevelopment area. EPS analyzed the revenue
and economic impacts of the Riverpoint Marketplace’s one-time infrastructure investments, key
ongoing annual West Sacramento General Fund revenues, ongoing annual tax increment revenue to
the City of West Sacramento, and the number of one-time construction and ongoing annual jobs
associated with the project. EPS prepared a final memorandum summarizing these impacts in
January 2015. No additional work is anticipated.
Regarding other projects in Yolo County, EPS was selected recently to conduct Assessment Areas #1
and #2 of the Rail Realignment Study, also overseen by David Zehnder and Ryan Sharp. Amy Lapin is
leading an analysis of flood protection fees in West Sacramento. Other EPS projects in Yolo County are
being handled by EPS staff not assigned to this project and include technical assistance to the City of
Woodland related to infrastructure finance, as well as a potential ongoing role in the Dunnigan Specific
Plan on behalf of Elliott Homes, both overseen by EPS Managing Principal Jamie Gomes.
Key Personnel Active Projects
Identified EPS personnel have placed this project as a top priority. Current and active projects for key
personnel are identified below:
David Zehnder: Monterey Institute of International Studies (Economic Impacts); Sacramento MedZone
Initiative; Fort Ord Capital Improvement Program (CIP) Phase III; Tahoe City and Kings Beach Town
Center Infill Development Incentives; San Joaquin County Tax Sharing; Placer Sunset Industrial Area
Plan; UC Davis Economic Impact Analysis; Broadway Bridge Market/Feasibility Study; Yolo Rail
Relocation Study; West Berkeley Waterfront Highest and Best Use Analysis; and Cupertino Community
Benefits Analysis.
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Ryan Sharp: Danville Comprehensive Economic Development Plan; Placer Sunset Industrial Area Plan;
SMUD Technical Assistance and Economic Impact Analysis; State Route 239 Economic Development
Opportunities Study; UC Davis Economic Impact Analysis; and Yolo Rail Realignment Assessment
Areas #1 and #2.
Amy Lapin: West Landing Specific Plan Fiscal Impact Analysis; Sacramento Tree Ordinance Update;
Placer Sunset Industrial Area Plan; Marble Valley Specific Plan (Fiscal Impact Analysis, Financing Plan);
Central El Dorado Hills Specific Plan (Fiscal Impact Analysis, Financing Plan); Lime Rock Valley Specific
Plan (Fiscal Impact Analysis, Economic Impact Analysis, Financing Plan); Lincoln Village 5 Fiscal Impact
Analysis; Lathrop Stanford Crossing Technical Support (Residual Land Value Analysis); West
Sacramento Flood Protection Fee; and Yuba County Magnolia Ranch Specific Plan (Fiscal Impact
Analysis).
5.
Exceptions to Contract
3.10.2.1 Minimum Scope of Insurance.
EPS cannot comply with code 1 (any auto) because EPS does not own any vehicles. EPS’s Automobile
Liability policy has codes 8 & 9, covering non-owned and hired vehicles.
3.10.4.2 Automobile Liability.
Because EPS’s Automobile Liability policy covers only non-owned and hired vehicles, EPS’s insurer
offers only blanket Additional Insured language for the Automobile Liability policy.
3.10.4.4 All Coverages.
Insurers do not offer 30-days’ written notice of cancellation or provide related endorsements. EPS
requests deleting this section entirely and creating a new section as follows:
3.10.2.3
Cancellation. Coverage shall not be suspended, voided, reduced or canceled except
after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the
City. Any failure to comply with reporting or other provisions of the policies, including breaches of
warranties, shall not affect coverage provided to the City, its directors, officials, officers, employees,
agents, and volunteers.
6.3 Indemnification.
EPS requests adding the word, “negligent,” as follows:
6.3.1
Indemnity. To the fullest extent permitted by law, Consultant shall defend, indemnify
and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless
from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of
any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of,
pertaining to, or incident to any alleged negligent acts, errors or omissions of Consultant, its officials,
officers, employees, subcontractors, consultants or agents in connection with the performance of the
Consultant’s Services, the Project or this Agreement, including without limitation the payment of all
consequential damages, expert witness fees and attorneys fees and other related costs and expenses.
Notwithstanding the foregoing, to the extent Consultant’s Services are subject to Civil Code
Section 2782.8, the above defense and indemnity obligations shall be limited, to the extent required by
Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness,
or willful misconduct of the Consultant.
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Subconsultants
Subconsultants are insured under EPS’s Professional Liability policy but cannot be covered by other EPS
policies.
6.
Scope of Work
Key Issues and EPS Approach
As part of Phase I, EPS will conduct a detailed review of the Bay Area Economics (BAE) study with the
understanding that the analysis provides key information to the California Environmental Quality Act
(CEQA) process and as such, assumptions are to be taken as “given.” EPS’s evaluation of the estimated
development parameters will therefore focus on how issues of market competition, feasibility, and other
development opportunities and constraints affect the phasing, development typology, assessed values,
and other attributes of the project. Key topics to be explored include overall volume and timing of
development, ancillary retail scale and phasing, role of Innovation Centers, scale of economic impacts,
and strategic implementation actions.
This phase (Phase II) will build on the Phase I analysis and provide the City with an understanding of the
economic and fiscal impacts for each of the development scenarios identified in Phase I.
Scope of Work
Task 1: Conduct Community Economic Impact Analysis
This task will characterize the types of economic activities that could be housed in the Innovation Centers,
describe the benefits of these activities, and estimate the associated economic impacts resulting from
various innovation park scenarios:
Refine the Phase I analysis by conducting case studies of up to three innovation centers/districts to
further develop prospects for specific industry sectors and clusters present and the related mix of job
types. Develop analysis of case-study sectors and cluster characteristics in relation to local and
regional economic development strategies and UC Davis research strengths to build on preliminary
work and define the potential distribution of employment types in the proposed Innovation Centers.
Allocate the employment in the two buildout assumptions for each of the three scenarios to reflect the
defined mix of employment types with appropriate variation for the combination of uses in the
scenarios.
Establish a “business as usual” forecast for the Davis community and Yolo County overall, primarily
based on the Sacramento Area Council of Governments (SACOG)’s latest Metropolitan
Transportation Plan forecasts and informed by the General Plan. Calculate the net new employment
(above the “business as usual” baseline) resulting from the two buildout assumptions for each of the
three scenarios—this economic activity will act as the direct industry impacts.
Use the IMPLAN I/O model, with data calibrated for the Davis community and Yolo County, to
estimate the indirect (demand on suppliers of goods and services) and induced (employee spending
activity) industry impacts generated from the ongoing, long-term, direct industry impacts and mix of
employment types associated with the two buildout assumptions for the three scenarios. Present the
total industry economic impacts (accounting for direct, indirect, and induced activities) in terms of
employment, employee compensation, output, and model-derived State and local tax generation.
The tax generation estimates will be informed by the fiscal analysis and adjusted as necessary to
inform consistency.
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Build an analysis using the Davis community and Yolo County IMPLAN models to define the multiplier
effect and total employment, employee compensation, output, and model-derived State and local tax
impact for a standard number of jobs (e.g., the impact associated with every 10 jobs) in each of the
clusters and employment types defined above.
Use the “business as usual” forecast to define the expected level of development in the forecast
period and estimate the net new development above this baseline level associated with the two
buildout assumptions for each of the three scenarios. Use information from the applicants and
industry-standard values to estimate and define the total construction costs related to the two buildout
assumptions for each of the three scenarios—these estimated costs will act as the direct construction
impacts.
Employ the IMPAN modeling framework for the Davis community and Yolo County to calculate the
indirect and induced construction impacts that result from the direct construction costs associated
with the two buildout assumptions for the three scenarios. Summarize the total construction
economic impacts (including direct, indirect, and inducted activities) in terms of employment,
employee compensation, output, and model-derived State and local tax generation (adjusted for
consistency with the fiscal analysis).
Conduct a literature review to update and expand on the Analysis of the Value of Economic
Development and Potential Employment Growth in the City report and summarize the value of
innovation economy growth and development (e.g., diversification, quality of life, tax revenue, and
competitiveness). Discuss potential synergies resulting from increased investment and opportunities
focused on the innovation economy, creation of innovation centers or districts, leveraging university
research, improving technology transfer, and growing industry sectors. Discuss qualitative regional
benefits of the proposed Innovation Centers.
Provide a qualitative analysis of economic impacts of the Environmental Impact Report (EIR)
alternatives, predicated on results of initial discussions with the City, as discussed in the Phase 1
Scope of Work.
Produce a technical memorandum with an executive summary of the findings, descriptions of the
quantitative analysis and results, thorough explanations of the assumptions for each scenario,
explanation of the economic impact concept, a discussion of the value of innovation economy growth
and development, and a qualitative analysis of the EIR alternatives.
Task 2: Prepare Fiscal Analysis
Task 2 involves preparing a fiscal impact analysis, with its primary purpose being an evaluation of how
the project can generate a sustainable revenue flow to the City. The analysis includes identifying existing
and potential new sources of revenue that may be necessary to mitigate service cost impacts generated
by the project:
EPS will build on preliminary work in Phase 1 to further evaluate impacts of similarly sized business
and innovation parks on selected cities’ operational budgets to supplement EPS’s own extensive
fiscal impact analysis expertise. This research task will focus on identifying any assumptions (e.g.,
service levels, business-to-business taxable sales) that may require adjustment to better reflect
potential net fiscal impacts to the City’s operating budget at buildout of the proposed innovation
center projects.
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EPS will prepare a fiscal model for the City that reflects identified modifications and current Fiscal
Year (FY) 2014–15 General Fund revenues and expenditures. EPS will ensure the model reflects the
land uses associated with each of the three development scenarios, current values and other analysis
inputs, and buildout assumptions consistent with the EIRs and BAE analysis.
EPS will summarize, in a concise fiscal impact analysis memorandum with supporting appendices,
the research, analysis, and conclusions of the net fiscal impacts of the three development scenarios
under EIR and BAE buildout assumptions. If any development scenario is estimated to produce a net
fiscal deficit, EPS will include suggested modifications to the project assumptions or potential fiscal
mitigation measures (e.g., assessment district, community facilities district for services). The
memorandum will include a qualitative discussion of model components that have the ability to
significantly affect net fiscal impacts. EPS will issue a Draft Fiscal Impact Analysis memorandum for
City review. After receiving all comments, EPS will prepare a Final Fiscal Impact Analysis
memorandum.
Task 3: Provide Meeting Support
EPS will provide meeting support at up to 3 meetings between the Budget and Finance Commission
and the City Council, as well as periodic progress reports and up to 4 check-ins with staff. An
allowance has been established for these meetings, which will require additional time and materials if
meetings exceed the identified level of effort.
Schedule and Budget
Work would begin on June 1, 2015 or completion of Phase I. Initial administrative drafts will be prepared
for Tasks 1 and 2 within 10 weeks of commencing work. Revised reports will be produced within 2
weeks of receipt of comments and feedback on the administrative drafts.
The estimated budget by task is shown below:
Task 1: Conduct Community Economic Impact Analysis
$58,000
Task 2: Prepare Fiscal Analysis
$40,050
Task 3: Provide Meeting Support
$12,0001
Total Budget
$110,050
1 Task 4b is based on assumed attendance at 3 Planning Commission/City Council sessions and
4 informal check-in meetings with City staff. Additional meetings, if requested, will be billed on a timeand-materials basis.
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7.
2015 Hourly Staff Billing Rates
California Offices
Managing Principal
$250–$300
Senior Principal
$300
Principal
$225–$260
Executive/Senior Vice President
$215–$220
Vice President
$195–$200
Senior Technical Associate
$180–$200
Senior Associate
$165–$185
Associate
$145
Research Analyst II
$100–$120
Research Analyst I
$80-$85
Production and Administrative Staff
$80-$85
Billing rates updated annually.
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