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xucrTsTA
Swenson, Karen < kswenson@eaest.com>
Monday, December 23,20L311:35 AM
Garth Mann
peckassoc@comcast.net; Aaron Goforth; David W. Johnson
(djo h nson @co jefferson.wa.us)
RE: Draft SEIS
Economic Analysis of Earnings.docx; Economic Analysis of the Regional Center
Project.docx
Garth - could you take a look at Appendix N and Appendix S on our FTP site (see access instructions below, documents
in the Appendices folder) and clarify if prior reports are superseded by Aaron's reports (which are attached)?
The documents can also be found through a link on the County's website: SEIS Technical Repons here: Laserfiche Web Link
Select "permits" then "case files" then "MLA08-00188 Pleasant Harbor" then "Technical Reports.". See Tab 15 and 15.
Thank you,
llantw Sv,to*vlotv
EII
Karen Swenson, AICP
Senior Planner
2200 Sixth Avenue, Suite 707 | Seattle, WA 98121
206.452.5350 x'1716
kswenson@eaest.com
From : Aa ron Goforth [ma ilto : aa ron @wrighgoh nson I lc.com]
Sent: Monday, December 23, 20L3 10: 19 AM
To: Swenson, Karen
Cc: peckassoc@comcast.net; Garth Mann
Subject: Re: Draft SEIS
I am not sure the author or the date of the attached. lt is not our work.
From: "Swenson, Karen" <kswenson@eaest.com>
Date: Mon, 23 Dec 2013 13:01:53 -0500
To: Aa ron Goforth <aa ron @wrightiohnso n llc.com>
Cc: "peckassoc@comcast.net" <peckassoc@comcast.net>, Garth Mann <Garth.Mann@statesmangroup.com>
Subject: RE: Draft SEIS
Aaron - could you clarify if the Economic Analysis of the Regional Center Project report you drafted supersedes the
attached report? I am unsure of the author or the date, but have been told it was written in June 2012.
I
Thanks,
Karc+!Stltl-trytotu
EI
Karen Swenson, AICP
Senior Planner
2200 Sixth Avenue, Suite 707 | Seattle, WA 98121
206.452.5350 x '1716
kswenson@eaest.com
From : Aa ron Goforth [ma i lto : aa ron@wrightjoh nson llc.com]
Sent: Wednesday, November 06, 2013 4:11 AM
To: Garth Mann; Deckassoc@comcast.net; 'Don Coleman'; Erik Stearns
Cc: Swenson, Karen
Subject: Re: Draft SEIS
Sorry for the delayed response.
Attached is the report that was used with USCIS to gain Regional Center designation. I am not sure what purpose you would
like to use it for but EB*5 job studies do not typically include salary levels.
Aaron
From: Garth Mann <Garth.Mann@statesmanRroup.com>
Date: Mon, 4 Nov 2OL3 2O:4O:39 +0000
To: "@"' <@>,'Don Coleman' <don@pleasantharbormarina.com>, Erik
Stearns <ErikS@Hargis.biz>
Cc: "'Swenson, Karen"'<kswenson@eaest.com>, Aaron Goforth <aaron@wrightiohnsonllc.com>
Subject: RE: Draft SEIS
Craig et al
Please see below in Green:
M. Garth Mann
President & C.E.O
P:403-2564151
M:403-899-9222
F:403-256-6100
7370 Sierra Morena Blvd. S.W
Calgary, Alberta
T3H 4H9
www. statesmanq roup.ca
From : peckassoc@comcast. net [mailto: oeckassoc@comcast.net]
Sent: Monday, November 04,20L37234 AM
To: Garth Mann
Subject: Draft SEIS
2
Garth,
Here is the list of outstanding items prepared by Karen (and supplemented by me) that address deficiencies to
be provided to EA to complete the Draft SEIS for Pleasant Harbor:
l. Energy Demand Memo (short memo to accompany the conceptual load spreadsheet previously
provided by Hargis on 7-3-13). The spreadsheet must be updated to reflect the revised Stage/Phase
plan that re-schedules treatment plant for later phases and combines the removal of Reunion House
and Harbor View House into re-designed Maritime Building
We provided to Karen Swenson the report from the Energy Firm of FAILSAFE CANADA lNC. who detailed the
Greenhouse Gas Emissions Report prepared May 2012 which is still current in terms of the source emissions
relative to the phased development. The phasing plan should not materially impact the end result except
positively through the elimination of the Reunion House and Harbor View House.?
2. Energy Supply Report/Memo from Scott (STEVE) Taylor at the PUD regarding transmission capacity and
transformers on- and off-site.
Steve Taylor of the PUD has been asked to provide the Transmission capacity including Transformers
based on the Phasing Plan.
I have not been successful in having them provide this as an update to the phasing plan working with
Eric and Team @ Hargis Eng..
Please see if you or Eric c/o Hargis can describe for Steve c/o the PUD #1 to complete this exercise for
us.
3. Clarification of compliance with the first part of BoCC 53(C)- "The developer shall commission a study of the
number of jobs expected to be created as a direct or indirect result of the MPR that earn 80% or less of the
Brinnon area average median income (AMl).'The 2012 Jobs Study,Summary of Pleasant Habor lmpacts: Job
Creation and Value Added to National Economy, did not include salary levels of proposed jobs and/or
comparison the the Brinnon AMl. Garth noted that "Aaron Goforth of Wright Johnson LLC would address the reports
for accuracy and proposed salaries."
This report had been completed by Aaron and his team at Wright Johnson LLC.
I am copying this emailto Aaron who would be pleased to send this information from their various reports for USCIS
approvals as a Rural
Regional Center.
Please direct those responsible for this work to proceed immediately to complete these items
Thank you.
Craig
3
\UTlRIGHT JOHNSON
prlfessional authors dnd analysts
An Economic Analysis of Earnings
Pursuant to Jefferson County Board of County Commissionets' Condition
639 for the Pleasant Harbor Master Planned Resort (IvIPR)
By
Wright Johnson ,LLC
Novembet 201,3
205 Worth Avenue, Suite 201, PaIm Beach, FL 33480
Telephone: (561) 282-6099
Email: info@wrightj ohnsonllc. com
1. Introduction
Wright Johnson, LLC, ("Sry") has been tetained to perform an economic assessment of earnings of
the Pleasant Harbor Master Planned Resort (IVIPR) in conformity with the Jefferson County Board
of County Commissioners' condition 639, which states:
"The developer shall commission a study of the numbet of jobs expected to be created as a
direct or indirect result of the MPR that earn 80o/o or less of the Brinnon area
^yeragemedian income (AMD. The developer shall ptovide affordable housing (e.g., no more than
30o/o of household income) for the Brinnon MPR workers roughly proportional to the
number of jobs created that earn B0o/o or less of the Brinnon area AMI. The developer may
satis$, this condiuon tfuough dedication of land, payment of in lieu fee, ot onsite housing
development."
To accomplish this, the analysis estimates the number of direct and indirect jobs associated with the
project, as well as average wages associated with these jobs. The analysis u 'lizes the RIMS II model
to estimate these jobs and wages as discussed below.
2. Methods & Assumptions
The analysis considers only the impacts of the construction of the MPR project, which will operate
within the following industry clusters:1
Non-Residential Building Consttuction - NAICS code 2362: This industry comprises
establishments primarily responsible for the construction (including new work, additions, alterations,
maintenance, and repairs) of commercial and institutional buildings and related structures, such as
stadiums, grain elevators, and indoor swimming facilities. This industry includes establishments
responsible for the on-site assembly of modular or prefabricated commercial and institutional
burldings. Included in this industry are commercial and institutional building general contractors,
commercial and institutional building for-sale builders, commercial and institutional buitding design-
build fums, and commercial and instirutional building project construction management Ftms.
Utility System Construction - NAICS code 2371: This industry comprises establishments
primaniy engaged in the construction of water and sewer lines, mains, pumping stations, treatment
plants, and storage tanks. The work performed may include new work, reconstruction, rehabiJitation,
and repairs, Specialty trade contractors are included in thrs group if they are engaged in activities
primarily related to water, sewer line, and related strucfures construction. AII structures (including
buildings) that are integral parts of water and sewer networks (e.g., storage tanks, pumprng stadons,
water tteatment plants, and sewage treatment plants) are included in this industry.
A summary of the proposed project costs is as follows
1 NAICS code definitions provided by the U.S. Census Bureau.
Page l1
Building Construction: Construction of project buildings will last approximately twenty-eight (28)
months and the total hard construction costs of the buildrngs will be $9,854,600 Qn 2013 dollars).
As the current RIMS II muluphers are based on 2010 data, we must deflate the construction
expenditures to 2010 dollars. Accordrng to the Turnet Construction Building Cost Index,
construction costs have been on a slight inctease from 2010 through 2073. The cost index in 2010
was 799 vs. the 2nd quarter 2013 cost index of 8592, which means the costs of construction is higher
in 2013 than 2010. Therefore, the construction costs for this project will need to be further reduced
to 2010 dollars.
Quarter lnder 496
2nd Quarter2013 859 1.18
1st Quarter 2013 849 1.19
4th Quarter2Ol2 839 O.84
3rd Quarter2Ol-2 832 O.73
2oL2
20l.L
2010
2009
2008
2007
2006
2005
2o,o'4
2003
2002
2001
2000
830
812
799
832
908
8s4
793
7L7
655
621
619
6l_3
5S5
2.t
1.6
"4.O
€.4
6.3
7.7
10.6
s.5
5.4
o.3
1.O
3-O
4.4
Trner
P age l2
o Maritime Village $7,845,500
o Pleasant Harbor Bistro $501,500
o Reunion House $753,800
o Harbor House $753,800
TOTAL CONSTRUCTION COSTS $9,854,600
Summarv of fstimated tluildi Construction Costs
2 www.tumerconstruction.c om f cortent f files/Costlndex201 3Qtr2.pdf
Description Amount
2013 Dollars 2010 Dollars
$9,854,600 fig,724,630
To convert this figure to 2010 dollats we use the 201,3 index of 859 and divide it by the 2010 index
of 799. Thisgrvesusafigure of 859/799 = 1.08. Toconvertthe$9,854,600in2013dolIars to201,0
dollars, the 2013 expenditure is divided by 1.08, to yield $9,724,630.
Infrastructure Construction; Infrastructure construction will last approximately twenty-seven (27)
months and the total hard construction costs of the infrastructure will be $10,756,900 (in 2013
dollars). The current RIMS II mulupliets ate from 2010 therefote we must deflate the expenditures
to 2010 dollars.
To convert this figure to 2070 dollars we use rbe 2013 index of 859 and divide it by the 2010 index
of 799. This gives us a figure of 859/799 = 1.08. To convert the $10,756,900 in 2013 dollars to
2010 dollars, the 2013 expenditure is divided by 1.08, to yield $9,960,093.
Given these construction costs, the RIMS II model can be used to estimate direct and indirect
employment associated with the project.
Page l3
. US Highway l0l
o Black Point Road
. WDFW Boat Access Road
o Maritime Area -
o Water
o Wastewater Reclamation Plant (WRP) -
o Wastewater Reclamation Plant (WRP) - Vertical
$325,125
$186,735
$169,500
$2,348,140
$1,064,000
$2,561,400
$4,102,000
Summa oI' listimatcd I nfrastructu rc nstruction Costsn
2013 Dollars 2010 Dollars
$10,756,900 $9,960,093
Building Construction Expenditure20T3 Dollars vs. 2010 Dollars
Infrastructure Construction Expenditure 2013 Dollars vs. 2010 Dollars
Amouut
3. Find*gr & Calculations
Shown in the chart below are the actual RIMS II final demand and employment multipliers for
Jeffetson County, WA. These multipliers are used to estimate employment associated with the
project.
RIMS II Multipliers (2002/2010)
Total Multipliers for Output, Earnings, Employment, and Value Added by Detailed Industry
efferson WA
Buildins Construction
Lookrng at the construction sector G\IAICS code 2362), the final demand multiplier is 9.7481 and
the employment multipliet is 1.5147. The final demand multiplier is used to determine the total
number of jobs produced based on the expenditures for construction of the development buildings.
This figure is $9.125 million (in 2010 dollars). Therefore there would be $9.125 times 9.7481, or
88.95 jobs suppoted by this project, including direct and indirect jobs.
The employment multiplier is 7.5747, which means that for every 1 direct iob, there arc 7.5747 total
jobs. Hence for every 1 direct job, there are 0.5747 indkect jobs. Of the total 88.95 jobs, there are
58.72 direct jobs and 30.22 ndtrect jobs.
Construction of Infrastructure
Looking at the infrastructure construction sector (I{AICS code 2377), the final demand multipliet is
9.7 481 and the employment multiplier is 7.5747 . The final demand multiplier is used to determine
the total number of jobs produced based on the expenditures for construction of the development
infrastructure. This figure is $9.960 million (in 2010 dollars). Therefore there would be $9.960
times 9.7481, or 97.09 jobs suppotted by this project, including direct and indirect jobs.
The employment multiplier is 1.5147, which means that for every 1 direct job, there are 7.5747 total
jobs. Hence for every 1 direct job, there are 0.5747 indirect jobs. Of the total 97.09 jobs, there are
64.10 direct jobs and 32.99 nduect iobs.
Tables 3-1 and 3-2 show the economic impact of the construction expenditures for the 20 maior
industrial classifications in the RIMS II input/output model.
Page l4
Multipliet
Final Demand Direct EffectIndustryOutput
(dollars)
Earnings
(dollats)
Employment
(jobs)
Value-added
(dollats)
Earnings
(dollars)
Employment
(iobs)
Construction
(230000)
1.4324 0.4448 9.7481 0.7570 1.3304 1.5147
Industry group
Agticulture, fores try, Frs hLrng
Mining
Utilities
Construction
Manufacturing
Wholesale tade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Professional, sciendFtc, s ervices
Management of companies
Administrative and waste management
Educational services
Health care and social assistance
Arts, entertainment, and recreation
Accommodation
Food services and drinking places
Other seryices
Households
Total 186.04 $ 27,340,773 $ 8,488,884
Employment
0,29
1,.26
0.56
1,23.39
4.88
1.1,3
1,9.54
1.24
0.88
1.05
4.60
3.05
0.02
1.85
1.16
7.18
1.1,1
1.50
6.22
3.60
1,.41
Output
43,895 $
208,023
255,735
1.9,774,420
1,154,626
250,010
7,757,703
746,952
198,481
322,532
7,376,846
492,943
5,725
122,142
64,888
792,474
49,620
741,227
377,878
484,752
Eatnings
9,542
43,895
45,803
6,410,559
217,566
72,522
547,732
55,346
47,712
66,797
53,437
1g8,g3g
1,908
47,712
20,993
328,257
77,176
40,078
120,234
141,227
71,457
$
Table 3-1 shows that there will be a total of 186.04 new jobs created from the construction of the
ptoject buildings and infrastructure. Total output will increase by about $27.34 million, while total
household earnings will increase by about $8.49 million.
Table 3-2 shows that output per new worker for the construction sector would be about $155,394,
with average annual earnings of about $51,953. For all newu/orkers, the coffesponding figures are
fil,46,963 and $45,630.
Page l5
Table 3-L. Increase in Employment, Output, and Earnings for $19.085 million
(2010 dollarsj in Construttion Expenditures
Industry gtoup
Agriculture, fores try, Frs hing
Mining
Utilities
Construction
Manufacruring
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Pto fessional, scientiFtc, services
Management of companies
Administrative and waste management
Educational services
Health care and social assistance
Arts, entertainment, and recreation
Accommodation
Food services and ddnking places
Other seryices
Households
Total 186.038$146,963$45,630
Employment
0.294
r.262
0.555
1,23.392
4.884
1..t26
19.54r
1.237
0.878
1.053
4.603
3.050
0.021
1.849
r.757
7.776
1.772
1.496
6.220
3.603
7.470
Output/
Employee
$ 149,351 $
164,902
460,497
755,394
236,420
222,034
gg,g50
778,827
226,087
306,1.59
286,070
759,323
272,727
66,047
56,106
109,043
42,345
94,388
60,755
734,534
Earnings/
Employee
32,467
34,796
82,474
51,953
44,549
64,407
29,030
44,753
54,348
63,406
1,7,609
67,952
90,909
25,900
79,752
45,745
74,659
26,786
79,331
39,795
7,792
4. Conclusion
The purpose of the analysis is to estimate the numbet of direct and indirect jobs associated with the
MPR ptoject and determine
^verage
wages corresponding to these jobs. Given these estimates, as
summarized in Table 3-2 above, the analysis can determine the number of jobs associated with the
project that will earfl an ayet^ge wage of 80o/o or less of the Bdnnon ^rea ayet^ge median income
(AMr).
The Brinnon are
^vetage
median income is esumated ^t fi33,0773 and 80% of this AMI amount is
estimated atfi26,467. Table 3-2 shows thatan estimated L5 iobs will have ^vetage earnings of 80o/o
of less of the Brinnon area AML Thrs includes direct and indtect jobs associated with the MPR
project and is summarized below, with average wages for each rndustry group.
Page l6
3 U.S. Census Bureau, 2007-20'11 American Community Survey. Data for Brinnon, Washington.
Per New Wotket for $19.085 million (2010 dollats) inOutput and
Construction
Total Direct and Indirect obs at or Below the Brinnon Atea AMI
5. About RIMS II Final Demand Methodology
Industry group
Real estate and rental and leasing
Administrative and waste management
Educational services
Atts, entertainment, and recreation
Food services and &inking places
Total
Employment
4.60
1.85
1.76
1,.17
6.22
15.00
Eamings/
Employee
$ t 1,609
25,900
78,752
14,659
79,337
$ 17,303
The following material has been condensed from the RIMS II User Handbook
Introduction and General Comments
Effective planning for public- and private-sector projects and programs at the State and local levels
requtres a systematic analysis of the economic impacts of these projects and programs on affected
regions. In turn, systematic analysis of economic impacts must account for the intet-industry
relationships within regions because these relationships largely determine how regional economies
are likely to respond to project and program changes. Thus, regional input-output (I-O) multipliers,
which account for inter-industry relationships within regions, are usefi.rl tools fot conducting
regional economic impact analysis.
In the 1970s, the Bureau of Economic Analysis (BEA) developed a method for estimating regional
I-O multipliets known as RIMS fi.egional Industrial Multipliet System), which was based on the
wotk of Garnick and Dtake. In the 1980s, BEA completed an enhancement of RIMS, known as
RIMS II (X.egional Input-Output Modeling System), and published a handbook for RIMS II users.
In 7992, BEA published a second edition of the handbook in which the multipliers were based on
more recent data and improved methodology. In 1997, BEA published a third edition of the
handbook that provides more detail on the use of the multiphers and the data sources and methods
for estimating them.
RIMS II is based on an accounting framework called an I-O table. For each industry, an I-O table
shows the industrial distribution of inputs purchased and outputs sold. A typical I-O table in RIMS
II is derived mainly from two data sources: BEA's national I-O table, which shows the input and
ouQut structure of neady 500 U.S. industries, and BEA's regional economic accounts, which are
used to adjust the national I-O table to show a region's industrial structure and trading patterns.
Using RIMS II for impact analysis has several advantages. RIMS II multipliers can be estimated for
any region composed of one or more counties and for any industry, or group of industries, in the
national I-O table. The accessibility of the main data sources for RIMS II keeps the cost of
estimating regional multiphers relatively low. Empirical tests show that estimates based on relatively
expensive surveys and RIMS Il-based estimates are similar in magnitude.
BEA's RIMS multipliers can be a cost-effective way for analysts to estimate the economic impacts of
changes in a tegional economy. However, it is important to keep in mind that, like all economic
Page l7
impact models, RIMS provides approximate order-of-magnitude estimates of impacts. RIMS
multipliers are best suited for estimating the impacts of small changes on a regional economy. For
some applications, users may want to supplement RIMS estimates with information they gather
from the region undergoing the potential change. To use the multipliers fot impact analysis
effectively, users must provide geographically and industrially detailed information on the initial
changes in output, earnings, or employment that are associated with the project or program under
study. The multipliers can then be used to estimate the total impact of the project or program on
regional output, earnings, and employment.
RIMS II is widely used in both the public and private sector. In the public sector, for example, the
Department of Defense uses RIMS II to estimate the regional impacts of miJitary base closings.
State transportation departments use RIMS II to estimate the regional impacts of airport
construction and expansion. In the pdvate-sector, analysts and consultants use RIMS II to estimate
the regional impacts of a variety of projects, such as the development of shopping malls and sports
stadiums.
RIMS II Methodology
RIMS II uses BEA's benchmark and annual I-O tables for the nation. Since a patticular region may
not contain all the industries found at the national level, some direct input requirements cannot be
supplied by that region's industries. Input requirements that are not produced in a study rep;ion are
identified using BEA's regional economic accounts.
The RIMS II method for estimating regional I-O multipliers can be viewed as a three-step process.
In the fitst step, the producer portion of the national I-O table is made region-specific by using six-
digrt NAICS location quotients [-ar. The LQs estimate the extent to which input requirements are
supplied by frms within the region. RIMS II uses LQs based on two types of data: BEA's personal
income data (by place of residence) ate used to calculate LQs in the sewice industries; and BEA's
wage-and-s alary data (by place of work) are used to calculate LQs in the non-service industties.
In the second step, the household row and the household column from the national I-O table are
made region-specific. The household row coefficients, which are derived from the value-added row
of the national I-O table, are adjusted to reflect regional earnings leakages resulting from individuals
working in the region but residing outside the region. The household column coefficients, which are
based on the personal consumption expenditute column of the national I-O table, are adjusted to
account fot tegional consumption leakages stemming from personal taxes and savings. In the last
step, the Leontief inversion approach is used to estimate multipliers. This invetsion apptoach
ptoduces ouq)ut, earnings, and employment multipliers, which can be used to trace the impacts of
changes in final demand on and indirecdy affected industries.
Accuracy of RIMS II
Empirical evidence suggests that RIMS II commonly yields multipliers that are not substantially
drfferent in magnitude from those generated by regional I-O models based on relanvely expensive
surveys. For example, a comparison of 224 ndustry-specifrc mulupliers ftom survey-based tables fot
Colotado, Washington, and West Virgirua indicates that the RIMS II average multipliers
overestimate the average multipliers from the survey-based tables by approximately 5 percent. For
the majodty of individual industry-speciFrc multipliers within these states, the diffetence between
Page l8
RIMS II and survey-based multipliers is less than 10 percent. In addition, RIMS II and srrvey
multipliers show statistically sirnilar distributions of affected industries.
Advantages of RIMS II
There are numerous advantages to using RIMS IL First, the accessibility of the main data soutces
makes it possible to estimate regional multipliers without conducting telatively expensive surveys.
Second, the level of industrial detail used in RIMS II helps avoid aggtegation ertors, which often
occur when industries are combined. Third, RIMS II multipliers can be compared actoss ateas
because they are based on a consistent set of estimating ptocedures nationwide. Fouth, RIMS II
multipliers are updated to reflect the most recent local-atea wage-and-salary arrd personal income
data.
Overview of Different Multiplierc
RIMS II provides users with five types of multipliets: final demand multipliers for output, for
earnings, and for employment; and direct-effect multipliers for earnings and for employment. These
multrpliers measure the economic impact of a change in final demand, in earnings, or in employment
on a region's economy.
The final demand multipliers for output are the basic multipliers from which all other RIMS II
multipliers are derived. In tlus table, each column entry indicates the change in output in each row
industry that results from a $1 change in final demand in the column industry, The impact on each
row industry is calculated by multiplying the final demand change in the column industry by the
multiplier for each row. The total impact on tegional output is calculated by multiplying the final
demand change in the column industry by the sum of all the multipliers for each tow except the
household row.
RIMS II provides two types of multipliers for estimating the impacts of changes on earnings: final
demand multipliers and direct effect multipliers. These multipliers are derived from the table of
final demand output multipliers.
The final demand multipliers for earnings can be used if data on final demand changes are available.
In the final demand earnings muluplier table, each column entry indicates the change rn earnings in
each row industry that results from a $1 change in final demand in the column industry. The impact
on each row industry is calculated by multiplying the final demand change in the column industry by
the multipliers for each row. The total impact on regional earnings is calculated by multiplying the
final demand change in the column indusry by the sum of the multipliers for each row.
Employment Multipliers
RIMS II provides two types of multipliers for estimating the impacts of changes on employment:
final demand mulupliers and direct effect mulupliers. These multipliers ate derived from the table
of Frnal demand output multipliers.
The final demand multipliers for employment can be used if the data on final demand changes ate
available. In the final demand employment multiplier table, each column entry indicates the change
in employment in each row industry that results from a $1 million change in final demand in the
column industry, The impact on each row industry is calculated by multiplying the final demand
Page l9
change rn the column industry by the multiplier for each row. The total impact on regional
employment is calculated by multiplying the final demand change in the column industry by the sum
of the multipliers for each row.
The direct effect multipliers for employment can be used if the data on the initial changes in
employment by industry are available. In the direct effect employment multiplier table, each entry
indicates the total change in employment in the region that results from a change of one job in the
row industry. The total impact on regional employment is calculated by multiplyrng the initial
change in employment in the row industry by the multiplier for the row.
Choosing a Multiplier
The choice of multiplier for estimating the impact of a project on output, earnings, and employment
depends on the availability of estimates of the initial changes in final demand, earnings, and
employment. If the estimates of the initial changes in all three measures arc avatfable, the RIMS II
user can select any of the RIMS II multipiiers. In theory, all the impact estimates should be
consistent. If the available estimates are limited to initial changes in frnal demand, the user can select
a frnal demand multiplier for impact estimation. If the available estimates are limited to initial
changes in eamings or employment, the user can select a direct effect multiplier.
The EB-5 regulations ptovide that "jobs created indirectly" by a regional center- affitated business
may be ctedited to foreign investors who made a quali$ring investment in the business. To show
this job creation, "reasonable" methodologies may be used. 8 CFRS204.6(-X7). The RIMS II
input/output model has been tecognized by the USCIS as an acceptable methodology for showing
job creation resulting from a regional center- affiliated investment project.
Page 110
wRTGHTJOHNSON
professional authors And analysts
An Economic Analysis
Of the Regional Center Project Encompassing the Counties of Clallam,
Jefferson and I(itsap of the State of lTashington
Final Report
Prepared for
Puget Sound Regional Center, LLC
By
STnght Johnson ,LLC
August 201.3
205 Worth Avenue, Suite 201, Palm Beach, FL 33480
Telephone: (561) 282- 6099
Email: info@wrightiohnsonllc.com
I
August 9,2013
1. Executive Summary
This impact economic analysis report was prepared to evaluate the economic impacts of
a specific project located withrn a three-county ^rea within the State of $Tashington,
which is being developed undet the sponsorship of the prospective, USClS-approved,
Puget Sound Regional Center ("PSRC"). The project involves the construction of a
master-planned resort community located in Brinnon, Washington. This project's
activities will be collectively teferred to as "Pleasant Harbor Marina and Golf Resort".
The Pleasant Harbor Marina and Golf Resort will result in the cteation of 27i,5 new jobs
from the construction of the development.
The Pleasant Harbor Marina and Golf Resort will increase investment in the tegion by a
one-time amount of $29,035,39L. This impact analysis finds that the ptoject will
generate sigruficant and posiuve economic benefits for the regional economy.
The Pleasant Harbor Marina and Golf Resort would result in annual gtowth in the
regional economy by a garn of $9.6931000 in regional household earnings.
The regional economy will experience incteased need for business services of $1.7231000
annually.
The regional economy wiil expedence annual increased demand on utilities of $1471000.
Increased demand for maintenance and construction on an annual basis will be
$19,186,000.
The regional economy will experience increased demand on new supplier and vendor
links with manufacturers of $1,506.000.
Individual investors in the Pleasant Harbor Marina and Golf Resort will be assigned 12.6
jobs each. This project provides enough jobs to meet or exceed the requirements of the
EB-5 program.
The following chart summadzes the total permanent new jobs fot construction of the
project. These figures assume that the expenditures for the project given in this table ate
met.
a
a
a
a
a
a
a
a
2
August 9,2013
o
a
Proiect (with
NA/CS Code)
Proiected
Expenditure/Revenue
(in 2010 dollars)
($ millions)
RIMS ll Final
Demand
Multiplier
Total Number
of New Direct
Jobs Created
Total Number
of New
lndirect Jobs
Created
Total Number
of New
Permanent
Jobs Created
41.7 102.1
Non-Residential
Building
Construction
(NATCS 2362)
$9.1 25 1 1.1851 60.4
'l 1 .1851 65.9 45.54 111.4
Utility System
Construction
(NATCS 2371)
$9.960
Grand Total 2'.13.5
Note: Expenditures/Revenue within this chart have been reduced to reflect 2010 dollars
J
August 9,2013
Table A. Summary of Employment Projection for the Pleasant Harbor Marina and Golf Resort
TABLE, OF CONTE,NTS
1. Executive Summary
1-1 Introduction.
1-2 Industry Cluster DeFrniuons
1-3 Discussion of County Grouping Selected based on Commuter Data
1-4 Effect of Household Earnings, Demand for Business Services, UtiJities, Maintenance and
Construction, and New Supplier/Vendor Relationships with Manufacturers. .... ............7
1-5 Discussion of Unemployment... .......9
2. Methods & Assumptions 10
r0
r0
I5
l5
r6
17
18
26
30
2-1 Assumpuons
2-2 Simulation Inputs
EXHIBIT 1 - Unemployment rates in the Project Region
2
5
6
6
2-3 RIMS II Final Demand and Employment Multipliers
2-4 Calculation of Employment Results Using Final Demand Multiplier...
2-5 Guidelines and Methodology for Construction Employment Creation
2-6 Economrc Impacts of Pleasant Harbor Marina and Golf Resort......
2-7 Yeifrcation of Inputs
3. About RIMS II Final Demand Methodology..............
4
August 9,2013
1-1 Introduction
Wnght Johnson, LLC, ('\U') has been retained by Puget Sound Regional Center ("PSRC") to
perform an economic assessment of a planned investrnent of the construction of a specific ptoject
located within the State of Washington. The following industry clustets were analyzed as part of this
project:
1,. Non-Residential Building Construction - NAICS 2362
2. Utility System Construction - NAICS 2371
PSRC is proposing an EB-5 tegional center with a geographic area encompassing the following three
contiguous counties within the State of Washington: Jefferson, Clallam, and l(itsap. . !U analyzed
colnmuter data to determine cornmuter patterns for the workforce for the three affected and
contiguous counties. Based on information provided by PSRC, WJ performed an analysis for the
tatget industry economic clustets in the proposed project specific geographic areas. RIMS II was
utilized.
The focus of the study is analyzing the Regional Center impacts of the construction of a master
planned resort community located in Bdnnon, \X/ashington within the county ofJefferson.
WJ used RIMS II to model the total economic impact associated with vadous levels of site
investment employment. To quantify the net economic impact (direct and indirect) of the
development, RIMS II modeled the following direct effects:
a Direct Effects of construction employment, household earnings, taxation and output
WJ examined the project provided by PSRC using a multi-industry sector, segregated-region model.
Using this model, !(/J was able to develop independent forecasts for the proposed use of the project.
This segregation of forecasts allowed IU/RIMS II to capture the total net effects of the proposed
target industry. By analyzrne the regional developments with different underlying assumptions for
the specifrc industries, WJ established a realistic prediction of a potential outcome.
The RIMS II economic model employed for the economic and job creation impact assessment
study, forecasts the economic impact a specific event will generate thtoughout a determined atea -
the three counties within Washington. Ovet time, competitive pressures emerge and then tend to
revert back to equihbrium. The ptocess, in that way, depicts the so-called "ripple-effect" impacts
economic changes have on a region. In this case, the initial economic stimulation reverberates
through the PSRC economy spreading outward from the site of the new investment and business
activity and across the State of Washington and the nation. Eventually the new waves of the
economic activity are absorbed into the larget economy creating a new level of economic
equilibrium. In the long run, the ptoject will materialTy alter the PSRC geographic area by the
substantial amount of new investment and related business development activities, including a
corresponding higher level of output, taxation, investment, employment and household earnings in
the regional economy. This report is intended to demonstrate the increased economic impacts
within the PSRC region.
The proposed Pleasant Harbot Marina and Golf Resort will require a total expenditure of
$29,0351391 to provide for construction for the development. $8.5001000 of the total investrnent
5
August 9,2013
will be through EB-5 investor funds
1-2 Industry Cluster Definitionsl
Non-Residential Building Construction - NAICS code 2362: This industry comprises
establishments primarily responsible for the construction (including new work, additions, alterations,
maintenance, and repairs) of commercial and institutional buildings and related structures, such as
stadiums, grarn elevators, and indoor swrmming facilities. This industry includes establishments
responsible for the on-site assembly of modular or ptefabricated commercial and institutional
buildings. Included in this industry are commercial and institutional building genetal conttactors,
commercial and institutional burlding for-sale builders, commercial and rnstitutional building design-
build fums, and commercial and institutional buildrng project construction management ftms.
Utility System Construction - NAICS code 2371: This industry comprises establishments
primarily engaged in the construction of watet and sewet lines, mains, pumping stations, treatment
plants, and storage tanks. The work performed may include new work, teconstruction, tehabilitation,
and repairs. Specialry ftade contractors are included in this gtoup if they are engaged in activities
primarily related to water, sewer line, and related structures construction. All structures (including
buildings) that are integtal pats of water and sewer networks (e.g., storage tanks, pumping stations,
water treatment plants, and sewage treatrnent plants) are included in this industry.
1-3 Discussion of County Grouping Selected based on Commuter Data
To determine the appropriate size of the study region, WrightJohnson uses U.S. Census Buteau data
on comlnuting patterns to approximate the regional center's sphere of economic influence. Using
data on work site and place of residence at the county level, we examined each of the counties
included in the PSRC proposal to calculate where the pteponderance of workers lives in each
county, ranking them by absolute numbet of commuters to the county. A cutoff thteshold was
determined fot each ranked list of wotker-supplyi"g counties; lists were truncated at the cumulative
9570 level of all commuters. Below a 90o/o level will exclude areas that are significantly affected by
the proposed project.
Commuting pattems tend to be more spatially concentrated than the flow of goods, which have
much wider dispersion into and out of the region. However, a ttadeoff must be made between
capturing the indirect economic effects of trade and the induced economic effects of increased
consumer spending.
An important distinction must be made between the regional center's composition and the
composition of the "study region," the area that is affected by economic activity in the proposed
regional center. Because of the interdependence of economic activities, investments within the
regional center will have impacts beyond-and potentially fat beyond-their borders2.
I NAICS code definitions provided by the U.S. Census Bureau
2 USCIS has interpreted that while the regional center's EB-5 capital investment activity may produce a legitimate
economic benefit outside its formal jurisdictional regional ceoter boundaries, the data set used to estimate iob creation
should fit withh the intended impact of the capital investment proiect. !7here appropriate, regional data should be used
6
August 9,2013
Considerauon must be given to the sizing of the study region so that important regional effects are
not neglected in the analysis. If a region is sized too small, much of the effect of a project will be
obscured as expenditures on goods originating outside the region (known as "leakages") diminish
the impacts. Conversely, if. a region is sized too large, the economic multipliers might be overstated
and the ability to claim final demand will be diminished.
.WJ analyzed the commuting patterns for the project location.
The combined percentage of wotkets from Jefferson County, Clallam County and I(tsap County,
WA that commute into Jefferson County is 96.980/o where the project will be located.
U.S. Census Bureau, County-to-County Work Flows.
(http://www.census.gov/population/www/cen2000/commuting/index.html#WA)
1-4 Effect of Household Earnings, Demand for Business Services, Utilities,
Maintenance and Construction, and New Supplier/Vendor Relationships v/ith
Manufacturers
If the project was to be constructed at the stated capacities given in this report within two and ahalf
years of the date of tlus report, the economic impact as measured by household earnings, demand
for business services, utilities, maintenance and repair, and new supplier and vendor relationships is
summarized in the chart below.
Category Project Total
Household income from:
Construction $9,693,000
as the basis for a regional center's job creation aoalysis in keeping with 8 CFR 204.6(m)(3)(i). It is understood that
USCIS may not accept statewide data or data from a broader area outside a regional center as suitable for the job
creation analysis when regional data is readily available that focuses solely on an RC's geogaphic area. However, if the
prospective impacts of the capital investment proiect provided in the project's business plan and associated economic
analysis indicate that a broader geographic area should be considered, USCIS will do so. (Sce, USCIS "EB-5 Immigrant
Investor Program Stakeholder Meeting, October 74, 2010" slides (?DF version of document downloaded November 19,
2010).
7
Jefferson Co., Clallam Co., and Kitsap Co
Rest of Washington
AII Other
Total
9,426
244
50
9,720
96.98%
2.51%
0.51%
100.00%
August 9,2013
Commuting to Jeffetson County
Atea Employment Share
Summary Measutes of Economic for the
Total the above category $9.693,000
Demand (output) for:
Professional and business support services $1,723,000
Utllities $147,000
Maintenance and repair construction $19,186,000
Supplier/vendor links with manufacturers $1,506,000
Total these 4 categories fi22.562,000
Household Eamings (Labor Income)
The jobs created by the vadous components of the regional center will subsequendy create new
sources of household income. The total household income ftom the project will be $9.69 million.
This income calculation comes ftom the RIMS II input-output model, which measures the average
income per job by industry. The model calculations are based on the types of jobs that will be
created vdthin the regional center, with indirect impacts allocated based on the types of commodity
inputs required by the businesses that would potentially locate in the regional center.
Demand for Business Services, Utilities, Maintenance and Construction, and New
Supplier/Vendor Relationships Created with Manufactuters
The total economic impact of the regional center ftom the supplier putchases and business
relationships for the regional center will create apptoxrmately $22.56 million in additional econornic
activity across the region. These supplier purchases are calculated from the indirect increase in
output generated by the RIMS II model. It should be noted that some of these supplier industries
might potentially locate within the tegional center, and their economic output is included in this
total.
The estrmate of supplier purchases is based on the commodity data in the RIMS II input-output
model. Thrs data specifies the amount and type of commodity input needed to maintain specific
tlpes of business operations. The model estimates the suppher purchases based on the types of jobs
and number of jobs that will be created within the regional center. In addition, the model allocates
the supplier purchases to businesses within the region, based on trade flow data from the U.S.
Bureau of Economic Analysis.
The regional center will create demand fot business services including, professional services, and
business services and support services. The impact of this activity totals about $1.72 million
annually.
8
August 9,2013
Utilities include services such as electricity, natural gas, and water and sewer facilities. The economic
impact on utiJity services totals about $0.15 million.
Maintenance and repair seryices include some building and construction activity on existing
buildings. The regional center would create an economic impact of about $19.19 million within these
sectors in the region. Because most of the construction activity is either upfront during building
construction or integrated into repair and maintenance services, the economic impact for
construction sectors is minimal on an ongoing basis.
New supplier/vendor relationships with manufacturers would create an economic impact of about
$1.51 million. These activities include purchases of locally manufactured goods plus purchased
materials for construction, plus any locally produced materials used in food serr.ices.
1-5 Discussion of Unemployment
The following graph summarizes a comparison of the Regional and National unemployment levels
for 2012 through June 2013. Using a weighted ^ver^ge of the non-seasonally adjusted
unemployment rate we find that the overall project tegion remains above the US as a whole. The
June 2013 US unemployment rate ended ^t7.6oh, whereas the regron ended at8.5oh. For a more
detailed look at the unemployment rates within the region, see the attached Exhibit 1 -
Unemployment Rates in the Project Region.
9
t2.o%
70.0%
8.0%
6.0%
4.0%
2.0%
o.0%
,J oA of, ,"* r"d .... C sf st'
-USArRegion
August 9,2013
2. Methods & Assumptions
2-1 Assumptions
Fot the project, WJ examined the economic effects of site development. WJ systematically reviewed
each set of assumptions used to properly customize the sector ouQuts that make up the set
maftices. In the following assumptions, WJ applied specific sector data tesulting in a very detailed,
realistic and logical range of Iikely outcomes.
The tables within this analysis show the expected spending as well as increases in employment and
household earnings for ongoing operations. Additionally they show dollat output generated and
Iocal state and fedetal tax revenues.
The definition of "direct jobs" used in this report should not be confused with the concept of direct
job creation measurable by Forms I-9, payroll records or other similar documentadon as set foth in
8 C.F.R. S 204.6(r(4)(t)(A). That section contemplates jobs created by the actual employees of the
new commercial enterprise, specifically in the non-regional center context.
When econornists use the term "direct" jobs in the context of an econometric methodology such as
RIMS II, what is meant are jobs created directly by revenues (which in the EB-5 Pilot program
results from an immigrant investor's investment). For example, where a regional center-based new
commercial enterpdse comprised of immigrant investors renovates a building it purchases, the
employees of the various unafflliated tenants of that building would be considered "direct" jobs in
the context of an econometric report. However, those jobs are not "direct" in the sense set forth in
8 C.F.R. S 204.6(r) (4Xr(A) where the new commercial enterprise is itself the employer that can
provide Form I-9 or other sirnilar documentation on its own employees. The tenants' employees are
not "direct" employees of the regional center-based new commercial enterpdse.
To be clear, this report does set forth the number of jobs that ate likely to be created by the new
commercial enterprises. However, as 8 C.F.R. S 204.6(, (4)@) clearly states, the proof of job
creation in the context of regional centers is not Forms I-9, payroll records or similar
documentation, but rather "reasonable methodologies" such as this feport.
2-2 Simulation Inputs
The data used includes ^fl estimated construction timeline provided by PSRC, expected
development costs and a varteLy of industry information as well as public information from U.S.
Govemment sources. Additional research and analysis was performed by WJ to substantiate data
fot reasonableness.
Industry and ptoject telated metrics such as output and employment were compared to national and
regional data sources.
Information from the business plan for the proposed industry cluster was provided by PSRC and
such information within the plan was evaluated and then incorporated into this analysis for arca
specific background and demographic purposes.
10
August 9,2013
Based on the data provided and coroborated, inputs were created for use in the RIMS II system to
model the economic impact of the construction phase of the project. The relevant information and
data used to develop the model inputs of the project was provided by PSRC.
A summary of the proposed project follows:
Pleasant Harbor Marina and Golf Resort - The construction of several buildings and the
development of infrastructure for a master planned resort community located in Brinnon,
\X/ashington within the county of Jefferson. The total investment into the project will be
fi29,035,397 and the EB-5 investment is projected to be $8,500,000. The remaining $20,535,391 will
come ftom developer equity and domestic sources.
Buildins Construction
Construction will last approximately twenty-elght (28) months and the totai hard construction costs
of the buildings will be $9,854,600 (n 2013 dollars). The current RIMS II multipliers are from 2010
therefore we must deflate the expenditures to 2010 dollars.
o Maritime Village
o Pleasant Harbor Bistro
o Reunion House
o Harbor House
TOTAL CONSTRUCTION COSTS
FEES & PERMITS
o Maritime Village
o Pleasant Harbor Bistro
o Reunion House
o Harbor House
TOTAL FEES & PERMITS
$7,845,500
$501,500
$753,800
$753,800
$9,854,600
$21,200
$22,500
$ 12,000
$ 12,000
$67,700
$ 105,000
$58,000
s5,000
$5,000
$173,000
FUNITURE, FIXTURES & EQUIPMENT
o Maritime Village
o Pleasant Harbor Bistro
o Reunion House
o Harbor House
TOTAL FUNITURE, FIXTURES & EQUIPMENT
CONSULTING FEES
o Maritime Village
o Pleasant Harbor Bistro
$106,000
$49 000
August 9,2013
11
Phascl&2of I Use of Funds -Ilreakout
Amount
a
a
o
a
Maritime Village
Pleasant Harbor Bistro
Reunion House
$0
$0
$0
$700,000
Harbor
All General & Administration cost for the construction of the buildings are covered in the
Maritime Village
Village
Harbor House
Contingency costs for the Pleasant Harbor Bistro is covered in contingency costs for the
Maritime Village
According to the Turner Construction Building Cost Index, construction costs have been on a slight
increase from 2010 through 2013. The cost index in 2010 was 799 vs. the 2nd quarter 2013 cost
index of 8593, which means the costs of construction is higher n 2013 than 2010. Therefore, the
construction costs for this project will need to be further reduced to 2010 dollars.
3 www.tumetconstruction.com/content/files/Costlndex2O13Qrtr2.pdf
August 9,20t3
t2
. Reunion House
o Harbor House
TOTAL CONSULTING FEES
$25,300
$25,300
$205,600
TOTAL BUILDING COSTS:s11.280.900
2nd Qunrter 2813
l-st Qr"rarter 2O13
4th Quarter 2O12
3rd Quarter 2O12
r-.18
1_19
0.84
0.73
2.L
1.6
4.O
-8"4
6.3
7.7
10.6
s.5
5"4
o"3
1.O
3.O
4.4
2012
20i_L
20L0
2009
2008
2007
2006
2005
2004
2003
2SO2
2S0t
2000
Bso
s12
7$S
s32
$o8
s54
7S3
717
s55
621
s1$
s13
595
Ilrmer
To convett this figure to 2010 dollars we use the 201,3 index of 859 and divide it by the 2010 rndex
of 799. Thisgivesusafigure of 859/799 = 1.08. Toconvertthe$9,854,6001n2013 dollars to201.0
dollars, the 2013 expenditure is divided by 1.08, to yield fig,1,24,630.
In frastructure C onstruction
Construction will last approximately twenty-seven (27) months and the total hard construction costs
of the infrastructure will be $10,756,900 (in 201,3 dollars). The current RIMS II multipliers are ftom
2010 thetefore we must deflate the expenditures to 2010 dollats,
2013 Dollars 2010 Dollars
$9,1,24,630$9,854,600
August 9,2013
13
In$sn
85S
84S
83S
832
&s6
Aver*ge Index
Building Cons*qctir:a Hxpenditure 20i3 Dollars vs. 2010 Dollars
Phascl&2of I Use
NSTRUCTION COSTS
. US Highway 101
o Black Point Road
o WDFW Boat Access Road
o Maritime Area -
o Water
o Wastewater Reclamation Plant (WRP) -
o Wastewater Reclamation Plant (WRP) - Vertical
TOTAL
DESIGN, SURVEY PERMITS & INSPECTIONS
o US Highway 101
o Black Point Road
o WDFW Boat Access Road
o Maritime Area -
o Water
o Wastewater Reclamation Plant (WRP) -
o Wastewater Reclamation Plant (WRP) - Vertical
TOTAL DESIGN, SURVEY PERMITS &
INSPECTIONS
SALES TAX
o US Highway 101
o Black Point Road
o WDFW Boat Access Road
o Maritime Area -
o Water
o Wastewater Reclamation Plant (WRP) -
o Wastewater Reclamation Plant (WRP) - Vertical
TOTAL SALES TAX
$325,125
$ 186,735
$169,500
$2,348,140
$1,064,000
$2,561,400
$4,102,000
$10,756,900
$106,316
$61,062
$55,427
$767,842
$347,928
$837,578
$894,236
s29,261
$ 16,806
$ 15,255
$211,333
$95,760
$230,526
$369,1 80
$968,121
ENCY COSTS
o US Highway 101
o Black Point Road
o WDFW Boat Access Road
o Maritime Area -
o Water
o Wastewater Reclamation Plant (WRP) -
o Wastewater Reclamation Plant (WRP) - Vertical
TOTAL CONTINGENCY COSTS
$92,140
s52,921
$48,036
$665,463
$301,538
$725,901
$ 1,073,083
$2,959,081
August 9,2013
t4
TOTAL INT'RASTRT]CTURE COSTS
Amount
$3,070,389
2013 Dollars 2010 Dollars
$9,960,093$10,756,900
To convett this frgure to 2010 dollars we use rhe2073 rndex of 859 and divide it by the 2010 index
of 799. This gives us a figute of 859/799 = 1.08. To convert the $10,756,900 in 2013 dollars to
2010 dollars, the 2013 expenditure is divided by 1.08, to yield $9,960,093.
Construction employment was detived through expenditure modeling based upon detailed
construction cost figures supplied by PSRC. Verification at the I-829 state of the EB-5 process
would be receipts, tax documents, and other expense records.
2-3 zuMS II Final Demand and Employment Multipliers
Shown in the chart below are the actual RIMS II final demand and employment multipliets used in
the project for this analysis specific fot the counties within the Regional Center.
INDUSTBY
lrulrlpller
Flnal Demand Dlrect Eftect
OuEutfl/
(dollar3)
Earnlng!r2l
(dollar3)
EmploymertlY
(ioba)
Value-addedrY
(dollar3)
Earnhgir/sr'
(dolLrs)
Enployment U
(iob8)
z*XmO Co{}stn ctiofl 1.5s41 0.5080 1 1 .1851 0.8{s8 1.1773 1.68Ss
Regim Deffim: Chlnn, WA; Jefrersn, WA; l(rtsap. WA
'Elct des GoyernrH{ enEtpises.
l - Eafi entuy kl coblm I r€presents the bfal ddhl drange in orr$d thEt oculls in atr i,rdusbies tor ead! aruitfid ddhl ol outilt ddivered b
fual derllarxt by fte industry mflesponfi!0 b tE efitry.
2 Eadr entuy h cohnm 2 represefits lhe bfal (Hhr dwrge in eflr*Us d houshotss emffiled by d i*drbs br edr Elldlixlal (lotar 0[
ddgrtddive{€d b ftal derend by tlte h*rty corespfirlo b fre enw.g Eafi Bntry h cofum 3 represents lhe ffil change h mmber of lobs thd occurs in al irdr$ies lor eadr adlistal 1 nillm filils d oo$ut
(Hirrered b firsl denild by the indu*ry c6respfr|drU to lhe mby- BecarH &e empaolfilefit mullirl-cls are beed cE 20lO dab, lhe flbut
ddi\Ae.ed b fB'al dernild stHrld be .tt An1o dolhrs,
4- Each effiy h cohtrrn 4 reprcsants lhe btal ddhl cfiaue in vahe sfied that ffirrs in aI fidusties lor edr aditmd ddtu ol ouHJt
(H,vered b fr8l demild by lhe irdustuy corespcrtrE b [le eBty.
5. Eafi ertry h coanm 5 represer|ts ltle btal ffila, dliloE an €amhgE ot trcr$hdG ernw by dl ir*dltss tu edr rddlioBl &lat d
€arrirgs pa*, direcily b hanetn*b empbyed bf lhe iflruf,ty @rrespmdlE b the e$tsy"
6- Each entry E! cohmn 6 rqreserts the ffil dlErEE ir r$mbe, ol lfrs in all indus&ies lor eefi sfilims: F0 h [le ifilldry cDrespfrdru to
tle €nfy.
1-lotE--{,tr[Ffe$ are bas€d dr tle AXp Berdmal* rsrtq&rt TaHe ld tl€ Nalbn ard 2010 rc0imd {bta- rrdMy LisiA irfllrfes ltE
ird.rsfiies cDrre*ondiU b lre erfibs.
SilJRCE.+fioId hFltorurt Modelino s]stern {Rn S l). Re{imd Prcdrd E[vbbr\ Brresl ol Eslorflk Analy*r
2-4 Calculation of Employment Results Using Final Demand Multiplier
Construcuon of Buildings
Looking at construction (I..IAICS code 2362), the final demand multiplier is 11.1851 and the
employment multiplier is 1.6895. The final demand multiplier is used to determine the total number
August 9,2013
15
Inftastructute Construction Expenditure 2013 Dotlars vs. 2010 Dollars
of jobs produced based on the expenditures for construction of the development, which is shown in
Table A of this report. This figure is $9.125 million (in 2010 dollars). Therefore if all the jobs were
counted, there would be $9.125 times 11.1851, or 702.7 jobs. This figure includes direct and indi'ect
jobs.
The employment multiplier is 1.6895, which means that for every 1 direct job, there ate 1.6895 total
jobs. Hence fot every 1 direct job, thete are 0.6895 induect jobs. If there are a total of 702.7 jobs if
all categories are counted, then based on this multiplier there are 60.4 direct jobs and 41.7 indirect
jobs. This is the figure shown in Table A.
Construction of Infrastructure
Looking at construction (I.JAICS code 2371), the final demand multiplier is 11.1851 and the
employment multipliet is 1.6895. The final demand muluplier is used to determine the total number
of jobs produced based on the expenditures for construction of the infrastructure, which is shown
in Table A of this report. This figure is $9.960 million (in 2010 dollars). Therefore if all the jobs
were counted, thete would be $9.960 times 11.1851, or 717.4 jobs. This figure includes direct and
indirect jobs.
The employment multiplier is 1.6895, which means that for every 1 ditect job, there are 1.6895 total
jobs. Hence for every 1 direct job, there are 0.6895 indirect jobs. If there are atotalof 771.4 iobs if
all categories are counted, then based on this multiplier there are 65.9 direct jobs and 45.5 indfuect
jobs. This is the figure shown in Table A.
2-5 Guidelines and Methodology for Construction Employment Creation
USCIS guidelines state that direct construction jobs lasting less than two years should not be
counted for the purpose of determimng EB-5 job count. However, the indtect jobs can be
counted. The method used to determine indirect employment creation is capital expenditure to
determine ditect and indirect job creation and then to subtract the direct jobs.
The ptoject wrll include over two years of consttuction. Therefote, direct construction jobs will be
included in the total census.
Also, the number of construction jobs must be based upon the capttal expended on the "hard costs"
of construction. Soft costs, such as development fees and permitting are not included. These jobs
ate calculated as indirect effects within the RIMS II model and to use these costs would be double
counting.
For this analysis the developet has provided WJ with final estimates of all expenditures of the
project. Of the $29.035,391 rn capital expenditure, $20.611,500 will be spent on hard costs for the
development (all in 2013 dollars).
The economic rmpact calculations in this report are based on the RIMS II frnal demand multipliers.
The numbers in the following tables are calculated by multiplyrng expenditures or revenue by the
RIMS II multipliers for the region, for example: the hard construction costs by the RIMS II
construction multipliers.
16
August 9,2013
2-6 Economic Impacts of Pleasant Harbor Marina and Golf Resort
Construction (Buildings and In fras tructure)
Accotding to the business plan, the hard construction costs are expected to be $19.085 mrllion (2010
dollars). The construction will take approximately twenty-seven (27) months to complete.
The RIMS II final demand multiplier fot construction is 11.1851. When multiplied by $19.085
million (2010 dollars) that creates 213.5 new iobs.
Table 2-7 and 2-2 show the economic impact of the construction expenditures for the 20 major
industrial classificauons in the RIMS II input/output model. Please note that in these and
succeeding tables, output and earmngs ate given in thousands of dollars.
Table 2-1 shows that there will be a total of 213.5 new jobs created from the construction of the
buildings and infrastructure. Total output will rise about $30.42 million, while total household
earnings would increase by about $9.69 million. Table 2-2 shows that output per new worker for the
construction sector would be about $151,000, with average annual eatnings of about $51,900. For
all new wotkets, the corresponding figures are ff142,500 and $45,400.
Industry group
Agdculture, fores try, fishing
Mining
Utilities
Constnrction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Profes sional, scientific, s ervices
Management of companies
Administrative and waste management
Educational services
Health care and social assistance
Arts, entertainment, and recreation
Accommodation
Food services and drinking places
Other services
Households
Total
Employment Output
208
736
747
19186
1506
292
7977
302
332
485
7620
7426
38
260
88
7202
109
74
443
594
0
Earnings
1.2
0.9
0.4
1,27.0
6.6
7.4
23.1
2.2
7.3
7.9
6.2
8.3
0.2
4.1,
1.7
71.7
2.2
0.8
7.0
4.2
1.7
44
32
31
6598
294
88
647
97
74
t73
82
534
15
103
32
531
36
23
1,36
170
'13
9,693273.5 30,418
August 9,2013
t7
Table2-1. Increase in Employment, Output, and Earnings for $19.085 million (2010 dollars)
in Construction Expenditures
Industry group
Agriculture, forestry, fishing
Mining
Utilities
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Pro fes sional, scientiFtc, services
Management of companies
Administrative and waste management
Educational services
Health cate and social assistance
Arts, entertainment, and recreation
Accommodation
Food services and drinking places
Other services
Households
Total
Output/Employee
176.9
1,46.4
396.9
151.0
227.8
2t4.6
85.3
135.3
259.3
253.7
262.5
1,72.7
224.7
63.9
52.7
108.0
49.1,
89.2
62.9
140.2
0.0
1,42.5
Eamings/Employee
37.3
35.1
82.5
51.9
44.5
64.5
28.0
43,7
58.1
58.9
13.3
64.7
89.9
25.4
19.5
47.7
16.4
27.5
t9.2
40.1
8.0
45,4
Employment
1.2
0.9
0,4
't27.0
6.6
1.4
23.t
2.2
1,,3
t.9
6.2
8.3
0.2
4.1
1,.7
11.1
2.2
0.8
7.0
4.2
1..7
2t3.5
2-7 YenCtcation of Inputs
Building Construction
The costs related to the construction of the buildings is supported by a confidence letter by one of
the developers contracting entities, Statesman Construction, dated July 30, 2013. The letter states
that the total construction costs of $11,280,900 and the timeline associated with the project appears
to be reasonable. Of the $11,280,900 only $9,854,600 (the total hatd construction costs) was used as
input to the economic model. The letter is shown below.
August 9,2013
l8
Table 2-2. Ou(put and Earnings Per New Worker-for $19.085 million (2010 dollars) in
Construction Expenditures
St*te*rmsn ConEtruct$sn LLP
fl$00 S ftntmtrse SfiB l&ll
Seottdn&e1AL B5.x$0
July $1,I0l3
HEI Coa*rucllos Eid for Ple*snnt llsrB'or lil*rlna nffid H.esad tf,P
Ifcar $irs:
Smeornsn frEuuucdm LtriP laff puvidud the atfimfud bldltudgst qflst$ fsr Fkssffnt
[$ttftorM*rina ard Rssort I"I.P forthe fullowing*aopw ofnrna*:
Bis{ro Euitding
Rourn-inn Hu,rm
Xillrb*r Tierr Hourc
tfaritims Villagr
fre*c ffiectr sre pfitt s.f flrp Pha*s* Itrrbor h,lryhrs emd Essort offim{rdtr *d "*osmhinEd in Hhw n s$d 2 sf th dwdstrmt. Stldgf*$ and plw* hnue hcan prenided
for yur renrlew,
Atthfligli ttre p{uu fsr RE{Eio$ Xlrrurc, tlnrbor Visw Horlrq md Mxidme Yillap rtc
peditrrirru*y. thchudgtu ure,vithin ffiusonflblp induslrysr*drud* fur &in loefrfiisn
t$umwwr eomuwrastimr wlh fiil[{H Arohitcqti ffnd Bq$instttng Co*sultun& hsvt
oeetllrcd orix the ps*t !iloffith* eamnirg tbl site nnd rtx*nlsw s bBdstrsloprd,
Shnes$Hffi f*ftstntctistt I".LP har beosr heas,ily irvut.lled vi& thc derign of dtlr Fm]#t
amd mnsmmt rdttrd drvdopt[fihilt ovct th*pu*t 16lml* &lr Senignmm tnchdes
EMH .rt-rdritsqg, NF Snginncring (S lqcricpl), NF h{ssl*srltesl" Hs$tr Bqgtn$triiltS,
t oqkfl$ Engineuing {Slructum$, snd Fcck nnd Aesoei*ttc.(Civll F-tlginottitrg}"
Coosufmtio$c rrith r]rm sntitier amd ftrc um of hir,torlcet dcts froil] rimitr buitdinge snd
prujactu tuw bwr utili#Bd in thc forrnuion uf lhe bdgrt* fotthcst Fr$ictts.
$!frtssmnn C,ffnstmcti{fl! Ltr"P h*s fosss im opreti+n aimse l9}d snd hrs oomplutad
rurlTrsFow cmdomtsiunt pmie* ed rr*i#cd liufoog rmmiHt* in Arimse ad Nsrth
Sarrlim" EBccieltzmg in multi-rtorry rtrst frEmd lruildingp wtttturdrr5erd ptclctug
SFr[Ss$ $trtoumsn ie r*mll hnsm tnthcFh*adxrn$rtnd m tltc lco&ri* ttp*oe*le
qosHlodn$rduffi rtssrt stlle Fdrp*fttea. Frwenlly rffidcrfuBtog[mcnt lnd eofissrumion iil
the Fhstrlix amq To*carn @ tret*rt Rifup il ttrc *ingic ll.rgtst rmtti-&tuily Froj*fi [s! t]w
hirbory of Arizwra witb I568 euitsr ofl r 5S s**t sl!e, Tosffifi* has rcscivod nurltctt!{t$
tudt$.fy gwards tud hns b*w *vrlr&d fte #I h,luki-fmnity com,rnqilitt, hy HsnkiRB
Arimwr*n&r ttucpt revrml Paru,
I
e
3
4
August 9,2013
t9
Straemra Coormrc*m LLP fu* puvided csnrffiIo#qn bulgcr amdptoma f-orthe
firthtving buildingl at rc alt iuEtsriv*cosFlcfodprujttt p]tf+pcr brdldiug:
l. B{rhBr}nHing,.,. ."..,",Jff}1.fi10rl eon*mmim durf,sion $ wrmtb.
2. Rtttrtion }truqu*,",. -..r) Cnnrrnrminn rtunrtiort 12 manthn
,$8es,[$s
3. llsilqrY[m [Iousa ..',..$846"100
r) Co rl '&urn$on lE tnou&1"
4. Fdffit[ntsvilfu*",..". ,,,.,.$&99?,?0S
s) Cumtrrctirrndsrafiefl 15 msnths.
A,ll oonrtnrctlm *trt dstc* *rE depdddidt $,po,ii r(scsd to E&5 funds, Holvcvsr, thr
duration offie yryis"ls somitrucEon sctleduler rryitl rernsir* gon*tml.
Thrn* rc* lbryur lilme*( i* drls,Endssvorl'
llocprllrorn
(omntm*tion M*nagpi
Stgrumncm Crynxm'Ictio,ra LLP
Infras tructure Cons truction
The costs telated to the infrastructure construction is supported by the 3'd party confidence lettet by
Craig A. Peck & Associates dated August 10, 2013. The letter states that the total construction costs
of $17,754,492 and the timeline associated with the ptoject appears to be reasonable. Of the
fi77,754,492 only $10,756,900 (the total hatd construction costs) was used as input to the economic
model. The letter is shown below.
20
August 9,2013
Graig A
Peck &Arciat6
I 1 402 4ob Avenue E.
Taooma, Washirqton 9M46
technical assblanc€
253-840-5482
25&2tXF4523 FAX
Deckassoc@ oorncast"ne t
August 10,2013
Paul Hospelhora, Coostn:ctim ltr{anager
Statesmaa Group
Phoedx.AZ
BY EMAIL: paul@skrtesrnanusacom
RE: plgliminrry Estimrte of Cmstructioa Cost
Pleasaat tlarbor Marica aad Golf Resort
Stage I, Pbascs 1 aad 2
Brinno, Washingtoo
Dear Mr. Hospelhua:
The accoryanyiag plgliminely f,stimate of Constuctioa Cosl was cmpiled &ompre-desrgs.
eagirrceriag pl*. for U.S- Higbway 101 *nd pre-design grading plans for Pleasant l{a6tr
Marina aad Golf Resort ia Jeffersm Cormty near Brioaoo, Washhgtos- Quantities of
constructioo items werE estirl*t€d from those plans or were developed conccpttrally for storm
&aiaage itc6s ard landscaping. Unit cosLs wrre takta &omreoem mraicipal aadprivate
constnrctim estimating documeab frr Western Washiagm State. Design md contingeacy
perce[tages wcre applied to reflect ttc pre-dcsign status of lhc project.
Erperieuce of Cr'*ig A. Peck, P.E,
Ciril Enginesr - Project }lauager
Bachelm of Science - Cirr'il Engire€ritrg -University of Washiryfo,r:" 1968
Registred kofessiooal Engpeer - Washingfoo, Oregor, md California
Craig Pect has more than 45 yers of experietce in Civil Enginecdng design and project
maaagem€at. The ecrperierce of Mr- Peck iacludcs planning, reserch, aaalysis, project teaf,
buildiug, graat writing, ageruy coordiaatioc, b&astructure dcsigg adrniaistratioq and
constrrrctioa manrgem€fit- Projects have included stormwate(ruroffanalysis, collectim system
desigl, treatmclnt, storage, and disc&arge; saaitary sewer facilities plaooing/feasibility surdies,
August 9,2073
2\
collectio{r rystan desim- pury statrons treatmEot plants, and &scbarges; water supply, storage,
and distributio,n; roadway dcsign: resideorial dcvelopmeots itrludiog si.gle family and
multifauily projects; golf courses; comerci*Uretail ceuter dcvelopmeats; and marha
p€mittry and dcvelopmeot. Mr. Peck assists his clieots with thc selection of alrpropriate team
members to successfirlly completc fleir g{ecfs.
Projects lh.t illustrah ttc broad range of expericace ioclude *. lo11oq.ing:
South llill Yillage - Retail Ceuter, Puyallnp, lYeshington
1y1r'- pss! mrnaged all aspocts of enginoering design and cosstnrctior coordimtioa for the
35 acre retail ceoter ir Fuyallup"s South Hill The projecr inotved sigaificaat grading
quantities, wat€r maio exteosious, sadtary scwcr €xt€nsion, storage md infiltratioa of all
storm &ainage nmoff, tew City strees, and wid.dng of SR t 6 I . Coordination with
Washingtoa State Department of Traosportatioar was required for right of way lease and
improvelneaE. Duritg a secmd coastnrction phase, permitting for the filling of a 2-acre
wetlard includiag the purchase aad cnhancemeot of m ofTsite wetlaod/habitat pmperty
was required.
Kitsap I[aIl - Retail Certer, Siherdale, lVashington
Mr. Peck served as Project Maaaga for all sirc gradmg and utilities &sign for the Kitsap
Mall ia Silvcrdale, Washiagton- As part of this project hc also ---"ged the adjacent
recorstnrstio,D aad realignmeat of Clear Creek Road design &om its two laae
configuration to a five lanc a1sial as a Couaty Road Improvcrreut District. Area widc
drafuage systeu revisious wern required to accosruodal6 sigrificant incre*ses itr
surfaces.
Iletropolitan Park District of Tacoma, Tacoma, lYashfurgton
Ivk, Peck was project mmager andprincipal designrr for tle upg"adc of cxisting parthg,
roadg and water distribtrtion system and thc creaticl of new roa& and parking l,ots fo,r
thc zoo and ferry terminal for Pornt Defraace Fark in Tacoma.
Indian Summer Golf and Country Club, Olynpia, TVashingtor
Mr. Peck was the koject Maaager and Principal Esgmeer for the plmiag and permitting
of the golf course end s65id6a1ial &veloporcnt He paticiparcd in the design of the golf
cor:rse with the golf course archirect and designed the drainage &om the course. He was
rcsponsible for design of grading, roads, &aiaage, water, arrd sanit*ry scwer for the
housing dct'elopmeot phases as wcll as the club house. Design hcludtd irrigation system
sorrce wcll aad water feature poads. Area wide sanitary sewer impror,-ements as au
e*pansio,a of the City of Olympia sJrstrm were also coordinatcd and designcd
Cosdioatioa of project dcsigns with evohing County madwidcnicg and draiaage
desigr. were rquired.
Canterwood Golf aud Courtry CIub, Gig lfarbor, Washington
Mr. Peck was retaioed to design &aiaage aad ponds and ffsist th6 golf course archircct
with grading and coudiaatimwith the golf course csnstrrctiorr contractu for ttre
22
August 9,2013
Cantrwood golf course. He participated h the siticg of the clubbouse and prking areas
and designed the sanitary sswer sys0ecrs fo,r the clubhouse and several of the horrsing
developneitt phrses,
Tapps Islaud, \ffashington
k"j.rt ManagEr/Eagincs, Tapps tsland Associatioa Engircer for more rfi- 17 yers,
respoasible for road recqsructioo and widcoiag, storm drainage system recoastructioar
iacluding golf .surr &'ainage a*d cart path cmstructioo, and watcr systeo
imlrrovemcuts iacluding aew primary well iastallatioa for over 500 cosacctio{rs.
Citl of Gig llarbor, \Yashingtou
Mr. Peck was Project F.nginaer'/Csrstuctim Adorinistrator for Utfity Local
Ioprovemeat Drstrrct 3. reqroasr'blc for &sign ad coostn ctioo of sanitary scwer
collectioa systcm to s€rve thc Purdy area- The City of Gig Harbc rctaised the sewices
of Mr. Pock md tLe services of Sirs ildHill Ecgineers lac to assist witi the &sigp of
the sewer sysM improvements- The p,roject iacluded coordirmfioo with $/ashiagton
State Deparmenr of Trauspoa'tadm foruse of Higfiway 16 rigfits of way aad Pierce
Cor.lnty for use of their righrs of way- Design includcdpump statioos, force mairs, asd
gravity sewers-
Citl of University Place, TVashirrglon
I\lk- Peck was rctained by &e CiY of University Pl*ce, Waqhington as the sole autbm to
prr?arc 6e Feasib,ility Study for Smitrry Scwer Collection Systeo Expansion to ort€nd
sanitary scwer collectios service throughout the newly formed City of University Ptace.
This study analyzcd the method for p,roviding service, illustrated the pro,posed systeo,
and estimated lte costs for syster developmeot The strdy was a c{$p€rative cffort with
Pierce Couaty Public Worts.
Eleueuts of the Estimate:
{.T.S. Eighway l0l- $552,843 9 il{ontLs Hard Coustrtrtion Duratior
The f,orecast increase ia rafrc geoerated by Pleasant Habor Marioa acd Golf Rcsort required
improvemcats to tte ist€rs€ctioa of U-S, Highway 101 ad Blxck Poiat Road to maintaio aa
acceptable lwel of service alrd trafrc safety. Bolh roads wil bc widencd to increase lane wr&hs
ald to creatc frrnicg; deceleratioo, end *cceleratioa laaes. Blact Poiat Road will be relocatcd to
form a ninety degree iatersactim from its curreot 75 degrees wi& U.S. Highway 101 to improve
intcrsectioo sigLt ssfcty rnd turdng oovcooetrts.
The srrface of the existing pavenerrt will be ground doum ro allow the additios of a 2-inch
rhickness of aew asphaltpavemcat- Thc roadway will be re-chanselized u.ithpalemeot markiry
ro deliaeatc the new taffic ptttcms.
Black Poiut Road- $317,524 8 Llonths Hard Construction Duration
Black Poiot Road will be straighteocd to improw the intersectioo *ligment uith U.S. Highway
101, This roconfigu'atioa wifi require dcdicatimr of new right of way to Jeffersoo County.
compl,ete rernoval of tle existing roadway, and road srx-f,ace wid€airy Cmcrete crrb and gutter
are lropo.sed to provi& a more formal appeararrce- Aa acccss drive to t[c Mdtiilc area and an
August 9,2013
23
acoEss drive to a trew parkirlg trer atrd blrs stop frr Jcfferso Trarsit and Masm Traasit will be
establishad wift a ncw forr-way intersectioo- The drive to the partiog area aad bus stop will
also provide acccss to a gated scccndary acccss to thc Golf Rcsort area primarily for sasice
vehiclcs, pcdestrians, and resort shr*tles. The pavemeot sectioa will be thictcacd to
accoomodate higler vohrmcs of traffc. Ruaoff &oo the ncw pa.r.ed aeas will be collected ard
trcated to improve water quality prior to discharge.
llashiugton Department of Fish aud lYildlife OVDFll) Boat LaurcL Acress Road-
S288ll8 6 l\'Ionths Hard Construction Iluration
Tbe curreat boat lauqch access road intersects with Black Point Road at an aqrtc aagh aad at the
end of a curre resuld.g in a very poor sigt* distmce cooditioo- S/i& p,rojected incrcase ir
vehicle traffic this intrrsection would preseut an uosafe cordilios* The existiag locatiou would
forn a five-way futersection that is not an acceptable eogineering p-actice. Aa altcrnative
locatio,s for t[e boat lauoch access road intersectim is remotc &om &e p,roposed nemr
istersecti,oa and provides for a much isproved entraace to Black Point Road- The iaterscctioo
with Black Point road would providc fu a llater rea for vehides to stop before eateriag the
roadway. The proposed access road route follows al old loggiag road but will require significaor
quantitics of tree clearing and grading. Thc csw access road would be paved to a widcrwidth
rhnn the uisting road to provid€ for improved clearance betwoea vehicles with trailcrs. Rr:rmtr
from thc new acccss road will be colleaed atrd treated to iryorr water quality pnu to
discharge.
$Iaritinp f illag*. $3,992,777 28 }fouths llar:d Coastnnrtiou Duratian
Thc Maritime Village is sinrated in a slo,piag terrain requiring re-contoruiag of tLe site to
accmmodat€ drives, parking aod tbree buildrngs- The access &ive aad shutde route to the
Errina is to be rrideoed as requircd to include iryoved paking aod &ive Amfug the Eariffi
buildings. Paved parting areas md drives will be laudscaped in all reas aod includc cut
guttcr, md sidenralk at thc Maritimc Buildio& Sidewalk will connect wilh a pedestrim crossirg
of Blaclc Point Road aod the bus stop and a jacat parting area to the soutt- The bus stop aod
pErkiry arra will be paved with rsphalt and lmdscaped. A covercd area will be p(ovidcd fur
transit patrof,s at tbe bus waiting rea.
\Yater aud Sewer }Iajor Facilities (Phase l)-
-lVater $I"809,226 I S{onths Eard Construction I)uration
A watrr storage facility will be constnrctcd to serve tic cotire rcsort andn ri[a rea. Tbe site
corstructod coacrete taok will be a huied oa a high poiat of tfie golf coruse aer the southeasl
corner of lte sitc. The tank will cmtain 310,@0 galloos of well water. ThE existtrg well m thc
rcsffit site is to be rehabilitated aad an additioaal well is to be drilled aad put itrto service for lte
rcs6t watrr sr{rply. The initial consrructim will include traasmissioo pipiag ftom the wells to
the storage, distributioar piping md pressure control to establish water pressure zoocs
as nee&d rrithiu the servicc area.
-Sewer 510,793,904 17 I'fouths ltrard Construction Duration
l}e waste water reclamatim ptaat is designed to be efEciently erryaoded as 6e resort Stages and
Phascs progrcss. It co,asists of a scrics of coacretc tarts; coocretc building for laboratory, offce,
and cmtrols; pumps, blowers, md pipung. Paved &ives aad parting provide access to the
August 9,2013
24
oquipment withitr the plant ar€a. 'fhe first of the three phases of tneatmenl plant constuction is
included in this estimate. The reatrrent plart will pmduce Class A effluent that is allowed to be
uscd for irrigation and firc supprcssion. Treated reclaimcd waicr along with collected site
stomwatsr runoff is to be stored in the 120 million gallon capaoity, l2 acrs surface area, and
syntheiicslly lined "Kettlc B" storage pond that is included in this estirnate of oonstruction costs.
If I can provide you with additional information concerning the pmject in general or the
p,rcliminary estiruate of constnxction cost, pleasc conhcl mc.
Very truly yours,
t**orx\w\t'
Craig A. Pu.t).r.
August 9,2013
25
3. About RIMS II Final Demand Methodology
The following material has been condensed from the RIMS II Uset Handbook
Inttoduction and General Comments
Effective planning for public- and private-sector projects and programs at the State and local levels
requres a systematic analysis of the economic impacts of these projects and progtams on affected
tegions. In turn, systematic analysis of economic impacts must account fot the inter-industry
relationships within regions because these relauonships latgely determine how tegional economies
are likely to respond to project and program changes. Thus, tegional input-output (I-O) multipliers,
which account for inter-industry relationships within regions, are useful tools for conducting
regional economic impact analysis.
In the 1970s, the Bureau of Economic Analysis (BEA) developed a method for estimating regional
I-O multipliers known as RIMS (R.egional Industrial Multrplier System), which was based on the
wotk of Garnick and Drake. In the 1980s, BEA completed an enhancement of RIMS, known as
RIMS II (X.egional Input-Output Modeling System), and published a handbook for RIMS II users.
In 7992, BEA published a second edition of the handbook in which the multipliets were based on
more recent data and improved methodology. ln 1,997, BEA published a thitd edition of the
handbook that provides more detail on the use of the multipliers and the data sources and methods
for estrmating them.
RIMS II is based on an accounting framework called an I-O table. For each industry, an I-O table
shows the indusuial drstribution of inputs purchased and outputs sold. A typical I-O table in RIMS
II is derived mainly from two data sources: BEA's national I-O table, which shows the input and
output structure of neady 500 U.S. industries, and BEA's tegional economic accounts, which are
used to adjust the national I-O table to show a region's industrial structure and trading patterns.
Using RIMS II for impact analysis has several advantages. RIMS II multipliets can be estimated for
any tegion composed of one or more counties and for any industry, or group of industries, in the
national I-O table. The accessibiJity of the main data sources for RIMS II keeps the cost of
estimating regional multipliers relatively low. Empirical tests show that estimates based on relatively
expensive surveys and RIMS Il-based estimates are similar in magnitude.
BEA's RIMS multipliers can be a cost-effective way for analysts to estimate the economic impacts of
changes in a regional economy. However, it is important to keep in mind that, like all economic
impact models, RIMS provides approximate order-of-magnitude estimates of impacts. RIMS
multipliers are best suited for estimating the impacts of small changes on a regrional economy. For
some applications, users may want to supplement RIMS estimates with information they gather
from the region undergoing the potential change. To use the multipliers for impact analysis
effectively, users must provide geographically and industrially detailed information on the initial
changes in output, earnings, or employment that are associ.ated with the project or program under
study. The multipliers can then be used to estimate the total impact of the project or program on
regional output, earnings, and employment.
August 9,2013
26
RIMS II is widely used in both the public and private sector. In the public sector, fot example, the
Department of Defense uses RIMS II to estimate the regional impacts of military base closings.
State transportation depatments use RIMS II to estimate the regional impacts of airpot
construction and expansion. In the private-sector, analysts and consultants use RIMS II to estimate
the regional impacts of a vaiety of projects, such as the development of shopping malls and sports
stadiums.
RIMS II Methodology
RIMS II uses BEA's benchmark and annual I-O tables for the nation. Since a particular region may
not contain all the indusuies found at the national level, some direct input requirements cannot be
supplied by that region's indusfties. Input requitements that are not produced in a study region are
identified using BEA's regional economic accounts.
The RIMS II method for estimating regional I-O multipliers can be viewed as a three-step process.
In the first step, the producer portion of the national I-O table is made region-specific by using six-
digit NAICS location quotients Gar). The LQs estimate the extent to which input requirements are
supplied by fitms within the region. RIMS II uses LQs based on two types of data: BEA's personal
income data (by place of tesidence) are used to calculate LQs in the service industries; and BEA's
wage-and-salary data @y place of work) are used to calculate LQs in the non-service industries.
In the second step, the household row and the household column from the national I-O table are
made region-specific. The household row coefficients, which are derived from the value-added row
of the national I-O table, are adjusted to reflect regional earnings leakages resulting from individuals
working in the region but residing outside the region. The household column coefficients, which are
based on the personal consumption expenditure column of the national I-O table, are adjusted to
account for regional consumption leakages stemming from personal taxes and savings. In the last
step, the Leontief inversion approach is used to estimate multipliers. This invetsion approach
produces output, earnings, and employment multipliers, which can be used to ttace the impacts of
changes rn Frnal demand on and indirectly affected industries.
Accuracy of RIMS II
Empidcal evidence suggests that RIMS II commonly yields multipliers that are not substantially
different in magnitude ftom those generated by regional I-O models based on relatively expensive
surveys. Fot example, a comparison of 224 ndtstry-specific multipliers from survey-based tables for
Washington, Washington, and West Virginia indicates that the RIMS II aver.age multipliers
overestimate the average multipliers from the survey-based tables by approximately 5 percent. For
the majority of individual industry-specific multipliets within these states, the drfference between
RIMS II and survey-based multipliers is less than 10 percent. In addition, RIMS II and survey
multipliers show statistically similar distributions of affected industries.
Advantages of RIMS II
There are numerous advantages to using RIMS II. Fitst, the accessibility of the main data sources
makes it possible to estimate regional multipliers without conducting relatively expensive surveys.
Second, the level of industrial detail used in RIMS II helps avoid aggtegation errors, which often
occur when rndustries are combined. Third, RIMS II multipliers can be compated across areas
August 9,2013
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because they are based on a consistent set of estimating procedures nationwide. Fouth, RIMS II
multipliers are updated to reflect the most recent local-area wage-and-salary and personal income
data.
Overview of Diffetent Multipliers
RIMS II ptovides users with five types of multipliets: final demand multipliers fot output, for
earnings, and for employment; and direct-effect multipliers for earnings and for employment. These
multipliers measure the economic impact of a change in final demand, in eatnings, or in employment
on a regtion's economy.
The final demand multipliets fot ouput ate the basic multipliets from which all other RIMS II
multipliers are derived. In this table, each column entry indicates the change in output in each row
industry that results ftom a $1 change in final demand in the column industry. The impact on each
row rndustry is calculated by multiplyrng the frnal demand change in the column industry by the
multiplier for each row. The total impact on regional output is calculated by multiplying the final
demand change in the column industry by the sum of all the multipliers fot each row except the
household row.
RIMS II provides two ty?es of multipliers for estimating the impacts of changes on earnings: fnal
demand multipliers and direct effect multipliets, These multipliets ate derived ftom the table of
final demand output multipliers.
The final demand multipliers for earnings can be used if data on final demand changes are avaiTable.
In the final demand earnings multiplier table, each column entry indicates the change in earnings in
each tow industry that tesults from a $1 change in final demand in the column industry. The impact
on each row industry is calculated by multiplying the final demand change in the column industry by
the multipliers for each row. The total impact on regional eatnings is calculated by multiplying the
final demand change in the column industry by the sum of the multipliers fot each row.
Employment Multipliers
RIMS II provides two types of multipliers for estimating the impacts of changes on employment:
final demand multipliers and direct effect multipliers. These multipliers are derived from the table
of final demand ouput multipliers.
The final demand multipliers for employment can be used if the data on final demand changes are
available. In the final demand employment multiplier table, each column entry indicates the change
in employment in each row industry that results ftom a $1 million change in final demand in the
column rndustry. The impact on each row industry is calculated by multiply-g th" final demand
change in the column industry by the multiplier for each row. The total impact on regional
employment is calculated by multiplying the final demand change in the column industry by the sum
of the multipliers for each row.
The direct effect multipliers for employment can be used if the data on the initial changes in
employment by industry are available. In the direct effect employment multiplier table, each entry
indicates the total change in employment in the region that results from a change of one job in the
August 9,2073
28
row industry. The total impact on regional employment is calculated by multiplyrng the initial
change in employment in the row industry by the multiplier for the row.
Choosing a Multiplier
The choice of multiplier for estimating the impact of a proiect on output, earnings, and employment
depends on the availabrlity of estimates of the initial changes in final demand, earnings, and
employment. If the estimates of the initial changes in all three measures are available, the RIMS II
user can select any of the RIMS II multipliers. In theory, all the impact estimates should be
consistent. If the available estimates are limited to initial changes in frnal demand, the user can select
a frnal demand multiplier for impact estimation. If the available estimates are Limited to initial
changes in earnings ot employment, the user can select a direct effect multiplier.
The EB-5 tegulations provide that "jobs cteated inditecdy" by a regional center- affiliated business
may be credited to foreign investors who made a qualifying investment in the business. To show
this job creation, "teasonable" methodologies may be used. 8 CFRS204.6(-)(7). The RIMS II
input/output model has been recognized by the USCIS as an acceptable methodology for showing
job creation resulting from a regional center- affiliated investment project.
August 9,2013
29
EXHIBIT 1 - Unemployment rates in the Project Regron
In the following chart, WJ focused on the unemployment rates in the region. The unemployment
charts highlight the non-seasonally adjusted unemployment rate for the project region. The annual
unemployment level for the region n 2012 was 4,286, with an unemployment rate of 8.9 percent.
This number has dropped to 8.5 percent as ofJune 2013.
Center
efferson ,wA ect
2012 J"t 54,376 49,556 4,820 10.1
2012 Feb 54,465 49,474 4,991 10.3
2012 Mar 54,236 49,419 4,817 9.9
2012 Apt 53,626 49,369 4,256 8.9
2012 M"y 53,891 49,514 4,377 9.0
2012 Jrt 53,807 49,523 4,285 8.7
2012 Jrl 52,757 48,567 4,191 8.6
2012 Arg 53,069 48,832 4,237 8.7
2012 s.p 52,955 49,147 3,808 7.9
2012 Oct 53,108 49,388 3,720 7.7
2012 Nov 53,150 49,325 3,825 8.1
2012 Dec 53,457 49,348 4,109 8.7
2012 Annual 53,575 49,288 4,286 8.9
2013 J^n 52,647 48,144 4,503 9.8
2013 Feb 52,618 47,981 4,637 10.0
2013 Mat 53,727 48,768 4,359 9.2
2013 AP.52,266 48,469 3,797 8.2
2013 M"y 52,151 48,247 3,904 8.3
2013 J.rn 52,026 47,950 4,076 8.5
2072 J^n 12,155 10,829 7,326 10.9
2012 Feb 12,135 10,794 7,341 17.1
2012 Mat 12,097 10,827 1,270 10.5
2012 Apt 12,024 10,892 7,732 9.4
2012 Mry 12,758 1 1,008 1,150 9.5
2072 J.rn 12,356 11,226 1,130 9.1
August 9,2013
30
Year Period Labor
Force Employment Unemployment Unemployment
Rate olo
Year Period Labot
rofce Employment Unemployment Unemployment
Rate %o
2012 J.rl
Clallam WA
ICtsap County, WA
7 10 2 50 8.7
2012 Arg 12,055 10,956 1,099 9.1
2012 s.p 12,028 11,029 999 8.3
2012 Oct 11,869 10,894 975 8.2
2072 Nov 71,793 70,769 1.,024 8.7
20t2 Dec 11,804 10,689 1,115 9.4
2012 Annual 12,041 10,907 1,734 9.4
2013 Jun 11,730 10,478 1,252 10.7
2013 Feb 17,713 10,434 1,279 10.9
2013 10,654Mar1 1,833 7,779 10.0
2013 Apt 11,637 10,615 1,022 8.8
2013 Mry 11,794 10,760 7,034 8.8
2013 Jr.77,829 10,794 1,035 8.7
20L2 J^.28,827 25,549 3,278 17.4
2012 Feb 28,808 25,501 3,307 11.5
2012 Mar 28,771 25,565 3,206 11.1
2012 Ap.28,448 25,666 2,782 9.8
2012 M"y 28,688 25,832 2,856 10.0
2012 J,,28,915 26,145 2,770 9.6
2012 J,rl 28,51.5 25,794 2,727 9.5
2012 Arg 28,643 25,926 2,717 9.5
2072 S"p 28,469 26,039 2,430 8.5
2012 Oct 28,457 26,044 2,473 8.5
2012 Nov 28,278 25,713 2,565 9.1
2012 Dec 28,468 25,699 2,769 9.7
2012 Annual 28,607 25,789 2,818 9.9
2073 J^n 28,009 24,975 3,034 10.8
2073 Feb 27,875 24,873 3,062 11.0
2073 Mat 28,170 25,329 2,841 10.1
2073 Apt 28,046 25,51.1 ? (?(9.0
207i Muy 27,478 24,951 2,521 9.2
2073 )7 4))24,782 2,640 9.6Jrt
August 9,2013
31
Year Period Labot
Force Employment Unemployment Unemployment
Rate 7o
122,145 172,290 9,855 8.12012J^,
2012 Feb 122,452 712,1.27 10325 8.4
2072 Mat 127,841 1 1 1,865 9,976 8.2
2012 Apt 120,405 111,550 8,855 7.4
2012 Mry 120,827 111,702 9,125 7.6
8,954 7.52012J.rt 120,151 111,197
2012 J.rl 117,735 108,934 8,801 7.5
2012 Arg 1 18,509 109,615 8,894 7.5
6.82072S"p 1 18,369 110,313 7,996
2072 Oct 118,999 111,226 7,773 6.5
2012 Nov 119,378 11.1.,492 7,886 6.6
2012 Dec 120,098 111,655 8,443 7.0
8,907 7.42012Annual1,20,076 111,169
201i J"t 118,202 108,978 9,224 7.8
2013 Feb 118,266 108,696 9,570 8.1
2013 Mar 119,378 110,320 9,058 7.6
2013 APt 117,115 109,281 7,834 6.7
2073 May 117,181 109,023 8,158 7.0
2073 Jrt 116,827 108,275 8,552 7.3
August 9,2013
32
Year Period Labor
Force Employment Unemployment Unemployment
Rate %u