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selectsacramento.com

A REGION ON THE RISE:PERSPECTIVES ON ECONOMIC GROWTH

J A N . 1 6 , 2 0 1 9


THANK YOU.

Barry BroomePresident & CEO

Greater Sacramento Economic Council

[email protected] |


@selectsac

Facebook.com/GreaterSac

selectsacramento

Economic & Planning Systems, Inc.T h e E c o n o m i c s o f L a n d U s e

400 Capitol Mall, 28th Floor n Sacramento, CA 95814916.649.8010 n www.epsys.com

PERSPECTIVES ON HOUSING AND ECONOMIC DEVELOPMENT

Folsom Economic Development Corporation

REAL ESTATE ECONOMICS

PUBLIC FINANCE

LAND USE & TRANSPORTATION

ECONOMIC DEVELOPMENT & REVITALIZATION

FISCAL & ECONOMIC IMPACT ANALYSIS

HOUSING POLICY

PUBLIC PRIVATE PARTNERSHIPS (P3)

PARKS & OPEN SPACE ECONOMICS

EPS

Economic & Planning Systems EPS PPT Presentation | 17

PRESENTATION OVERVIEW

▪ Perceived fiscal dynamics of housing

▪ Contributions of housing to economic development initiatives:

– Cultivation of Key Labor Assets

– Support for Bricks and Mortar Retail

– Improved Project Economics


PERCEIVED FISCAL DYNAMICS OF HOUSING

$0Fiscally

Neutral

COMMON PERCEPTIONS


PERCEIVED FISCAL DYNAMICS OF HOUSING

▪ Fiscal Mitigation Measures

– Services CFD

– Fiscal mitigation payments

– Tax Sharing Arrangements

▪ Economic Development Contributions of Housing

– Cultivation of Key Labor Assets

– Support for Bricks and Mortar Retail

– Improved Project Economics

OTHER CONSIDERATIONS

HOUSING CULTIVATES ESSENTIAL LABOR ASSETS

LABOR ASSETS


LINK BETWEEN JOBS AND HOUSING ACCESS

HOUSING CULTIVATES KEY LABOR ASSETS


KEY EMPLOYERS WITHIN THE CITY OF FOLSOM

FOLSOM’S EXPANSION POTENTIAL

Intel Corporation

6,000 Employees

Mercy Hospital

750 Employees

California ISO

600 Employees

350 Employees

SAFE Credit Union

350 Employees

Costco

300 Employees

Micron Technology

Source: City of Folsom; MuniServices LLC. Current as of Dec. 31, 2017


JOBS PER HOUSEHOLD IN FOLSOM

Source: United States Census, Longitudinal Employer-Household Dynamics; California Dept. of Finance.

CITY OF FOLSOM


CITY OF FOLSOM HOUSING PIPELINES

8,500 Single Family Units

2,800 Multifamily UnitsFOLSOM PLAN AREA SPECIFIC PLAN

300 Multifamily UnitsTALAVERA RIDGE

275 Dwelling UnitsTHE ISLANDS

125 Dwelling UnitsIRON POINT SENIOR APARTMENTS

325 Multifamily UnitsTHE PIQUE

Over 13,000 New Dwelling Units Planned within

the City of Folsom

Source: City of Folsom Planning Department as of Dec. 2017.

HOUSING SUPPORTS EXPANSION AND ATTRACTION OF RETAIL USES

SUPPORT FOR RETAIL


THE CHANGING RETAIL LANDSCAPE

▪ Since 2000, the e-commerce share of retail sales advanced from just under one percent to about 9 percent in 2017, reducing demand for retail brick and mortar space.

▪ Not all retail is in decline. Consumer spending is bifurcated, with strong spending on luxury and discount goods.

▪ Vacancy rates in shopping centers with strong demographics, visibility, access, and a compelling tenant mix have been around 2-5 percent, while centers without these attributes have seen vacancy increase to 40-50 percent.

▪ Major retail centers like Folsom Palladio are investing in entertainment, dining, technology, and quality of place to remain competitive.


RETAIL SPENDING PATTERNS

Source: Citylab, “The 2018 Retail Apocalypse, in 6 Charts and a Map”.


HISTORIC RETAIL SQUARE FOOTAGE PER CAPITA

Source: CoStar; California Dept. of Finance.

CITY OF FOLSOM


FOLSOM PLAN AREA SPECIFIC PLAN RETAIL SUPPORT

11,000ANTICIPATED HOUSEHOLDS IN FOLSOM PLAN AREA SPECIFIC PLAN

500 – 800KRANGE OF RETAIL SQUARE FOOTAGE SUPPORTED BY FOLSOM PLAN AREA SPECIFIC PLAN

Source: CoStar; Ca Dept. of Finance; City of Folsom.

Retail demand is a direct result of estimated futurehousehold growth, consumer buying power and spendingpatterns.

ESTIMATED RANGE OF ANNUAL SALES TAX REVENUES$1.35+ M

LAND USE DIVERSITY IMPROVES PROJECT FEASIBILITY

PROJECT ECONOMICS


FEASIBILITY INDICATORS

Residential Office RetailLight

Industrial

COMPARATIVE RESIDUAL VALUE


OFFICE INVENTORY AND VACANCY RATES

Source: CoStar.

CITY OF FOLSOM


HOUSING AND LAND USE DIVERSITY

▪ Integration of appropriate levels of housing improves project economics:

– Balanced communities

– Land use flexibility

– Ability to underwrite lower performing uses – particularly in mixed-use contexts.

Residential Office RetailLight

Industrial


CONCLUSIONS

▪ Fiscal dynamics of new development projects are complex and depend on a number of interrelated variables.

▪ A diversity of residential uses is a critical part of cultivating and attracting needed labor resources.

▪ Commercial and employment-generating uses should be carefully calibrated to demand associated with existing and future residential base and capitalize on mutually reinforcing cycle between residential, retail, and employment uses.

▪ Diversity of project uses is important to support sustainable communities (both economic and environmental).

▪ Existing and potential policy incentives seek to ensure an appropriate balance of housing, retail, and employment uses.

▪ Myriad other considerations, including construction costs, regulatory burdens, and infrastructure finance paradigm.

CALED Economic Snapshot

Ellen Martin, PrincipalEconomic & Planning Systems, Inc.

[email protected]

Sean Fisher, AssociateEconomic & Planning Systems, Inc.

[email protected]

1st Quarter, 2018

FolsomChallenges

*Very little available office space over 10,000 sf

* Larger commercial space will take 18-24 months of lead time prior to occupancy.

* Lack of meeting and venue space to grow tourism occupancy

* Transportation connectivity to Sacramento and the Bay Area

* Availability of housing diversity

* Attracting new businesses from the Bay Area and Silicon Valley

* Available workforce

* Very little available office space over 10,000 sf and larger commercial space will take 18-24 months of lead time prior to occupancy.

Working with developers to build spec office space.Existing and new land designated for office space provides incredible opportunity for businesses looking for strategic

growth of a campus site.

* Lack of meeting and venue space to grow tourism occupancy.

In discussions on expanding conference meeting space and attraction of new events that attract visitors.

Choose FolsomStrategies vs. Challenges

* Transportation connectivity to Sacramento and the Bay Area.

Working with the City and Regional Transit for double tracking and express train to Sacramento.

In final discussions with Luxe Air to provide commuter air service between Mather and the Bay Area.

* Availability of housing diversity.

New housing being built including executive, mixed use, condo’s, multi-family and active adult.


* Attracting new businesses from the Bay Area and Silicon Valley.

Working with GSEC, CORENET, and Commercial Real Estate Brokers.

Developing Entrepreneur Center with co-working space to open in 2019.

* Available workforce

Retained Digital Social Media Influencer to utilize Facebook ads resulting in over 4,000 views of Choose Folsom ads targeted at

millennials and relocations.


https://choosefolsom.com/2018/10/02/top-10-reasons-millennials-are-flocking-to-folsom/

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