HomeMy WebLinkAbout002Michelle Farfan
From:
Sent:
To:
Cc:
Subject:
Attachments:
Swenson, Karen <kswenson@eaest.com>
Tuesday, January 07,2014 2:30 PM
Aaron Goforth; Garth Mann
peckassoc@comcast.neU David W. Johnson (djohnson@cojefferson.wa.us)
RE: Draft SEIS
Appendix N_Jobs and Economic Impacts,pdf; Economic Analysis of Earnings.docx;
Economic Analysis of the Regional Center Project.docx
I have been going through the following four reports to determine the accurate employment numbers for the Pleasant
Harbor project:
7. Job Creotion ond Value Added to the National Economy by an unknown author and unknown date - not
indicated on document (currently Appendix N of the Preliminary Draft SEIS - attached)
2. Economic lmpoct of Developing the Pleasont Horbor Morino ond Golf Resort in Brinnon, Jefferson County, WA os
port of New EB-5 Regionol Center in Western Washington by Michael Evans, April 2012 (currently Appendix S of
the Preliminary Draft SEIS - too large to email- see EA ftp site or County website for document)
3. An Economic Anolysis of the Regionol Center Encompossing the Counties of Clallam, Jefferson ond Kitsop of the
State of Woshington Final Report Prepored for Puget Sound Regional Center, LLC by Wright Johnson, LLC, August
2013 - attached
4. An Economic Anolysis of Eornings Pursuont to Jefferson County Boord of County Commissioners' Condition 639
for the Pleosont Horbor Master Plonned Resort by Wright Johnson, LLC, November 2013 - attached
Report #L has several different employment numbers. On the Summary Table and the table of page 14, the report
indicates268jobsfromoperationoftheproject,ofwhich156.6aredirectjobs.OntheKey Findingspage(pg2)and
page 16, the report indicates 185 direct permanent employees. Figure 4 on page 9 indicates 191 permanent operation
employees.
Report #2 indicates in its executive summary that for permanent operational employment, there will be: 48 jobs in Stage
l; 424 jobs from Stage ll, Phase 1; and 176 jobs in Stage ll, Phases 2 and 3. This totals 648 jobs. lt is unclear to me, but it
seems like this includes direct, indirect and induced employment.
Report #3 indicates in Table 2-7 (pg 17) that 213.5 direct and indirect construction jobs will be created. Operational
employment does not appear to be calculated in this report.
Report #4 indicates in Table 3-1 (pg 6) that 186 direct and indirect construction jobs will be created. The report
calculates that 1"5 of these jobs will earn less than 80% of the Brinnon area average median income (AMl) to fulfill BoCC
Condition 639.
As you can see from the above, severaldifferent employment numbers have been generated overthe past couple of
years and it is unclear which reports may supercede others for use in the SEIS. Please indicate any reports which no
Ionger should be utilized for purposes of the SEIS. Please also provide the correct overall number of direct jobs upon
buildout.
For purposes of fulfilling BoCC Condition 639, which addresses affordable housing based on permanent employment
jobs/wages, we need the total number of direct permanent jobs and how many of these jobs will earn Iess than 80%
of the area AMl. Report #4 only addresses construction employment.
1
Thank you,
K*retw Svto*ulotw
Etr
Karen Swenson, AICP
Senior Planner
2200 Sixth Avenue, Suite 707 | Seattle, WA 98121
206.452.5350 x 1716
kswenson@eaest.com
From : Aaron Goforth Ima ilto : aaron @wrig htjoh nsonl lc.com]
Sent: Monday, December 23,2073 10:19 AM
To: Swenson, Karen
Cc: peckassoc@comcast.net; Garth Mann
Subject: Re: Draft SEIS
I am not sure the author orthe date of the attached. lt is not ourwork.
From: "Swenson, Karen" <kswenson@eaest.com>
Date: Mon, 23 Dec 2013 13:01:53 -0500
To: Aa ron Goforth <aaron@wriqhtiohnsonllc.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 201.2.
Thanks,
K*r e*'r, S rlue*',l,o'w
s
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 @wrig htjoh nso n I lc, com]
Sent: Wednesday, November 06, 2013 4:11 AM
To: Garth Mann; oeckassoc@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.
2
Aaron
From: Ga rth Ma nn <Garth. Mann @statesmangroup.com>
Date: Mon, 4 Nov 2O\3 20:40:39 +0000
To: "'peckassoc@comcast. net"' <peckassoc@comcast. net>,'Don Coleman' <don@pleasanth rbormarina.com>
Stea rns <ErikS@ Ha reis.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:403-256-4151
M:403-899-9222
F:403-256-6100
7370 Sierra Morena Blvd. S.W
Calgary, Alberta
T3H 4H9
www. statesmanqrou o.ca
, Erik
From : peckassoc@comcast. net Ima i lto : oeckassoc@comcast. net]
Sent: Monday, November 04,20L3 7:34 AM
To: Garth Mann
Subject: Draft SEIS
Garth,
Here is the list of outstanding items prepared by Karen (and supplemented by me)that address deficiencies to
be provided to fA 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
3
Brinnon area average median income (AMl).'The 2012 Jobs Study,Summary of Pleasant Harbor 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 email to 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
4
SUMMARY OF PLEASANT HARBOR IMPACTS
Joe CnrarloN AND
Vnlur AooED To NanoNAL EcotuoMY
a
SU'IMARY OF ANNUA! I'NPACTS OF PTEASANT HARBOR PROJECT ON THE NATIONAI ECONOTIY
YEAR ONE II{ROUGH YEAN SEVEN
TT'UIEtINE
Con:tnrclion 84 Alodtr'
Opersfionr
AiINUAI. TNPACT OF TACUTY
Notionol Economy (PLEASANT HARBOR)
Coasrnrtb, Iotds ITVATCS 235 tlrore I Il
Oupur
lncome
Jobs
Olrrdicxrc l& oJAlCS: 7 2 I . 7 I 3. 7 22. 511, 7 3 I . 8 I I ll{ptc 2ll
Ourput
lncome
Jobs
20tr 2012
$153,61 9,840 7t 51 783733
$37,656,084 $37206,008
865 855
2014 2015
st 48210,235 $1 46,529 77O
$36,337A07 $35,918,130
835 82s
-2017
$143224,551
$35,107,937
807
20L3
sr 49190,991
s36J66,563
E45
2016
$I44,858,31O
$35J08/413
8r6
$27,91O29O
$9,832,653
268
MUTTIPLIER APPI,ICATIONS FOR PR,OJECT
Dirc<r [cJ lndirc<r [b] lnduced [c]Tolol ilulriplier
Sumrmry of llclionol lmpocl Seven Yccr Tofol
Constnrction
Opcrotions (Annuol ot Completioo [Nore 3])
l. Dcroiled industry tcc?or onolyrlr corfoined ln IMPIJqN outpul reportr provlded in originol submission by Edwords Eonomio Appendix B
2. Complction ossumptions included 25% disploccment of locol iobs
3. Operorions moy bcgin in eorller phores bur not ot full cmploynent until yeor sevcn
1769 2169 3.3rrerol s8481
157 41 1.717012681
ABBREVIATED NNTIONAL ECOruOMIC IIVIPNCT
or PITASANT HNNgON RTPORT:
Jos CnrnnoN AND
VnIur AOOrO OUTPUT TO THr NNTIONAL ECOITIOMY
Toble of Conlenls
Key Findings of the Study.
lntroduction and Methodology
The National Economic lmpacl of the Pleasant Harbor Marlna and Golf Resort......,..,
Multiplier Application to Determine Economic lmpacts
lmpact on the National Economy
Assumptions for the ProJect
Economic lmpact from PLEASANT HARBOR Project Construction
2
4
5
5
7
7
8
Conclusion of Construction lrnpacts
Economic lmpact of Employment from PLEASANT HARBOR Projects/Operations
The Tax lmpact of the PLEASANT HARBoR on the Regional Economy......
Conclusion and Findings
Actions to Enhance Long-Term Community Benefits
10
13
L4
15
16
16
L
Key Findings of the Study
This report provides o summory onolysls of the nollonol economlc lmpoc'l of the Pleosont Horbor
Morlno ond Golf Resort (PLEASANT HARBOR), o 22O-ocre residentiol, commerciol, ond
recreotion-bosed development octlvltles ln lhe Jefferson County, WA. PTEASANT HARBOR
development plons lnclude 890 resort residentiol unils, os well os other tourlsm-bosed omenilles
to such os o morltime villoge, golf course, ond heolth spo. Ihe lmpocl of these developments ore
colctloted through o combinotion of primory ond secondory doto sources opplled to economlc
modellng methods-specificolly IMPIAN lnput-output soflwore. The followlng summorlzes ond
highllghts the results of the notlonol impoct study:
Summory of Notlonol Economlc lmpocts:
Over the 7-yeor bulld out of the PLEASANT HARBOR Prolecls-he followlng economic impocts
ore generoted (in 2010 dollors):
a
a
a
Torol ourput: $1.038 blllion
Totol employee compensollon (dlrecl, lndlrecl, lnduced) frorn conslructlon: $254 mllllon
Tolol Employment (Direcl, lndlrecl, lnduced)from Resorl l7-yeor summotlon): 6,010
Annuol Direct Employment Conslructlon: 275
Annuql Dlrect Permonent Employment: 185
a
o
a
Totol Indlrect buslness tox collecllon from construclion: $25.4 mllllon
Upon completion, onnuol property tox collecllon: $3.05 mlllion
Addlng $20 mllllon ln onnuol soles tox revenue upon conplctlon
PROPERTY TAX IMPACTS ON JEFFERSON COUNTY, WASHINGION
l. The totol onnuol property tox of PTEASANT HARBOR remolnlng resort proiects (ossumlng
$305 mllllon ossessment) is $3,050,594.
VALUE OF NEW HOUSEHOLD SPENDTNG ON JEFFERSON COUNTY, WASHTNGTON
l. For every new household movlng lnto lhe counly, lhls produces new reyenue ond exponds
the opportunlty for further retoll recrultment ln Jefferson County, WA. Bosed on my
evoluollon of the number of polentlol retlrees ln fie 30 rnlle rodius of the development-
the potentlol is greot for thls omenlty-bosed communlty.
2, On overoge, one ne\rr' household (ossuming $80,000 hourehold lncome) generotes
opproxlmotely $407 o month ln locol soles lox collectlon (bosed on retoil trode stotistics
for Jefferson County, WA)or $agga yeorly.
2
VATUE OF TOURISM-BASED OPERATIONS ON JEFFERSON COUNTY, WASHINGTON
l. Bosed on dolo from the Stolesmon Group, with multlpller offecfs, the totol dired
commerce from the prolect ot completion b $94,073,312 million onnuolly. This
development wlll lncreose the vlsltor numbers through golf, new morino operolions, ond
reloil-bul more lmportonl, lncreose the retoil copture rota for Jefferson Counly from
visltors on the rvoler. Using the IMPIAN Reglonol Purchoslng Coefflclent, Jefferson County
coptured opproximotely $20.8 million of the totol.
2, The new golf course ol Pleosont Horbor should expect opproxlmolely 551000 rounds per
yeor @ $60 per round-producing $3.3 million onnuolly ln green fees ond $429,000 ln
soles lox.
3
lnlroduction ond Methodology
Thls report provldes o comprehenslve onolysls of economlc lmpoct of the Pleosont Horbor
on lhe Volley Reglon. The impocts of thls orgonlzolion ore colculoted through o combinolion of
prlmory ond secondory doto sources opplled to economlc modellng methods-lncludlng IMPLAN
lnput-oulput softwore ond speclflc spreodsheel models developed by Edwords Economlcs, LLC.
These prlmory sources consist of one-on-one lntervlews with Pleolonl Horbor (PLEASANT HARBOR)
execullves ond confldentlol compony dolo. The stqtlstlcol informotlon ls produced through the use
of publlshed sources, ESRI Buslness Anolyst, ond speclollzed doto reports.
The stolisticol dolo on houslng, buslness geogrophlcs, detoiled populotlon profiles, ond
populotion estimotes/proiections ore reflectlye of Jefferson County, Woshlngton. Detoiled mops
ond tobles ore provided in Appendlx A. Reseorch sources lnclude, but ore not limited to, the U.S.
Bureou of the Census, lhe U.S. Bureou of Lobor Stolistics, ond the U.S. Deportment of Commerce.
The key doto source for the moiorlty of the demogrophic reseordr ls lhrough the oppllcotlon of
lnternotlonolly recognlzed ESRI ArcGlS Buslness Anolysl.-o speciollzed geogrophic informotlon
syslems soflwore pockoge.
4
The Nolionol Economic lmpoct of the Pleosqnt Horbor Morino ond Golf Resort
Thls section of the report documents the economlc lrnpoct of the Pleosont Horbor
(PIEASANT HARBOR) on the nolionol economy. The notlonol economlc lmpoct of PLEASANT
HARBOR includes oll resldentlol ond commerciol developments,lo lnclude such operotlons os golf
courses, morino vllloge, retoil estobllshments, ond resldentlol constructlon. A detolled llst wlth
correspondlng ossumptions of PTEASANT HARBOR proJects ore ldenllfled In Flgure 4. The lmpocts
of these developments ore colculoted throrgh o comblnotlon of prlmory ond secondory doto
sources opplled to economlc modellng methods-lncludlng lAtPtAN lnput-output softwore ond
speclflc spreodsheet models developed by Edwords Economlcs, [LC.
Beyond the introductlon, the reseorch ls dlvlded lnto the followlng sectlong: I ) ossumptlons
for colculotions; 2) oconomic lmpocts of constructioni ond 3) perrnonent impocts of employment.
lnlroduclion
Bosed on my experlence In economlc development reseordt, understonding the economlc
impoct of industriol profecls ls relollvely strolghtforword ond oeeptoble becouse of the creotion
of new lobs-thus, odding new dollors to the locol economy through poyroll expendllures. Yel,
resldentlol/resort developmenls cleorly hove slgnlflcont econornlc lmpocts through constructlon
expendltures, tox generotlon, ond "splllover" effects. Thls ls especiolly true for the operollons of
the Pleosont Horbor, whlch lncludes motor reloil ond lorge residentlql developments, such os the
morino ond golf course, becouse of the tourism lmpocts olong with lhe resldentlol developmenl-
ot the core being rhe obiliry of thelr developmenls to oltrocl dollors from oulslde lhe reglon. ,As
demonstroled ln the demogrophlc secllon, new resldents wlll come inlo the region becouse of the
beoutlful surroundlngs, recreollonol omenlties, ond surroundlng populotlon cenlers. This resort wlll
hove greot obility ,o oltroct permonenl retiree resldents ond weckend tourlsts.
5
The economic impocls of PLEASANT HARBOR development con be loosely divided into the
immediote oreo of the development (the reglonol economy) ond the expendlture Impocts on lhe
notionol economy. The immcdlote oreo refers lo the posltlve externolhles, or splllover benefits,
thot neorby propertles experlence os o result of the imprwement of other oreos, such os
increosed property volues, occess to newly constructed public hfrostructure, etc. Al the reglonol
economlc level ore the multiplier effects of spendlng on fte prolect ltself, consumer expendltures
wlthln the locol economy, ond subsequent lox generotlon from both. Spendlng on conslructlon of
housing, for exomple, leods to lncome for constructlon flrms,lhek suppllers ond their employees-
who, in turn, spend the molorlty of their lncome wlthln the reglon.
Unfortunotely, quontifying the posltive externolltles ossocioled wlth residentiol
developmenl presenls o chollenge. One method used lo meosure economlc lmpocls of new
resldentlol development is properly volue. Other meosures of the spillovers from the development
lnclude increosed tolol household Income (from o comblnollon of more households ond more
eornlng power), which leods to more soles for buslnesses in neorby oreos. lncreoses in populolion
leods to oddltlonol publlc omenities ond infrostructure, which obo beneflt the generol oreo. Yet,
onolyzing chonges in property volues con be dlfflcult slnce so mony foctors, includlng the overoll
economy, lhe strength of locol employers, ond consumer behovlor, ploy slgnlflcont roles. ln my
oplnlon, the most occurote ond conservollve woy lo meosure lhe economlc lmpoct of lhe Pleosont
Horbor is to focus on lhe economlc lmpoct of conslruclion ond new permonent iob creollon os o
resulr of PIEASANT HARBOR ocrlvlries.
Bosed on prevlous $udles conducled by the Stotesmon Group, the rurol tolol woge impoct
of Pleosont Horbor on Jefferson County ofter the completlon of the proiect will be opproxlmotely
$22 mllllon onnuolly. For o rurol locotlon wlth o per copito lncome of $27,000 onnuolly, thls ls o
molor conlrlbutlon to the locol economy, not to lnclude the indlrecl ond induced lmpocts qssocloted
wlth these operollonol ond poyroll expendltures.
6
Mulliplier Applicqlion to Delermine Economic lmpacts
Uslng economic multipliers is o common woy to estlmote the totol lmpocl from o new
development, whelher residentlol or lndustriol. For thls study, fie opprooch uses the commonly
occepted proctice of onolyzlng one-llme construclion lmpocts olong wlth the permonent impocts of
Job creotion ond loxes.
For thls study, o TYPE lll multlplier ls opplled, meonlng thot ftere ore lhree dlmenslons to
economlc muhlpliers used in lmpoct studles. Flrst ls the dlrect effect. Thls ls lhe volue of the initiol
spendlng used to compensote buslnesses, hlre workers ond poy suppliers. For exomple, bulldlng
houslng requlres controclors, englneers, ond bulldlng moterlol suppliers. Next is the Indirect effecl.
This effect results from the increosed demond for goods ond servlces by oll those lndustrles thot
supply lnputs to the octlvlly toking ploce os port of the direct effect. As controctors work to build
o home, they wlll requlre lools, fuel ond supplies from other buslnesses, which, in lurn, will requlre
more inputs for thelr productlon. Flnolly, there is the lnduced, or lncome effect. This is the wove of
spendlng by lhe households lhot receive qddltlonol v/oges or business proflts from the prolect ond
from the lndlrecl oclivlty lhol is stimuloted. As o resuh, business owners ond employees hove more
money to spend ln the generol economy. Thls recycllng of expendltures results in wove ofler wove
of volue flowlng through the economy. The onology often mode ls to rlpples in o pond; os if
odditionol spending ls o stone lhqt couses lncreosed economic denrond to reverberote throughout
the economy.
lmpqcl on the Nolionol Economy
Whhln the IMPLAN model, lhe user hos the obility to opply reglonol purchoslng coefflclent
(RPC) model to identlfy copture rotes for eyery economlc sector. Ihls slmply meons thot bosed on
the existing industry mlx of o chosen geogrophy (ln thls cose, the 48 contlguous stotes) whot
percentoge of the impoct remolns ln the oreo-for this profecf, expendltures for constructlon, The
7
model RPC for fils study vorles from I OOo/o for resldentlol constructlon lo 88.2 %o tor he tourism
coplure-which meons thot lhe impoct numbers occounl copture oll impocts for conslruclion but
11.8o/o is "leoking" oul of lhe notion in lhe tourlsm sector. Thls slighl leokoge is logicol due to the
geogrophlc locollon of the developmenl. These leokoges 016 coplured In the reruhs. Accordingly,
these impoct numbers ore speclflc to the reglon/notlon.
Assumplions for the Proiecl
ln order to meosure the economic impocl ossocloted vith the proiect, o boseline of
lnformollon wos gothered through doto collected from the Pleosont Horbor. Through thls process,
q foundotlonol sel of ossumptlon needs were ldentlfled. These cotegorles ore presented ln Flgure
4. Of note, oll future impoct results ln this section of the report ore defloted to 201 0 dollors.
8
Figure 4: lnformqtion Gothered lo Colculqle Nolionol Economic lmpoct
of PLEASANT HARBOR Development
TOTAL CONSTRUCTION EXPENDITURES AND EMPTOYMENT (7 YEARS) (NAICS: 2361
Constructlon Costs $300,00q000
Number of Dlrect Employees 275 (onnuol overogel
Poyroll Esrimores $'14,00q000 (onnuol)
Tourirm ond Lelsure Employment (NAICS:731)
Totol Employees Upon Completion.. ,,,,,.,,.,.67
Hoseiroliry (NAICS: 721 )
Toto! Employees Upon Completion...40
Reslouront ond Food Servicos (NAICS: 7221
Totol Employees Upon Completion.. ,.....,..,.26
Med-Seo/Grotto (NAICS: 7l 3l
Totol Employees Upon Completion., ..,,,......22
Moinlenonce ond Secudtv (NAICS: 81 l )
Totol Employees Upon Complelion.. ...........19
Environmentol Slondords ond Sofelv Mqnogement (NAICS: 54ll
Totol Employees Upon Complellon.. ..,....,...17
TOTAL PERMANENT OPERATION EMPTOYMENT
NUMBER OF PERMANANT EMPLOYEES..........t9r
$5,500,qr0 (Stotesmon estimqte)TOTAT ANNUAL PAYROLL....
9
Economic lmpqct from PLEASANT HARBOR Proiect Conslruction
ln order to more cleorly present the onnuol impocts from the profects, the followlng tobles
provide detoiled informotion. lncluded ln lhe tobles ore tolol oulpul, lobor lncome, employee
compensollon, employment, lotol volue odded lmpoct, ond indlrect buslness loxes. There is olso o
breokdown of direct, lndirect, ond induced impocts lo clorify the Interpretotion of rhe totol
lmpoct. Even more detoll con be exlrocted from the IMPLAN Output Reports (ln Appendlx B)-to
lnclude impocls lo individuol lndustrlol seclors from lhe profecl lnveslmenl. The IMPLAN model
condenses economlc sectors Into grouplngs of North Amerlcon lndustrlol Clossificotlon System
(NAICS) codlng lnto monogeoble flelds. For exomple, ln 201 l, opproxlmotely 32 lobs were
creoted ln food ond beveroge slores due lo constructlon expendltures from thls prolecl (seclor
413 in IMPLAN, NAICS 722110,7224101.
The following tobles presenl the breokdown of economlclmpoct beglnnlng with the 7-yeor
totol followed by o yeor to yeor breokdown:
ECONOMIC IMPACT: Total Constructlon 2011-2017 (2010 dollarsl
362,O21,L76 387,15L,9L7 289,074,318 1,038,247,430
121,395,58593,359,933 91,230,593 305,986,203
71,785,785 LO?,477,218 79,237,54O 254,50O,542
853,587 L3,826,954 12,771,445 25,45t,985
138,435,145 19L,237,LO6 156,305,999 485,978,L52
L,768,7 2,168.9 1,910.0 5,847.7
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10
ANNUAT ECONOMIC IMPACT FROM CONSTRUCTION
ECONOMIC IMPACT: Total Resort Constructlon 2011 12010 dollarsl
ECONOMIC IMPACT: Total Resort Constructlon 2012 (2010 dollarsl
ECONOMIC IMPACT: Tota! Resort Constructlon 2013 (2010 dollars)
53,554916 57,283,278 42,771,648 153,619,840
13,813,503 17,961,779 13,498,558 45,273,939
11,724,0ut0,621,476 15,310,564 37,656084
t47,32L 2,378,6?2,201,765 4,714,09L
20,482,964 28,295,581 23,L27,113 71,905,680
261.7 320.9 282.6 865.2
52,924,692 56,598,612 42,260,429 151,783,733
13,648,499 17,747,095 t3,397,219 44,732,814
10,494,526 15,127,568 11,583,915 37,205,008
146,458 2,372,4L8 2,191,315 4,710,L91.
20,238,146 27,957&At 22,85O,7L2 71,046,243
258.6 317.1 279.2 854.9
52,299,588 55,930,116 41,761,284 149,990,991
11,487,294 t7,537,48A 13,179,691 44,204,464
1o,370,574 14,948,&)4 111447,O95 36,766,563
144,728 2,344,397 2,165,433 4,654,559
19,999,110 27,627,174 22,590,919 70,207,L03
255.5 313.3 275.9 844.8
11
Dlrect lndlrect lnduced Total
Output lmpact
Labor lncome lmpact
Employee Compensatlon
lmoact
lndlrect Buslness Taxes lmpact
Total Value Added lmpact
Employment lmpact
Direct lndirect lnduced Total
Output lmpact
Labor lncome lmpact
Employee Compensatlon
lmoact
lndirect Buslness Taxes lmpact
Total Value Added lmpact
Employment lmpact
Direct lndirect lnduced Total
Output lmpact
Labor lncome lmpact
Employee Compensatlon
lmpact
lndlrect Buslness Taxes lmpact
Total Value Added lmpact
Employment lmpact
ECONOMIC !MPACT: Total Resort Constructlon 2014 (2010 dollarsl
ECONOMIC IMPACT: Total Resort Construction 2015 12010 dollarsl
ECONOMIC IMPACT: Total Resort Construction 2016 (2010 dollarsl
51,689,128 55,277,277 4L,27?,93O L48,24O,235
13,329,866 L7,?72,T16 13,025,853 43,688,497
10,249,524 L4,774,4)4 11,313,480 16,?17,407
143,039 2,317,8'2,140,157 4,@O,228
19,763,672 27,104,@9 22,117,246 69,387,618
252.5 309.7 272,7 834.9
31,092,716 54639,t161 40,797,594 146,529,770
13,176,059 17,t12,782 L2,875,554 43,184,394
10,131,260 14,503,930 LL,182,94O 35,918,130
141,388 2,290,2lt8 2,115,463 2,547,L49
19,537,608 26,989,Q4 22,059,739 68,585,990
249.6 306.1 269,6 825.3
@E@ffi7Grtr
EN
EW
I?II;EilNTEIffi
50,509,900 54,016,193 40,312,216 144,858,310
L?,025,760 16,937,*9 12,729,691 42,691,791
10,015,693 14,437,y4 11,055,376 35,508,413
ti3g,77S 2,264,172 2,OgL,332 4,495,279
19,314,742 26,681,775 21,809,104 67,804,621
246.8 302.6 266.5 815.9
L2
Dlrect lndirect Induced Total
Output lmpact
Labor lncome lmpact
Employee Compensatlon
lmpact
lndirect Business Taxes lmpact
Total Value Added lmpact
Employment !mpact
lndirect lnduced Total
Dlrect !ndlrect lnduced Total
Output lmpact
Labor lncome lmpact
Employee Compensatlon
lmDact
lndlrect Buslness Taxes lmpact
Total Value Added lmpact
Employment Impact
ECONOMIC IMPACT: Total Resort Construction 2017 (2010 dollarsl
Conclusion of Conslruclion lmpqcls
Once ogoin, il is importont to note thot the tolol economlc lmpocts from conslrucllon ore
not permonent, but yeor-to-yeor bosed on the octuol expendlrures ln construcllon. Thol sold,
bosed on my economlc development reseorch lhrough my yeors of experlence, lndlrecl ond
induced employment from numerous sequentlol yeors of conslrudlon lends to be permonent ln
noture. Of course, chonges in development plons wlll chonge the voJue lhe onnuol lmpocts of
PLEASANT HARBOR.
49,gqo,216 53,406,980 ,9,977,337 14?,224,551
12,878,852 L6,746,124 12,585,125 42,210,302
9,902,732 L4,274,5L4 10,930,690 35,107,917
138,199 2,239,6,i6 2,067,745 4,444,580
19,096,904 26,380,849 21,562,146 67,039,897
244,O 299.2 263.5 806.7
13
Dlrect Indlrect Induced Total
Output lmpact
tabor lncome lmpact
Employee Compensation
lmpact
lndirect Euslness Taxes tmpact
Total Value Added lmpact
Employment lmpact
Economic lmpqcl of Employment from PLEASANT HARBOR Proiects/Operotions
Bosed on the employment doto provided by the Pleosont Horbor, the followlng toble
presenls lhe economlc lmpoct of employment vlo poyroll expanditures ln lhe notlonol economy.
When speclflc poyrol! doto for o seclor ls not ovollqble, this sludy opplles lhe woges used ln the
IMPLAN model. Employmenl flgures for the retoil sector ore bosed on the phosed growth
ossumptions provided by PTEASANT HARBOR.
ECONOMIC IMPACT: Annual Emolovment lmoacts from Ooeratlon of Pleasant Harbor
11,016,145 6,325,318 10,568,827 27,9L0,290
51650,157 2,291,043 3,135,479 Lt,276,679
4,999,223 1,,947,4?2 2,996,999 9,832,653
879,155 220,196 548,O24 t,647,176
7,146,129 3,501,181 5,7t4,699 16,361,999
156.5 41..4 59.8 267.8
t4
Direct lndirect lnduced Total
Output lmpact
Labor lncome lmoact
Employee
Compensatlon lmpact
lndlrect Buslness Tax
lmpact
Totalvalue Added
!mpact
Emolovment lmoact
The Tqx lmpoct of the PIEASANT HARBOR on the Regionql Economy
The PLEASANT HARBOR proiect occurs ln Jefferson County, Woshlngton. Accordlngly, the tox
lmpocls ore slgniflcont. These lmpocts ocour moinly in the form of property ond solcs lox. As
noted in the prevlous secllon, lndlrect buslness tdxes ore colculoted wlthin the IMPIAN model
during lhe construction ond employment. !n order lo more occurotely estimote properly ond soles
tox, spreodsheets were developed to copturo the impocts. Detolled tobles of tox lmpocts ore
provlded ln the onnuol lmpoct reports submltted ln Appendlx B.
Bosed on IMPIAN outpul reporls, the onnuol soles tox impoct on the region is
opproximotely $20 million (2010 dollors)--ossumlng lhe ossessment of the Pleosont Horbor
proiocl upon completion is $300 million. The moiorlty of the lrnpoct ls o result of constructlon
expendilures ond ossocioted poyroll spendlng. The economlc lmpoct study conducted by the
Slotesmon Group meosured direct commerce for the resorl ot opproximolely $91 mltlion
onnuolly.
Yet, thls does not include the impocts of new resldents movlng lnto the oreo qs o resull of
new houslng ovollobillly. Bosed on the eorller srudy performed by Edwords Economics, on
oyeroge, one nev/ household (ossuming $801000 household lncome) generotes opproxlmotely
$407.00 q month in locol soles tox collection or $a88a yeorly. This onolysis is importont to note
os these qdditionol PLEASANT HARBOR proiects only odd to the potentiol of moximizing those
soles tox dollors.
15
Conclusion ond Findings
Over lhe 7-yeor build out of the PLEASANT HARBOR Profeds-he following economlc impocts
ore generoted (in 2010 dollors):
o Totol Output: $1.038 billion
o Totol employee compensotlon (dlrect, lndlrect, lnduced) from conslruction: $254 million
Totol Employment (Direct, lndlrect, lnduced)f rom Resort l7-yeor summolion): 6,010
Annuol Direct Employmenl Construcllon: 275
Annuol Dlrect Permonent Employment: 185
a
a
a
a
Totol indirect buslness tox collectlon from conslrucllonr $25.4 milllon
Upon completlon, onnuol property tox collectlon: $3.05 mllllon
Adding $20 million In onnuol soles lox revenue upon completion
Actions lo Enhonce Long-Term Community Benefits
From o long-term eommunlty development stondpolnt, the followhg lndlrect beneflts wlll be
provlded from this proiect:
o This proiect is o cotolyst for encouroging furlher economlc ond communlty development ln
lhe reglon through the signlflconl lnvestment of PIEASANT HARBOR.
o lmproved publlc occess to Hood Conol lhrough the mqrlno ond the development of new
recreolionol octivltles thot will enhqnce the quollty of llfe for locol resldents.
o The development of new houslng thol utllizes environmenlqlly sound bulldlng techniques
ond moterlols in the conslructlon ond operotions of ossochled focilities.
o Employment during the construcllon ond operollng phoses of the project to provide job
opportunitles for the rurol resldents.
16
. Durlng the construclion ond operoting phoses of the proied, buslnesses bosed in Jefferson
County wlll beneflt from expendltures dlrectly from the profect ond lndirectly from poyroll
expcndilures.
o Enhoncing the morinos ond recreotionol booting industry by offcrlng lmproved omenilies
to booters.
o Provldlng needed economlc sllmulus by oltrocting new resldents, who wlll ulllhc shopplng,
enterloinment ond business services In the reglon.
o Exponding the populotlon bose by oddlng new resldents, who would oct os workers,
toxpoyers ond shoppers in lhe community.
o Rolslng reoJestote property volues on neorby properly/neighborhoods, ond in so doing
help odding volue to the locol tox bqse.
o Expondlng the ronge of horslng choices ovolloble to resldenls ond non-resldenls looking
for new houslng opportunities.
o Addlng positively to the locol tourlsm industry through golf course, reloil shopping,
restouront, ond morino support servlces.
o Provldlng new lox revenues for lhe county ond schools.
Eoch of these ocllons will help lo ensure lhot lhe proiec't hos positive Iong-lerm economic ond
communlty development lmpoct on Jefferson Counly, Woshlngton.
77
W
\UTlRIGHT JOHNSON
professional authors and analysts
An Economic Analysis of Earnings
Pursuant to Jefferson Counry Board of County Commissioners' Condition
639 for the Pleasant Harbor Master Planned Resort (MPR)
By
Wright Johnson ,LLC
November 2013
205 Wotth Avenue, Suite 201, Palm Beach, FL 33480
Telephone: (561) 282-6099
Email: info@wnghtj ohnsonllc. com
1. Introduction
Wnght Johnson, LLC, ("WJ") has been retained to perforrn an economic assessment of earnings of
the Pleasant Harbor Master Planned Resort (A.{PR) in conformity with the Jeffetson County Boatd
of County Commissioners' condition 639, which states:
"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 8070 or less of the Brinnon
^rea ^ver^gemedian income (AMD. The developer shall provide affotdable housing (e.g., no more than
30o/o of. household income) for the Brinnon MPR workers roughly proportional to the
number of iobs created that earn 80%o ot less of the Brinnon atea AMI. The developer may
satisfy this condition through 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 )obs. The analysis urili2s5 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 opetate
within the following industry clusters:l
Non-Residential Building Construction - NAICS code 2362: This industry comprises
establishments primarily tesponsible for the construction (including new work, additions, alterations,
maintenance, and repairs) of commercial and institutional buildings and related stfuctures, 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
buildings. Included in this industry are commetcial and institutional building general contractots,
commercial and institutional building fot-sale builders, commetcial and institutional building design-
build ftms, and commercial and institutional building ptoject construction management fums.
Utility System Consuuction - NAICS code 2371: This rndustry comprises establishments
primanly engaged in the construction of water and sewer lines, mains, pumping stadons, treatment
plants, and storage tanks. The work performed may include new work, reconstruction, rehabiJitation,
and repairs. Specialty trade contractors are included in this group if they are engaged in activities
primarily related to water, sewet line, and related structures construction. All structures (including
buildings) thatare integral parts of water and sewer networks (e.g., storage tanks, pumping stations,
water treatment plants, and sewage treatment plants) are included in this industry.
A summary of the proposed project costs is as follows:
1 NAICS code def,nitions provided by the U.S. Census Bureau.
Page ll
Building Construction: Construction of project buildings will last approximately twenty-elght (28)
months and the total hard construction costs of the buildings will be $9,854,600 (n 2013 dollats).
As the current RIMS II multipliers are based on 2070 data, we must deflate the construction
expenditures to 2010 dollars. According to the Tumer Construction Building Cost Index,
construction costs have been on a slightincrease from 2010 through 2013. The costindex un2010
was 799 vs. the 2nd quarter 2013 cost index of 8592, which means the costs of construction is higher
tfl 201,3 than 2010. Therefore, the construction costs for this project will need to be futhet reduced
to 2070 dollars.
2nd Quarter 2013
1st Quart€r 2013
4th Quarter 2012
3rd Quarter 2012
201.2
2011
2010
2009
2008
2007
2006
2005
2o,o4
2003
2@2
2001
2000
830
812
799
832
908
854
793
7t7
655
621
619
61:I
595
1.18
1"1S
o.84
o.73
2.1
1.6
-4.O
€.4
6.3
7.7
10.6
9.5
5.4
o.3
1.O
3.O
4.4
Tmter
$7,845,500
$501,500
$753,800
$753,800
Summa of Estimatcd liuiklin Constructinn Costs
2 www.tumerconstruction.c om f cortert ffiles/Costlndex201 3Qrtr2.pdf
P age l2
Dcscription Alnount
CONSTRUCTION
. Maritime Village
o Pleasant Harbor Bistro
o Reunion House
o Harbor House
TOTAL CONSTRUCTION COSTS
lnder
859
8.lS
83S
832
2010 Dollars2013 Dollars
fig,124,630$9,954,600
To convert this figure to 2070 dollars we use the 2013 index of 859 and divide it by the 2010 index
of799. Thisgivesusafigure of 859/799 = 1.08. Toconvertthe$9,854,600rn2013dollars to2070
dollars, the 2013 expenditute is divided by 1.08, to yield $9,724,630.
Inftastructure Consttuction: Infrastructure constnrction will last approximately twenty-seven (27)
months and the total hard construction costs of the infrastructure will be $10,756,900 (in 2013
doilars). The current RIMS II multipliers are from 2010 therefore we must deflate the expenditures
to 2070 dollars.
To convert this figure to 2010 dollars we use the2073 index of 859 and divide it by the 2010 index
of 799- This gives us a figure of 859/799 = 1.08. To convett 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 ditect and indirect
employment associated with the proiect.
. 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
s325,125
$186,735
$169,500
$2,348,140
$1,064,000
$2,561,400
$4,102,000
Summary of Estimated Infrastructure Construction Costs
2010 Dollars2013 Dollars
$10,756,900 $9,960,093
Page l3
Building Construction Expenditure 2013 Dollars vs. 2010 l)ollats
Infrastructwe Construction Expenditure 2013 Dollars vs. 2010 Dollars
Amount
3. Findirgr & Calculations
Shown in the chart below are the actual RIMS II final demand and employment multipliers for
Jefferson County, WA. These multipliers are used to estimate employment associated with the
proiect.
RIMS II Multipliers (2002/2010)
Total Multipliers for Output, Earnings, Employment, and Value Added by Detailed Industry
effetson WA
Buildrns Construction
Looking at the construction sector OJAICS code 2362), the final demand multiplier is 9.7481 and
the employment multiplier 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 figute 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 ditect and inditect jobs.
The employment multiplier ts 7.5147, which means that for every 1 direct iob, there arc 1.5747 totzl
jobs. Hence for every 1 direct iob, there are 0.5747 indirect iobs. Of the total 88.95 jobs, there are
58.72 direct jobs and 30.22 ndlrect jobs.
Construction of Inftastructure
Looking at the infrastructure construction sector (I{AICS code 2377), the final demand multiplier is
9.7481and the employment multiplier ts 1.5147. The final demand multiplier is used to determine
the total number of jobs produced based on t1le expenditures fot construction of the development
infrastructure. This figure is $9.960 million (in 2010 dollars). Therefore there would be $9.960
times 9.7487, or 97 .09 jobs supported by this project, including direct and indirect jobs.
The employment multiplier is 1,.5747,which means that for every 1 ditect job, there ate7.51,47 total
jobs. Hence for every 1 ditect job, there arc 0.5747 indirect jobs. Of the total 97.09 jobs, thete are
64.10 direct jobs and 32.99 ndlrect )obs.
Tables 3-1 and 3-2 show the economic impact of the construction expenditures fot the 20 maior
industdal classifications in the RIMS II input/output model.
Industry
Multiplier
Final Demand Ditect Effect
Output
(dollars)
Earnings
(dollats)
Employment
(iobs)
Value-added
(dollars)
Eatnings
(dollars)
Employment
(iobs)
Construction
(230000)
1.4324 0.4448 9.7481 0.7570 1.3304 1.5147
Page l4
Industry group
Agdculture, forestry, fishing
Mining
Utilities
Construction
Manufacturing
Wholesale trade
Retail trade
Transpottation and warehousing
Information
Finance and insurance
Real estate and tental and leasing
Profes sional, scientific, services
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 186.04$27,340,773$8,488,884
Employment
0.29
7.26
0.56
723.39
4.88
7.73
79.54
1.24
0.88
1.05
4.60
3.05
0.02
1.85
7.16
7.18
7.17
1.50
6.22
3.60
1.47
Output
43,895 $
208,023
255,735
19,174,420
1,,154,626
250,010
7,757,703
146,952
1gg,4g1
322,532
1,316,946
482,843
5,725
122,142
64,888
782,474
49,620
747,227
377,878
484,752
Earnings
9,542
43,995
45,803
6,410,558
217,566
72,522
547,732
55,346
47,772
66,797
53,437
1gg,g3g
1,908
47,772
20,993
328,257
17,176
40,078
1.20,234
141,227
77,457
$
Table 3-1 shows that thete will be atotal of 186.04 new jobs cteated from the constuction of the
project buildings and infrastructute. Total output will inctease by about $27.34 million, while total
household earnings will inctease by about $8.49 million.
Table 3-2 shows that output per nev/ worker for the construction sector would be about $155,394,
with average annual earnings of about $51,953. For all newworkers, the corresponding figures are
$746,963 and $45,630.
Page l5
Table 3-L. fncrease in Employment, Output, and Earnings for $19.085 million
(2010 dollars) in Construction Expenditures
Industry gfoup
Agdculture, forestry, fishing
Mining
Utilities
Construction
Manufacruring
Wholesale uade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Professional, scientiftc, services
Management of companies
Administtative and waste management
Educational services
Health care and social assistance
Arts, entertainment, and recreation
Accommodation
Food services and drinking places
Other services
Households
Total 186.038$146,963$45,630
Employment
0.294
1,.262
0.55s
1,23.392
4.884
1.726
19.547
1.237
0.878
1.053
4.603
3.050
0.027
7.849
1,,r57
7.t76
1..172
t.496
6.220
3.603
1.470
Output/
Employee
$ 149,351 $
'1,64,902
460,487
155,394
236,420
222,034
89,950
t7g,g27
226,097
306,159
286,070
1.59,323
)1r 1r1
66,047
56,1.06
709,043
42,345
g4,3gg
60,755
134,534
Eamings/
Employee
32,467
34,796
82,474
51,953
44,549
64,407
29,030
44,753
54,348
63,406
1.1.,609
61,952
g0,g0g
25,800
78,152
45,745
14,658
26,796
19,331
39,795
7,792
4. Conclusion
The purpose of the analysis is to estimate the number of direct and indirect jobs associated with the
MPR project and detetmine
^vet^ge
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
ptoject that will earn an
^vet^ge
wage of 80o/o ot less of the Brinnon atea ayera;ge median income
(AMD.
The Brinnon
^rea ^ver^ge
median income is estimated at $33,0773 and 8Oo/o of this AMI amount is
estimated at$26,461,. Table3-2showsthatanestimated15iobswillhave avetage earnings of 80o/o
of less of the Brinnon area AMI. This includes direct and indirect jobs associated with the MPR
project and is summadzed below, with average wages for each industry Soup.
3 U.S. Census Bureau, 2007-2011 American Community Survey. Data f.or Brinnon, Washington.
Page l6
Table 3-2. Output and Earnings Per NewWotker for $19.085 million (2010 dollars) in
Construction
Total Ditect and Inditect obs at or Below the Brinnon Atea AMI
5. About RIMS II Final Demand Methodology
Industry gfoup
Real estate and rental and leasing
Administrative and waste managemeot
Educational services
Arts, entertainment, and recreation
Food services and &inking places
Total
Employment
4.60 $
1.85
1.76
7.t7
6.22
15.00 $
Earnings/
Employee
11,609
25,800
19,152
14,658
19,331
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
requires a systematic analysis of the economic impacts of these projects and progtams on affected
regions. In turn, systematic analysis of economic impacts must account fot the inter-industry
relauonships within regions because these relationships largely determine how regional economies
are likely to tespond to project and program changes. Thus, regional input-output (I-O) multipliers,
which account for inter-industry relationships within regions, ate 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 (X.egional Industdal Multiplier System), which was based on the
work of Gamick and Drake. In the 1980s, BEA completed an enhancement of RIMS, known as
RIMS II fi.egional Input-Output Modeling System), and published a handbook for RIMS II usets.
In 7992, BEA published a second edition of the handbook in which the multipliers were based on
more recent data and improved methodology. In 7997, BEA published a thitd edition of the
handbook that provides more detail on the use of the multipliers and the data soutces 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 putchased 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
ouput structure of neady 500 U.S. industties, 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 fot
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 multipliers relatively low. Empirical tests show that estimates based on relatively
expensive surveys and RIMS Il-based estimates ate similar in magrutude.
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 rmpottant to keep rn mind that, like all economic
P age l7
impact models, RIMS provides approximate ordet-of-magnitude estimates of impacts. RIMS
multipliers are best suited for estimating the impacts of small changes on a regional economy. For
some applicad.ons, 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 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 ouput, 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 tegional rmpacts of military base closings.
State transportation departments use RIMS II to estjmate the regional impacts of airpot
construction and expansion, In the private-sector, analysts and consultants use RIMS II to estimate
the regional impacts of avaiety 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 industdes. Input requirements that are not produced in a study reg'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 first stepr the producer portion of the national I-O table is made tegion-specific by using six-
digrt NAICS location quotients Gar.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 petsonal
income data @y place of residence) are used to calculate LQs in the service industries; and BEA's
wage-and-salary data (by place of work) ate 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 ate
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
wotking in the region but residing outside the region. The household column coefficients, which ate
based on the personal consumption expenditure column of the national I-O table, are adjusted to
account for regional consumption leakages stemrning ftom personal taxes and savings. In the last
step, the Leontief inversion approach is used to estimate multipliers, This inversion approach
produces output, earnings, and employment multipliers, which can be used to trace the impacts of
changes rn Frnal demand on and inditecdy affected industries.
Accuracy of RIMS II
Empirical evidence suggests that RIMS II commonly yields multipliers that xe not substantially
different in magnitude from those genetated by regional I-O models based on relatively expensive
surveys. For example, a comparison of 224'ndustry-specific multipliers ftom suwey-based tables for
Colorado, Washington, and West Virginia indicates that the RIMS II avetage multipliers
overestimate the average multipliers ftom the suwey-based tables by approximately 5 percent. For
the majority of individual industry-specific multipliets within these states, the difference between
Page l8
RIMS II and survey-based multipliets 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. First, the accessibiJity 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 aggregation errors, which often
occur when rndustries ate combined. Third, RIMS II multipliers can be compared across areas
because they ate based on a consistent set of estrmating procedures nationwide. Fourth, RIMS II
multipliets are updated to reflect the most recent local-arca wage-and-salary and personal income
data.
Overview of Different Multipliets
RIMS II provides users with five tJpes of multipliers: final demand multipliers for output, for
earnings, and for employment; and direct-effect multipliers for earnings and for employment. These
multiphers 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 ate derived. In this table, each column entry indicates the change in output in each row
industry that results fiom a $1 change in final demand in the column industry. The rmpact on each
row industry is calculated by multiplying the final demand change in the column industry by the
multipliet 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 for each row except the
household row.
RIMS II provides two rypes 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 ava:lable.
In the final demand earnings multiplier table, each column entry indicates the change in eamings 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 multipliets fot each row. The total impact on regional earnings is calculated by muttiplyrng the
final demand change in the column industry 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 multipliers and direct effect multipliers. These multipliers are derived from the table
of final demand output multipliers.
The final demand multipliets for empioyment 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 multiplying the final demand
Page l9
change in the column industry by the multiplier fot each row. The total impact on regional
employment is calculated by multiplyi"g the final demand change in the column industry by the sum
of the multipliers for each row.
The direct effect multipliers fot employment can be used if the data on the initial changes in
employment by industry arc avatlable. 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 fot the tow.
Choosing a Multiplier
The choice of multiplier for estimating the impact of a project on output, earnings, and employment
depends on the availabtlity of estimates of the initial changes in final demand, eamings, 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 multipliets. In theory, all the impact estimates should be
consistent. If the available estimates are limited to irutial changes rn final demand, the user can select
a fir,al demand multiplier for impact estimation. If the available estimates are limited to initial
changes in earnings or employment, the user can select a direct effect multiplier.
The EB-5 regulations provide that "jobs cteated indirsgtly" by a tegional centet- affiliated business
may be credited to foteign investors who made a qualifying investment in the business. To show
this job creadon, "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 tesulting from a regional center- affi.liated investment project.
Page ll0
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 \0fashington
Final Report
Prepared for
Puget Sound Regional Center,LLC
By
Wrrght Johnson,LLC
August 201.3
205 Worth Avenue, Suite 201, Palrn Beach, F'L 33480
Telephone: (561) 282- 6099
Email: info@wrightiohnsonllc.com
1
August 9,2013
1. Executive Summary
This impact economic analysis report was prepared to evaluate the economic impacts of
a specific project located within a three-county Ne within the State of $Tashington,
which is being developed undet the sponsorship of the prospecuve, USClS-approved,
Puget Sound Regional Centet ('PSRC"). The project involves the construction of a
master-planned resort community located in Brinnon, Washington. This proiect's
activities will be collectively referred to as "Pleasant Harbor Marina and Golf Resort".
The Pleasant Harbor Marina and Golf Resott will result rn the creation of.213.5 new jobs
ftom the construction of the development.
The Pleasant Harbor Marina and Golf Resort will inctease investment in the region by a
one-time amount of $29,0351391.. This impact analysis finds that the project will
generate significant and positive economic benefits for the regional economy.
The Pleasant Harbor Marina and Golf Resott would result in annual growth in the
regional economy by a garn of $916931000 in regional household earnings.
The regional economy will experience incteased need for business services of $117231000
annually.
o The regional economy will experience annual increased demand on utilities of $1471000.
Increased demand fot 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 $1.5061000.
Individual investors in the Pleasant Harbot Marina and GoIf Resort will be assigned 12.6
jobs each. This project ptovides enough jobs to meet or exceed the requirements of the
EB-5 program.
The following chat summadzes the total permanent new jobs fot construction of the
project. These figures assume that the expenditures for the project given in this table are
met.
a
a
o
O
o
o
a
a
2
August 9,2013
Proiect (with
IVATCS Code)
Proiected
Exoenditure/Revenue
(in 2010 dollars)
($ 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
Non-Residential
Building
Construction
(NATCS 2362)
$9.1 25 11.1851 60.4 41.7 102.1
Utility System
Construction
(NATCS 2371)
$9.960 11.1851 65.9 45.54 111.4
213.5Grand Total:
Note: Expendrtures/Revenue within this chat 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. Execuuve Summary 2
5
6
6
1-1 Introduction ...
1-2 Industry Cluster Definitions
1-3 Discussion of County Gtouping Selected based on Commutet Data
1-4 Effect of Household Earnings, Demand fot Business Services, Utiliues, Maintenance and
C ons truction, and N ew Supplier /Vendor Relationship s with Manufactutets
1-5 Discussion of Unemployment...
7
9
2. Methods & Assumpuons.....l0
IO
r0
r5
I5
I6
17
r8
26
30
2-1 Assumptions
2-2 Simulation Inputs
2-3 RIMS II Final Demand and Employment Multipliets
2-4 Calculation of Employment Results Using Final Demand Multiplier.....
2-5 Guidelines and Methodology for Construction Employment Creation
2-6 Economic Impacts of Pleasant Harbor Marina and Golf Resort........
2-7 Yeiftcation of Inputs
3. About RIMS II Final Demand Methodology..............
EXHIBIT 1 - Unemployment rates in the Project Region
4
August 9,2013
i-1 Introduction
Wright Johnson, LLC, ("WJ") has been retained by Puget Sound Regional Center ("PSRC") to
petform an econornic assessment of a planned investment of the construction of a specific project
located within the State of Washington. The following rndustry clusters were analyzed as part of this
project:
1,. Non-Residential Buildrng Construction - NAICS 2362
2, Utility System Construction - NAICS 2371
PSRC is proposing an EB-5 regional center with a geographic area encompassing the following three
con ;guous counties within the State of Washington: Jefferson, Clallam, and ICtsap. . !ry analyzed
commuter data to determine commuter patterns fot the wotkfotce for the three affected and
contiguous counties. Based on information provided by PSRC, WJ performed an analysis fot the
target industry economic clustets in the proposed project specific geographic ateas, RIMS II was
utilized,
The focus of the study is analyzing the Regional Centet impacts of the construction of a master
planned resort community located rn Bnnnon, Washington within the county ofJefferson.
WJ used RIMS II to model the total economic r.mpact associated with vanous levels of site
investment employment. To quantify the net economic impact (direct and inditect) of the
development, RIMS II modeled the following ditect effects:
a Direct E,ffects of constructron employment, household earnings, taxation and output
WJ examined the project provided by PSRC using a multi-industry sector, segtegated-tegion model.
Using this model, WJ was able to develop independent forecasts for the proposed use of the project.
ThLrs segregation of forecasts allowed !ry/RIMS II to capture the total net effects of the proposed
target industry. By analyztne the regional developments with drfferent undedying assumptions for
the specific industries, WJ established a realistic ptediction of a potential outcome.
The RIMS II economrc model employed for the economic and job creation impact assessment
study, forecasts the economic impact a specific event will generate thtoughout a determined area -
the three counties withrn $Tashington. Over time, competitive pressrues emerge and then tend to
revert back to equilibrium. The process, 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 larger economy creating a new level of economic
equrLbdum. In the long run, the project will materially alter the PSRC geographic area by the
substantial amount of new investment and related business development activities, includrng a
coresponding higher level of output, taxation, investment, employment and household earnings in
the regional economy. This report is rntended to demonstrate the increased economic rmpacts
within the PSRC region.
The proposed Pleasant Harbor Marina and Golf Resort will require a total expenditure of
$29.035.391 to provide fot consftuction for the development. $8,5001000 of the total investment
5
August 9,2013
will be through EB-5 investot funds
1-2 Industry Cluster Definitionsl
Non-Residential Building Construction - NAICS code 2362: This industry comprises
establishments primariiy responsible fot the construction (including new work, additions, alterations,
maintenance, and repairs) of commercial and institutional buildings and related structures, such as
stadiums, grain elevators, and indoot swimming facfities. This industry includes establishments
responsible for the on-site assembly of modular or prefabricated commercial and institutional
burldings. Included in this industry are commerctal, and institutional buitding general contractors,
commercial and insututional burlding for-sale builders, commetcial and institutional building design-
build fums, and commercial and institutional building project construction management firms.
Utility System Construction - NAICS code 2371: This industry comprises establishments
primarily engaged in the construction of watet and sewet lines, mains, pumping stations, treaffnent
plants, and storage tanks. The wotk performed may include new work, reconstruction, tehabilitation,
and repairs. Specialty trade contractors are included in this group if they are engaged in activities
primarily related to water, sewer line, and telated stfuctures construction. AII structutes (including
buildings) that are integral parts of water and sewet netwotks (e,g., stotage tanks, pumprng stations,
water treatment plants, and sewage treatment 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, Wright Johnson uses U.S. Census Bureau data
on commuting 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 whete the preponderance of workers lives in each
county, ranking them by absolute number of commuters to the county. A cutoff threshold was
detetmined for 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 patterns tend to be more spatially concentrated than the flow of goods, which have
much wider dispersion into and out of the region. However, a tadeoff 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 far beyond-their botders2.
' NAICS code definitions provided by the U.S, Census Bureau
2 USCiS has interpreted that while the regional center's EB-5 capital investment acuvity may produce a legitimate
economic benefit outside its formal jurisdictional regional center boundaries, the data set used to estimate iob creation
should fit within the intended impact of the capital investment project. $7here appropriate, regional data should be used
6
August 9,2013
Consideration must be given to the sizing of the study region so that impottant regional effects ate
not neglected in the analysis. If a tegion is sized too small, much of the effect of a project wrll be
obscured as expenditures on goods originating outside the region ftnown 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 workers ftom Jefferson County, Clallam County and I(itsap County,
WA that corrunute into Jefferson County is 96.98% 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 E ffect of Household Earnings, Demand for Business Services, Utilities,
Maintenance and Constructiorr, and New Supplier/Vendor Relationships with
Manufacturers
If the project was to be constructed at the stated capacities given in this report within two and ahalf
yeats of the date of this report, the economic impact as measured by household earnings, demand
for business services, utilities, maintenance and repait, and new supplier and vendot relationships is
summadzed rn the chart below.
Category Ptoject Total
Household income from:
Construction $9,693,000
as the basis for a regqonal center's job creation analysis in keeping with 8 CFR 20+.0(m)(3)(t). It is understood that
USCIS may not accept statewide data or data from a broader area outside a regional center as suitable for the iob
creation analysis when regional data is readily available that focuses solely on an RC's geographic area. However, if the
prospective impacts of the capital investment project provided in the project's business plan and associated economic
analysis indicate that a broader geographic area should be considered, USCIS will do so. (See, USCIS "EB-5 Immigrant
Investor Program Stakeholder Meeting, October 14,2070" slides (?DF version of document downloaded November 19,
201 0).
7
I
Jefferson Co., Clallam Co., and Kitsap Co
Rest of$Tashington
All Other
Total
9,426
244
50
9,720
96.980k
2.51o/o
0.510k
100.00%
August 9,2013
Commuting to Tefferson County
Area Employment Share
Measutes of Economic Impact for the Proiect
Total the above category $9,693,000
Demand (output) for:
Professional and business support services $1,723,000
Utdrties
Maintenance and repair construction $19,186,000
Suppliet/vendot links with manufacturers $1,506,000
Total these 4 categories $22.562,000
Household Earnings (Labot Income)
The jobs created by the various components of the regional center will subsequently create new
sources of household rncome. The total household income from the project will be $9.69 million.
This income calculation comes from the RIMS II input-output model, which measutes the avetage
income per job by industry. The model calculations are based on the types of jobs that will be
created within the regional center, with indirect impacts allocated based on the types of commodity
rnputs 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 Manufacturers
The total economic impact of the regional center from the supplier purchases and business
relationships fot the regional center will create approximately $22.56 mrllion in addiuonal economic
activity across the regron. These supplier purchases are calculated from the indirect inctease in
output generated by the RIMS II model. It should be noted that some of these supplier industries
might potentially locate within the regional center, and their economic output is included in this
total.
The estimate of supplier purchases is based on the commodity data in the RIMS II input-output
model. This data specifies the amount and type of commodity input needed to maintain specifrc
types of business operations. The model estimates the supplier 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 tegional center will create demand fot business services includrng, professional services, and
business services and support services. The impact of this activity totals about $1.72 million
annually.
8
August 9,2013
$147,000
Unlities rnclude seryices such as electncity, natural gas, and water and sewet facilities. The economic
impact on utrlity seryices totals about $0.15 million.
Maintenance and repair seryices include some burldrng 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 buitding
construction ot integrated into tepair 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 manufactuted goods plus purchased
materials for construction, plus any locally produced materials used in food services.
1-5 Discussion of Unemployment
The following graph summarizes a comparison of the Regional and National unemployment levels
for 201,2 through June 201,3. Using a weighted a.vet^ge of the non-seasonally adjusted
unemployment rate we find that the overall project region remains above the US as a whole. The
June 2013 US unemployment rate ended at7.60/o, whereas the region ended at8.5o/o. For a more
detailed look at the unemployment rates within the tegion, see the attached Exhibit 1 -
Unemployment Rates in the Project Region.
9
t2.o%
t0.o%
8.0%
6.0%
4.0%
2.0%
0.0%
"J
-USAoRegion
o"8oof ,s- ""o*.".. "J
I
"\"s,',f
August 9,2013
2. Methods & Assumptions
2-1 Assumptions
For the project, WJ examined the economic effects of site development. \X{ systemattcally reviewed
each set of assumptions used to propedy customize the sector outputs that make up the set
matrices. In the following assumptions, WJ applied specific sector data resulting in a very detailed,
realistic and logical range of likely 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 dollar output generated and
local state and federal tax revenues.
The defrnition of "direct jobs" used in this report should not be confused with the concept of direct
job cteation measutable by Fotms I-9, paytoll records or othet similar documentadon as set forth in
8 C.F.R. S 204.6(r(4)(r(A). That section contemplates jobs created by the actual employees of the
new commetcial enterprise, specifically in the non-regional center context.
When economists use the tefm "direct" jobs in the context of an econometric methodology such as
RIMS II, what is meant are iobs cteated direcdy by revenues (which in the EB-5 Pilot program
results from an immigtant investor's investment). For example, where a regional center-based new
commercial enterprise comprised of immigrant investors renovates a building it purchases, the
employees of the various unaffiliated tenants of that building would be considered "direct" iobs 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(i) (4)(r(A) where the new commercial enterprise is itself the employer that can
ptovide Form I-9 or other similar documentation on its own employees. The tenants' employees are
not "di-rect" employees of the regional center-based new commercial entelprise.
To be cleat, this report does set foth the number of jobs that are likely to be created by the new
commercial enterprises. However, as 8 C.F.R. S 204.6(i) (4X-) clearly states, the proof of job
cteation in the context of tegional centets is not Forms I-9, payroll records or similar
documentation, but rather "reasonable methodologies" such as this report.
2-2 Simulation Inputs
The data used includes an estimated construction timeline provided by PSRC, expected
development costs and a variety of industry information as well as public information from U.S.
Government sources. Additional research and analysis was performed by WJ to substandate data
for teasonableness.
Industry and ptoject related metrics such as output and employment were compared to national and
tegional data soutces.
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 area
specific background and demogtaphic purposes.
10
August 9,2013
Based on the data provided and corroborated, inputs were created for use in the RIMS II system to
model the economic impact of the construction phase of the project. The relevant infotmation 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 consftuction of several buildings and the
development of infrastlucture fot a master planned resort community located in Bdnnon,
Washington within the county of Jefferson. The total investment into the project will be
fi29,035,391and the EB-5 investment is projected to be $8,500,000. The remaining $20,535,391 will
come from developer equity and domestic sources.
Buildins Construction
Construction will last approximately twenty-elght (28) months and the total hard construction costs
of the buildings will be $9,854,600 (tn 2013 dollars). The curtent RIMS II multipliers are from 2010
therefore we must deflate the expenditures to 2010 dollars.
CONSTRUCTION
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
FUNITURE, FIXTURtrS & 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
$7,845,500
$501,500
$753,800
$753,800
$21,200
$22,500
$12,000
$12,000
$67,700
s 105,000
$58,000
$5,000
$5,000
s173,ooo
$106,000
$49 000
August 9,2013
11
I'hasel&2of I tlsc of Funds -llreakout
a
a
a
o
All General & Administration cost for the construction of the buildings are covered in the
Maritime Village
Contingency costs for the Pleasant Harbor Bistro is covered in contingency costs for the
Maritime Village
According to the Tumer 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 2070. Therefore, the
construction costs for this project will need to be further reduced to 2070 dollars.
3 www.turnetconstruction.c om f corterr. ffiles/Costlndex201 3Qrtr2.pdf
August 9,2073
t2
o Reunion House
o Harbor House
TOTAL CONSULTING FEES
s25,300
$25,300
$205,600
TOTAL BUILDING COSTS:$11.280.900
2nd Quarter 2O13
1st Quarter 2O13
4th Quarter 2O12
3rd Quarter 2O12
859
84S
839
832
1.18
1_ls
0.84
0.73
2AL2
2CI11
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001_
2000
830
812
799
832
908
854
793
7L7
655
621
619
613
595
2"L
1.6
-4"0
€-4
6.3
7.7
10"6
s.5
5.4
o.3
1.O
3.CI
4.4
ffurner
To convett this figure to 201,0 dollars we use the 2073 index of 859 and divide it by the 2010 index
of 799. This gives us a fi.gure of 859/799 = 1.08. To convertthe $9,854,600rn2013 dollars to201,0
dollars, the 201,3 expenditure is divided by 1.08, to yield $9,124,630.
Inftastucture Construction
Construction wtll last approximately t'wenty-seven (27) months and the total hard construction costs
of the inftastructure will be $10,756,900 (tn 2013 dollars), The current RIMS II multipliers are from
2010 therefore we must deflate the expenditures to 2010 dollars.
2013 Dollars 2010 Dollars
$9,854,600 fig,124,630
Phase I &2 of Sta e I Use of Funds - Infrastructure Breakout
August 9,2013
13
AYerage lnde$
Building Construction Expenditure 201,3 Dollars vs. 2010 Dollars
CONSTRUCTION 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 l0l
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
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
CONTINGENCY 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
$29,261
$ 16,806
$ 15,255
$211,333
$95,760
$230,526
$369,1 80
$968,121
$325,125
$ 186,735
$169,500
52,348,140
$1,064,000
$2,561,400
$4,102,000
$10,756,900
$ 106,3 l6
$61,062
$55,427
$767,842
$347,928
$837,578
$894,236
TOTAL DESIGN, SURVEY PERMITS &
INSPECTIONS
$92,140
s52,921
$48,036
$665,463
$301,538
$725,90t
$1,073,083
August 9,2013
t4
Amount
TOTAL INFRASTRUCTURE COSTS
$3,070,389
$1
To convert this figure to 2070 dollars we use the 201,3 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 expendirure is divided by 1,08, to yield $9,960,093.
Construction employment was derived through expenditure modeling based upon detailed
construction cost figures supplied by PSRC. Verification at the I-829 state of the EB-5 process
would be teceipts, tax documents, and other expense records.
2-3 zuMS II Final Demand and Employment Multipliers
Shown in the chart below are the actual RIMS II frnal demand and employment multipliers used in
the project for this analysis specific for the counties within the Regional Center.
INOUSTHY
ilultlpltsr
Flnal Dcmand Olrect Eftect
OutpuYU(dollart)Eernlngsz/
(dollsr8)
EmploymentlY
(iobs)
Value-.d.te.Utu
(dollars)
Earnln96/5/
(dollars)
EmploymenUU
(job8)
23tX)0tl Construction 1.59111 0.5080 11.1851 0"8,t98 1.,t7I3 1 6835
Be{XAl Oeffifi : Chlnn, WA; Jefieren, WA; Kibap. W
'xrclr*s GsvemrrH$ enEDises.
1- Eadr el{ry h colum 1 r€presents lhe bhl ddhr ddr0e in ouurt lhat ocrirls ir aI hdusfies ,or dr adiliEmd ddhI ol ou$n ddiwred bftd {temand by lhe indusby BllesporxlrE b tE en$y.
2 Eacfi entry h colxrr 2 represents lhe btal &alar d!ffr0e in eamius d hdr*hdds erndryad by dl iddrbs tor edr Eddlidral &Iar dqrun ddiused b fddanad bythe h{tlstyffiEsporfrrgbt€ effiy.
3- Eafi edry in m}IIm 3 r€presenE the bh! dump h mr6er ol Fbs thd occurs in aI irdu$ies tor each adlima! 1 ralton doBflrs ofi orbut
<ldireted h fiml dertard by the ifirlHry corcspfirdrE to lhe enfry. Eecause }le emplo,yment mullhlbrs are bsEd sr 2010 daE ru srFut
(Hiuered b nnol dcmild srrouH be in 2010 ddbrs.
4. Eadr el*ry in cDhlllrl 4 represerlts lhe bhl ddlal dlart0E in vBhe afied tlHt ocflrrs in a[ ardusties for dr arldilmd dolhl ot ou$d
#ivered b frml danand bythe irdu$y correspqldru to the en$y-
5.
=ach
entry h colurm 5 represents lhe bhl ddhr change in €6mh0E ol houshotss emdoy€d by dl ixkl*rbs lor edt sddtixEl 6[ar of
€snilos pai, dilecfly b lErtselDkb empbyed bytteftsustry conespqlfitr to file eoty-
6-
=ach
edry h mhfin 6 r@resenb lhe el dranop h riln$er d l&s io a[ irdusfries lor €sdr adilf*mal loo h the industry corespflxlru bte eilLy.
HolE.-lilttltDtets are based oE &e Zm BerEftmatt rplttorEil TaHe b ts Nalbn Erd AI0 rE0afilal ffi- fid.lstry Us{A irenlifes lrE
indl$ri$ Erre$0diu b &e €ntrbs,
S.JRCE.-He{io1d hwt{r.Mit Modelilg SysEn (BnfS r), Retimd Flodlrd Otvb-nr\ &rr€ou ol Econorflic Analytis.
2-4 Calculation of Employment Results Using Final Demand Multiplier
Cons truction o f Buildings
Looking at construction Q.{AICS 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
2013 Dollars 2010 Dollars
$10,756,900 $9,960,093
August 9,2013
l5
Inftastructute Construction Expenditure 2013 Dollats vs. 2010 Dollats
of jobs produced based on the expenditures for construction of the development, which is shown in
TableAofthisreport. Thisfigureis$9.125million(in2010dollars). Theteforeifallthejobswete
counted, there would be $9.125 times 11.1851, ot 102.7 jobs. This figute includes direct and indirect
jobs.
The employment multiplier is 1.6895, which means that for every 1 direct job, there are 1.6895 total
jobs. Hence for every 1 direct job, there are 0.6895 indirect jobs. If there are a total of 702.7 jobs if
all categories are counted, then based on this multipliet thete ate 60.4 direct jobs and 41.7 indirect
jobs. This is the figure shown in Table A.
Construction of Infrastructute
Looking at construction QTJAICS code 2377), the frnal demand multiplier is 11.1851 and the
employment multiplier is 1.6895. The final demand multipliet is used to detetmine the total numbet
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, there would be $9.960 times 11.1851, or 111.4 jobs. This figure includes ditect and
indirect jobs.
The employment multipher is 1.6895, which means that for every 1 direct iob, there are 7.6895 total
jobs. Hence for every 1 direct job, there are 0.6895 indirect jobs. If thete are a total of 717.4 jobs if
all categories are counted, then based on this multipliet there are 65.9 direct jobs and 45.5 indirect
jobs. This is the figure shown in Table A.
2-5 Guidelines and Methodology for Construction Employment Creation
USCIS guidelines state that dirsgl construction jobs lasting less than two years should not be
counted for the purpose of determining EB-5 job count. However, the indirect jobs can be
counted. The method used to determine indirect employment creation is capital expenditure to
determine direct and indirect job creation and then to subtract the direct jobs.
The project will include over two years of construction. Therefore, direct construction jobs will be
included in the total census.
Also, the number of construction jobs must be based upon the capital expended on the "hard costs"
of construction. Soft costs, such as development fees and permitung are not included. These jobs
are calculated as indirect effects within the RIMS II model and to use these costs would be double
counting.
For this analysis the developer has provided !7J with final estimates of all expenditues of the
nroiect. Of the S29.035.391 in caoital exnenditure. $20.611.500 will be sDent on hard costs for the
development (all in 2013 dollars).
The economrc impact calculations in this report are based on the RIMS II final demand multipliers.
The numbers in the following tables are calculated by multiplying expenditures or revenue by the
RIMS II multipliers for the region, for example: the hard construction costs by the RIMS II
construction multiphers.
August 9,2073
16
2-6 Economic Impacts of Pleasant Harbor Marina and Golf Resort
Construcuon @uildrngs and Infrastructure)
According to the business plan, the hard construction costs are expected to be $19.085 million (2010
dollars). The construction will take approximately t'wenry-seven (27) months to complete.
The RIMS II final demand multiplier fot construction is 11.1851. \)7hen multiplied by $19.085
million (2010 dollars) that creates 213.5 new jobs.
Table 2-1 and 2-2 show the economic impact of the construction expenditutes fot the 20 maior
industrial classifications in the RIMS II input/output model. Please note that in these and
succeeding tables, ouput and earnings are given in thousands of dollars.
Table 2-1 shows that there will be a total of 273.5 new jobs created from the construction of the
buildings and infrastructure. Total output will dse about fi30.42 million, while total household
earnings would inctease by about $9.69 millton. Table 2-2 shows that output per new worker for the
construction sector would be about $151,000, with average annual earnings of about $51,900. For
all new workers, the coresponding figures are $142,500 and $45,400.
l7
August 9,2013
Industry group
Agdculture, forestry, Frs hing
Mining
Utilities
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Professional, scientific, services
Management of companies
Administtative and waste management
Educational services
Health care and social assistance
Arts, entertainment, and recreation
Accommodation
Food services and drinking places
Othet services
Households
Total
Employment Ouput
208
136
147
19186
1506
292
t977
302
332
485
7620
7426
38
260
88
7202
109
74
443
594
0
Eamings
1,.2
0.9
0.4
727.0
6.6
1.4
23.1,
2.2
1.3
7.9
6.2
8.3
0.2
4.7
1.7
77.7
))
0.8
7.0
4.2
7.7
44
32
3t
6598
294
88
647
97
74
tt3
82
534
15
103
32
531
36
23
736
t70
l3
9,693213.5 30,418
Table 2-1. Increase in Employment, Output, and Earnings for $19.085 million (2010 dollarc)
in Construction Expenditures
Industry group
Agriculnrre, forestry, Frshing
Mining
Utilities
Constnrction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Professional, scientiFrc, services
Management of companies
Administrative and waste management
Educational senrices
Health care and social assistance
Arts, entertainment, and recreation
Accommodation
Food services and drinking places
Other services
Households
Total
Output/Employee
1,76.9
1,46.4
396.9
151.0
227,8
21,4.6
85.3
135.3
259.3
253.7
262.5
172.7
224.7
63,9
52.7
108.0
49.1,
89.2
62.9
1,40.2
0.0
Earnings/Employee
37.3
35.1
82.5
51.9
44.5
64.5
28.0
43.7
58.1
58.9
1,3.3
64.7
89.9
25,4
19.5
47.7
76.4
27.5
1,9.2
40.1
8.0
Employment
t.2
0.9
0.4
127.0
6.6
't.4
23.1
2.2
1,.3
t.9
6.2
8.3
0.2
4.1
1.7
1,1,.1,
2.2
0.8
7.0
4.2
1.7
2t3.5 142.5 45.4
2-7 Yenfrcation of Inputs
Buildins Construction
The costs related to the consffuction of the buildings is suppoted 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 vrith the project appears
to be reasonable. Of the $11,280,900 only $9,854,600 (the total hard construction costs) was used as
input to the economic model. The lettet is shown below.
August 9,2013
18
Table 2-2. Oulput and Eamings Per ffi ffi*for$CI.085
million (2010 dollars) in
Stat'e*mnn Com*truct$on LLF
PS00 S lt*lnfftt $tG 100
$cott*dal*r AT- FStdS
July n$n I0lS
B.E: Cor*nrctior Bid for PIcrs*.Bf llsrbsr ]}t*rlm *ud Rr*ux tLP
Des.r $irr:
$hrc*msn Co**crunim LI"P hlc pmtddodthc sMrndhid/s*udgrt W# for Flenffint
ffiorrhorMsrinn md Rmon LLP fortho fullowi.ngrcope ofumrk:
l. Bi*uotsuiming
e, Rctuxinn HsEfifi
3, Ij[wsgt Vitw Hou*e
4, h{flstttmmVillagr
Thare prqfect* ore parr cf tba Fkamnt [*Ertsr ]lrrinr *nd H.ccoct cffiuuity md em
mnbiraedin Phuc I aad 2 sf tkduvttrWt. Butlgtts andplauhrve beenpovided
for lmurrwlew,
Atthffirgh ttrc p{sna fur Rclmiosr }Iowc, Hcihor Visw Houtl;, m*l frifmidmt Vilhgn me
pmtkdnmy, tfucbudgrtr snsv'rithift rcucnnshl.e fud*urry*.tand*tdn fsr thi* locNrion-
t.$ums,wn calrunrcf,tinfrir lllt& Sh{H ArdIihEtB und EngirtusingSoclnlllurHt h*vt
ocsrfirsd orltr thc p6gt !s$#the coffifiiw the sits a$d ffi{firrffi tu bsdslisloped,
Et$tesm*m C,awnrnstiCIn I.,LP hrr hcen fuoevily imvEhmd crith the dnsigrr oftftir Fqjoct
amd rwvrtrmt rd.uttd drudrfm*al* svm lh* Fust tf 1mre. Our dcxip teua inchdes
GMII &ffilttscu, NP Engtnnwiug (Ehffiis*l), NP FtsahsnicaL **ErStF Sqfrnc*hg
["*okor$ BryincorirE {$trmiwa$, md foskomd Aasd$if,tts (Civil Engiss€ti&g}.
Cur$u{rttwIo&s s'ith ttrcse eut$ies omd $rs um of hi$tnr$c*} dffte fiom stqn[$ail btlitrdtrW *nd
pujscta hnve hnn$ ulilined im $lr fwrmdfun of tht Mgsr* furt&me ptuie*s.
Ststsrftran Gonrtnnctio'nI"LP tras bcw tn operatio* airee 1996 sfldhst oorrryIEtd
amue$oq, soodffituiuffi prolect* ed f,ssisfted livfoog ronurunidff ie Arim{m snd },fufih
Crrolina, Sg+cia}[zing in mu!fi-rtorystest firri?d tluildingp wtthudAround eethq$
gF[qEsf,, $toreurnmr ir rpull &nsnr! inth*Fhmrix mmhl{ m ttrie le*&ris ry-rc*tr
oordom$niur* r$eofll styl* pmBsrtien, frwexulyrmdard:relopm:rnt nn* ssilsfi!,rmion in
the Fhtariilt aree, Tocnnnn @ PEwrtlHdSF ir ttweJtgNt lu$urmltfi-fuily pffqfffi[ $elh#
hi$oryufArizmru wtth t56E ruits ou o 5S mr slte, Tocstss hr* rreoeivd nilrfriqmfl$
tndu*ry awffids and hns bes ,*rmr&d &e #1 Muhi*fffinity mrmnmitr hv Hffiking
Arixmr fw tlupt acvmd per*.
August 9,2013
t9
$tatmm Coostructiw t-il."P fure pr+vtded csnrfiwtio,n bndgets mdplrmr forths
futhwing hrildihgr a* am all lnrtusivcsomplchd paojet pri,e+pcr brdliling:
l, Si#m8$frdin$.".. ...,,.,.$651,0{B
*l Con*m*iqn dumtisn S rmsathn"
2. Rmm$osr l{err:it,",-...
a) tlnn*ru*ion duratiwr 12 rnnndlnn
,$&ls,t$0
3- Hsn'borY$aw fiIsura ........$8lS,lSS
$ Courffircniaudundsu l2ilm.&s.
.0. tu{rritfnns Vil.l*Ss"".".. ",.,.."......"$80$-$2,t0CI*) Cqrutrttuisn$rnudsr: N5 rmrrthc.
All oorMrucdmsmd rldcs *n* {$cpcndsdl $Irod! *ssffifl lo EE*S fhil&" tr{rnpw*r, thu
&lr**bn oft$e varisus ctrrstruetisn schrdulerwltl mmcir* sarstlnl
Tlhsn* p* &r1um i*wmr itt drts Ende*vwl
Ilo*pelhmt
Csnstmefisn Mmager
$tgtermsn Ce,nmnrgliorn LLF
Infras tructure Construction
The costs related to the infrastructure construction is supported by the 3'd party confidence letter by
Craig A. Peck & Associates dated August 10, 2013. The letter states that the total construction costs
of $77,754,492 and the timeline associated with the project appears to be reasonable. Of the
$77,754,492 only $10,756,900 (the total hard construction costs) was used as input to the economic
model. The letter is shown below.
20
August 9,2013
Graig A"
PeGk &
Associats
RE:
I 1402 4oh Avenue E.
Taooma, Washington 9M46
tedrnicat assistance
253{,10-5482
259200-4523 FAX
DeckEssoc@comcastxet
August t0,2013
Paul Hospelhorn, Constructioo lv{aaager
Statesman Group
Phocdx. AZ
BY ElvtAIL: paul@statesmanusa-com
plpliminrry Estimlte of Cmstructioo Coct
Pleasant llarbor Marir]a and Golf Resct
Stage I, Pbases I aad 2
Brioo. Washiagfm
Dear Mr. Hospelhco:
The accompanyiag Prelimi.ary Estimate of Construction Cost was cmprled &o,mpre-&sip
eagiseeriog plmq for U-S- Highway 101 md pre-&sigc. gradiag plaos for Plcasanl }hrbm
Mariu ".d Golf Resort in Jefferson Cormty aear Brimoo, Washingroo- Qraatities of
constructim itcnrs were estimatcd fromthose plans or were &l'eloped coactptually fr storm
&ainage it€os atrd taadscaping Unit coss werc takeo from recent mrmicipal and private
constructim estisathg documeots fm Western Washingl@ Stat€. Design arrd coatingeocy
pcrcentages wcre ap,plied to rcflect t[c prcdcsign status of thc project,
Esperieuce of Craig A. Pec\ P.E.
Civil Enginecr - Project }lanagrr
Bachelr of Scie,ace - Civil Eoghcering -Univcrsity of Washiagloo, 1968
Registered kofessimal Engineer - Washingloa, Oregoa, rad Cslifomia
Craig Peck has nore tian 45 yeus of cxpedeuce in Civil Fnginacring &sign and project
s+nagen€rt. The cperie*ce of Mr. Peck iocludes plaodrg, rcseach, analysis, projoct team
building" graatwriting, agcacy coordinatioar, in&astucture design, adoinistratioq and
"*s6rrg1i6q
maorgemerlt- Projects have ir:cluded stortnwatcf, nuroffanalysis, collectim system.
&sign, treatmeflt, storage, and dischage; saaitary sewer facilities plaming/feasibility strdies,
August 9,2013
2t
coll,ectioa systeo design= pury statioas, teatueat plaats, and discbargcs; water supply, storag€,
and distributiorq roadway dcsigs: rcsidestial dcvelo,pmeots includhg si.gle fasity asd
multifamily projects; golf courses, comerciaUretail ccarcr dcvelopmeirts, asd marira
pcrmittiag aod drvelopmcat. ltlr. Peck assists his clieots with t}€ selectioa of appropriate team
mcabers to successidly co,qrletc ttcir pr<f ecrs.
kojects that illustnt€ thc koad raage of cxperience fucludc the followirg:
South llill ltllage - Retail Certer, Puyallup, l\'ashington
16r', ps,c! mrnrgcd all aspects of eogiloering dcsi$ md construcdoa coordinatioa for the
35 acre retail cmter io Fuyallup's South Hill. The projecr involved significant gradhg
quaatities, watcr mairr extersioars, sanitary sews grteasiofl, storage md infrltmtior of all
storm drainage runofl rsw City straets, adwrdcning of SR 16l. Coordinatiouwith
Wastringbn State Deparment of Trcnsportatioar was required for right of way lease ard
imtrrovemots. Duriog a secocd coastnrction phase, permitting for the filling of a 2-aae
wetland including the purchase aad eohmcemeat of m offsite wedand/habitst Foperty
was required.
Kitsap l{aII - Retail Center, Silrerrlale, lVasLington
Mr. Peck served as Project Mamgcr for all sitc grading and utilities &sigu for the Kitsap
Mall ia Silvcrdale, Washirgtoo- As pad of this project bc also maaagcd thc adjaccnt
recorsEuctioo aad realignmeot of Clear Cree.k Road design from its two lase
coofiguration to a five lane rterial as a Couaty Road Ioproveoeat Diskict. Area widc
draimge system revisions were required to accoarmodate sigFificaat inseases is
impenious surfaces-
Iletropolitan Park District of Tacoma, Tacoma, lVashington
Mr- Pcck was p,rojoct managcr and priacipal designer for the rygra& of cxistiag partiag,
roads, arrd water distributioa systm and the creatioo ofnew roads aad parting trots for
the zoo and ferry terminal for Point Defiaace Park io Tacma.
Indian Surnmer Golf ald Country Club, Ollrnpia, Washington
ldr. Peck uras the koject Maaager and Princrpal Engircer for the planning aad Frmittiag
of the golf coursc a*d resideatial development He prricipated in the dcsign of tbe golf
coursc with the golf corrse achitect and designed thc draiaagc &om the course. Hc was
responsible for dcsiga of grad.ing roads, drainage, water, arrd sanitry scwer fo,r the
housing dsuelopmnrnt phases as well as the club house- Design imluded irrig*tion system
source well asd water fcahrre pouds. Area wide sadtary scwer improvemE[ts as a8
cxpansio,n of the City of Olyrryia systco were also coordiaatcd ard dcsigncd
Coordiaation of projec* desigtrs with er,oh"ing Coudy road widetring and &ainage
designs were required.
Canterryood Golf aud Countr.v CIub, Gig Harbor, Washiugton
Mr. Peck was retaiaed to design &aimge ald ponds and assist the golf course architect
rvith grading and coordination wrth the golfcourse cotstnrction contractu for the
August 9,2013
22
Caatcrwood golf coursc, He participated in the siri.g of tbe clubhousc aad parting arcas
ard dssiElred thc saaimy sewer systcn$ for the dubhouse md scwral of fts fiousing
&velopoeat phascs,
Tapps Island, Washingtor
koject Manager/F-ngiaes, Tapps Islaad Associatio,n Engincer for more thm [J yss5,
respomible for road roconstructioa aad widening, storm &ainage system reconstuctioa
iacludiag golf course &ainage ".d cart patt cmstruction, ald rvater syst€rr
improvemats inctudiug aew primary well iustallatioo for over 500 consoctioas.
Citl,of Gig Harbor, Washington
Mr- Peck was Proje,ct Eegineer/Coostnrctim Administrator forUtility Local
Improvement DisFict 3" reryoosible for desip md constnrstioo of saaitary sewer
collection system to ser-ve the Purdy arca. The City of Gig Harbor retained the scrvices
of Mr. Peck md tbe serviccs of Sits mdHiU Fngirsers Inc to assist with the desigu of
&e sewer systm iryrovemer*s Tha project irrcludcd coordirmtioa with Washiagto,n
Starc Deparmeat of Tiarrsportatim f,or use of Higtway 16 rights of way md Pierce
County for use of tLeir rights of wry. Desigu includcd pump stations, force lnaiss, aad
gr8vlty sewers-
Citl of Universitl' Place,'lffa shington
Uk. Peck nras retaired by lLe City of University Place, Washington as ttc sole authr to
prElrarc thc Feasibility Stdy for Satritily Sewer C-ollection Systca Expansioa to dtud
sanitary sewer collectioa service throughout tie newly forucd City of Uaiversity Place-
This study analyzed &e oct&od fo providing service, illustrated tbe proposed systm,
and estimatcd the costs fr,r qrstem develo,p,oeat The stdy was a coopcrativc effut with
Pierce Couaty Rrbtic Wuts-
Elements of the Estimate
U-S. Highway l0l- $552,843 9 llonths llard Coustruction Durafion
The forecast increase in raffc geacrated by Plcasart Harbor Marioa aad Golf Rcsort required
im{.rol'eocats to the intcrsectio,n of U.S- Highway l0l and Black Point Road to maintrin an
acceptable level of service aad traffic safety, Bott roads wrll be qridcocd to increase laac wi&hs
and to creatc hrniry; deceleration, and *ccelerrtioo lanes. Black Point Road witrl be reloc*ted to
form a niaety degree futersectioa from ib crurent 75 degrees wi& U.S. Highwav 101 to improve
iatersection sigtr srfcty and h:rniflg floverrErrls.
The strrfrce of the existiag paverueat will be grouud doura to allow the additioe of a 2-inc,h
thickness of new a.sphalt pavescnt- Thc roadruay will be re-channelized r*'ith pavement mlrkisg
to delincatc the ncw traffc p#ttems.
Black Poiut Road- $317,524 8 ilIonths Hard Construrtiou Duration
Black Poiat Road will be skaigltened to improve the iotersection aligrmeat with U.S- llighway
l0l. Ttis rocoofgrxatioa will require dedicatim of new right of way to Jeffcrson Couaty,
comptrete removal of the existiag roadway, "*d road srr-face widraing. Cmcretc curb and guttcr
are proposcd to pruvidc a morc formal appsaraoce- An access &il'e to the Maritimc area aad an
August 9,2013
23
accrss dria'e to a oew parking area and btrs stop fm Je.ffersoo Transit and Mascn Transit will be
cstablisbed rr"iti a new four-way iatersectioo. Tle dril-e to the parking area and bus stop will
also provide f,ccess to a gated secondary acccss to the GolfResoa area primarity for scrrrice
vehicles, pedestrians, aad reso,rt shutttes. Thc palcmmt sectiur will be thicteacd to
accommodate higbervohlnes of kafrc. Rrmoff&om the aew pa.ved areas will be collected and
trcatcd to iaprove watcr quality piu to discharge-
\lhshiagton Ilepartment o{ FisL aud lYildlife (ItlDF}l) Boat Launch Access Road-
S288,2I8 6 l\'Iontbs Hard Construction Duratior
The curreat boat lauach access road intersects with Black Poist Rood at e[ acute aagle aad at the
ead of a curve resulri.g il a very poor sighil distmcc co,ndilioo- Wie fojccted increase in
vehicle traffic this intcrsection would presat an unsafe coardition- The cxisting localioo would
form a five.rr.ay ingrsecton that is rot aa acceptable ergheering Facticc. Aa altemative
locatioo fort.he boat lauach access road iatersectioc is remotc from the proposednew
intersectioa aad provides fo,r a much improved eotrarce to Black Point Road- Thc intcrsectioo
with Black Point road would provrdc fs a Oater rea for vehicles to stop before eotcring the
roadway. The proposcd access road routc follows *n old loggiog road but rr.ill require signitrcaat
quantitics of trre clearing and gradiag. Thc new accecs road would bc paved to a widcr width
thao the exi*ting road to providc for improved clearmrce between vehiclcs with trailers. Rlmotr
&om tbc rew acccss road will bc colleaed and treatcd to iryrove water quallity pn6 to
discharge.
Maritime lillage- $3,992,711 28 Months Hard Constrrction Duretion
ThE Maritinc Village is situatrd ia a slqiag terr'*ia requiring re-cootourhg of lhe site to
accomn:odate &ives, parkil'g aad t"trae buildings. The access drive and shuttle rol$e to tle
mrriru h to be wideaed as required to include iryrovad patiag aod dsive &mting the mariaa
buildings. Paved parking areas md dsives will be laadscaped ia all arcas aad includc curh
grrtter, ed sidswalk at ttre Mririme Buildh& Sidcwalk will conlect with a pedcstrim. crossing
of BlacL Point Road aod the bus stop aad adjacmt pa*fug area to the south- The bus stop aod
parking area will be paved with asphalt and ladscaped- A coveted area will be providcd for
transit patrons at the bus waiting trea.
lTater asd Sewcr i\'Iajor Facilities (PLase l}.
-l{ater 51,809,225 I ${onths Ilard Constructiou I}uration
A water storage facility will be cosstructsd to $efic ite eotire rcsort md marina area. The site
constnrcted co,ncrete tank rvill be a buried on a hig!poir* of the golf c.ourse aear the southeast
corner of tte sitc. The taok will coataio 310,000 galloas of well water. Thc existing well <rsthe
resrt site is to be rebatilitated ard aa additional well is to 6c &illed arrd put into service for tte
rcsort wat€r sr{rply. The initial constrrrctioa will indudc Eaosmissioo pipiqg froo the wells to
tte storagq disrributioar piping" acd prcssure cootrol equipmcnt to establish watef, pressrrre zones
as aceded rrithia the service area.
-Serr-er 310,793,904 l7 I'foutbs Itrard Construction Duratioo
The w*ste water reclamatioo plant is designed to be e.fficierrtly eryanded as the resort Stages and
Phasas progress. It coasists of a scries of coscrete tanks; coocrete buildirg for laboratory, office,
and coatrols; pumps, blowers, md piping- Paved drives aod parkiag provide access to the
August 9,2073
24
equipment withir the plant arce. The first of thc tluec phases of treatment pl*nt consttction is
included in this estimatc. The trcatnrent plart will pmduce Cless A effIuent that is allowe.d to he
uscd for irrigation and firc supprcssion. Trcatcd rcclaimcd watcr along with collectcd site
storinwater runoffis to b€ stored in rhe 120 millian gallon capacity, l2 acre surface arca" and
synthetically lined "Kettlc B" storage pond that is includod in tNs estirnate of oonsuuction costs.
Ifl can provide you with additional information concerning tlrc project in general or the
prcliminary estinuE of construction cost, please contact me.
Very truly yours,
t*qX\aau'
Cr*ig A. Pectq'F.E.
August 9,2013
25
3. About RIMS II Final Demand Methodology
The following material has been condensed ftom the RIMS II User Handbook
Inttoduction and General Comments
Effective planning for public- and private-sector projects and ptogtams at the State and local levels
requires a systematic analysis of the economic impacts of these ptojects and programs on affected
regions. In turn, systematic analysis of economic impacts must account for the inter-industry
relationships within regions because these telationships latgely determine how tegional economies
are likely to respond to project and program changes. Thus, regional input-output (I-O) multipliers,
wluch account for inter-industry relationships within regions, are useful tools for conducting
tegional economic impact analysis.
In the 1970s, the Bureau of Economic Analysis (BEA) developed a method for estimating regional
I-O multipliers known as RIMS fi.egional Industrial Multiplier System), which was based on the
work of Garnick and Drake. In the 1980s, BEA completed an enhancement of RIMS, known as
RIMS II (R.egional Input-Output Modeling System), and published a handbook for RIMS II users.
In 1992, BEA published a second edition of the handbook in which the multipliets were based on
more recent data and improved methodology. ln 7997, 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 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 rnputs 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 regional economic accounts, which ate
used to adjust the national I-O table to show a region's industrial strucrure and trading patterns.
Using RIMS II for impact analysis has several advantages. RIMS II multipliers 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 accessibility of the main data sources fot 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 similat in magrutude.
BEA's RIMS multipliets can be a cost-effective way fot 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 approxrmate order-of-magnitude estimates of impacts, RIMS
mulupliers are best suited for estimating the impacts of small changes on a regional economy. For
some appiicad.ons, users may want to supplement RIMS estimates with infotmation they gather
from the region undergoing the potential change. To use the multipliers for impact analysis
effectively, usets must provide geogtaphically and industrially detailed information on the initial
changes in output, earnings, or employment that are associated with the project or progfam undet
study. The mulupliers 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, for example, the
Department of Defense uses RIMS II to estimate the regional impacts of military base closings.
State transportation departments use RIMS II to estimate the regional impacts of airpot
construction and expansion. In the private-sectot, 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 fot the nation. Since a particular 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 thzt are not produced in a study region are
idennfied 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 fust step, the producer portion of the national I-O table is made region-specific by using six-
rligit NAICS location quotients Gar. The LQs estimate the extent to which input requirements are
supplied by firms within the tegion. RIMS II uses LQs based on two types of data: BEA's personal
income data @y place of residence) ate used to calculate LQs in the service industries; and BEA's
wage-and-salary data (by place of work) are used to calculate LQs in the non-sewice 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 ate dedved 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, ate 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 inversion approach
produces ouput, earnings, and employment multipliers, which can be used to trace the impacts of
changes in final demand on and indirectly affected industdes.
Accutacy of RIMS II
Empirical evidence suggests that RIMS II commonly yields multipliers that arc not substantially
different rn magnitude ftom those generated by regional I-O models based on relatively expensive
surveys. For example, a comparison of 224 ndustry-specific multipliers from survey-based tables for
lfashington, $Tashington, and West Virginia indicates that the RIMS II average multipliers
overestjmate the average multipliers from the survey-based tables by approximately 5 percent. For
the majoriry of individual indusry-specific multipliers within these states, the diffetence between
RIMS II and survey-based multipliets is less than 10 percent. In addrtion, RIMS II and survey
multipliers show statistjcally similar distributions of affected industries.
Advantages of RIMS II
There are numerous advantages to using RIMS II. First, 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 aggregation errors, which often
occur when indusfties are combined. Thud, RIMS II multipliers can be compared across areas
August 9,2013
27
because they are based on a consistent set of esumating procedures nationwide. Fourth, RIMS II
multrpliers are updated to reflect the most recent local-arca wage-and-salary and personal income
data.
Overview of Diffetent Multipliets
RIMS II provides users with five types of multipliers: final demand multipliers fot output, fot
earnings, and for employment; and direct-effect mulupliers fot eatnings and fot employment. These
muluphers measure the economic impact of a change in final demand, in earnings, or in employment
on a tegion's economy.
The final demand multipliers for output are the basic multipLiers from which all other RIMS II
multipliers are denved. In this table, each column entry rndicates the change in output in each tow
industry that results from a $1 change in final demand in the column industry, The rmpact on each
row industry is calculated by multiplying the final demand change in the column industry by the
multiplier for each row. The total rmpact on tegional output is calculated by multiplying the final
demand change rn the column industry by the sum of all the multipliers for each row except the
household tow.
RIMS II provides two ty?es 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 multipliets.
The final demand multipliers for earnings can be used if data on final demand changes are ava:lable.
In the final demand eamrngs multiplier table, each column entry indicates the change in eamings 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 muluplying 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 industry 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 multipliers and direct effect multipliets. These multipliers are derived from the table
of final demand ouput multipliers.
The frnal 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
rn employment rn each row rndustry that results ftom a $1 million change in final demand rn the
column rndustry. The rmpact on each row rndustry is calculated by multiplytng the final demand
change in the column industry by the multiplier for each tow. The total impact on regional
employment is calculated by multiplyrrg the final demand change in the column rndustry by the sum
of the multipliers fot each tow.
The direct effect multipliers for employment can be used if the data on the irutial changes in
employment by industry are available. In the direct effect employment muluplier table, each entry
indicates the total change in employment in the region that results from a change of one job in the
August 9,2013
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row industry. The total impact on tegional employment is calculated by muluplying the initial
change rn 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 availabiliry of estimates of the initial changes in final demand, earnings, and
employment. If the estimates of the initial changes in all three measures are ava:lable, 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 hmited to rnitial changes in final demand, the user can select
a ftnal demand multiplier for impact estimation. If the available estimates are limited to initial
changes in earnings or employment, the user can select a direct effect multiplier.
The EB-5 regulations provide that "jobs created indi.ecdy" by a tegional center- affiliated business
may be credited to foreign investors who made a qualilring investment in the business. To show
this job creation, "reasonable" methodologies may be used. 8 CFRS204.6(rn)(7). The RIMS II
input/output model has been recognized by the USCIS as an acceptable methodology for showing
job cteation resulting from a tegional center- affi.liated investment ptoject.
August 9,2013
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EXHIBIT 1 - Unemployment rates in the Project Region
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 ifl 201,2 was 4,286, with an unemployment rate of 8.9 percent.
This number has dtopped to 8.5 percent as ofJune 2013.
Center
effetson WA
2012 Ja.54,376 49,556 4,820 10.1
2012 Feb 54,465 49,474 4,991 10.3
20L2 Mar 54,236 49,419 4,817 9.9
2012 Apt 53,626 49,369 4,256 8.9
4,3772012Mry53,891 49,514 9.0
2012 Jr.53,807 49,523 4,285 8.1
2012 J,rl 52,757 48,561 4,191 8.6
2012 Arg 53,069 48,832 4,237 8.7
2072 s"p 52,955 49,147 3,808 7.9
20L2 Oct 53,108 49,388 3,720 1.7
2072 Nov 53,150 49,325 3,825 8.1
49,348 4,109 8.72012Dec53,457
2012 Annual 53,575 49,288 4,286 8.9
2013 Ja.52,647 48,744 4,503 9.8
10.02013Feb52,618 47,981 4,637
207i Mar 53,127 48,768 4,359 9.2
2013 Apt 52,266 48,469 3,197 8.2
3,904 d.J2013Muy52,1.51 48,247
207i Jrt 52,026 47,950 4,076 8.5
2012 J"t 12,155 10,829 1,326 10.9
2012 Feb 12,135 10,794 1,341 11.1
2012 Mar 12,097 70,827 7,270 10.5
2012 72,024 10,892 1,132 9.4Ap.
2012 M"y 12,1.58 11,008 1,150 9.5
2012 J.rt 72,356 11,226 1,130 9.7
August 9,2013
30
Year Period Labor
Force Employment Unemployment Unemployment
Rate 7o
Year Petiod Labor
Force Employment Unemployment Unemployment
Rate %o
2012 J"l
Clallam srA
ICtsap County, WA
12,022 10,972 1,050 8.7
20t2 Ar'rg 12,055 10,956 1,099 9.1
2012 S.p 12,028 11,029 999 8.3
2012 Oct 1 1,869 10,894 975 8.2
2012 Nov 11,793 10,769 1,024 8.7
2012 Dec 11,804 10,689 1,115 9.4
2072 Annual 72,041 10,907 1,134 9.4
Jun 11,730 10,478 7,252 10.7
2013 Feb 11,713 10,434 1,279 10.9
2013 Mar 1 1,833 10,654 7,179 10.0
2013 11,637Ap.10,615 1,022 8.8
2013 Muy 11,794 10,760 1,034 8.8
2013 Jr.77,829 70,794 1,035 8.7
2012 Ju.28,827 25,549 3,278 11.4
20t2 28,808 25,501 3,307 1 1.5Feb
2012 Mat 28,771 25,565 3,206 11.1
2012 Ap.28,448 25,666 2,782 9.8
2,856 10.02012Muy28,688 25,832
2012 Jr.28,915 26,145 2,770 9.6
2012 Jrl 28,515 25,794 2,721 9.5
2012 Arg 28,643 25,926 2,717 9.5
2012 s.p 28,469 26,039 2,430 8.5
2012 Oct 28,457 26,044 2,413 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
207i J.t 28,009 24,975 3,034 10.8
2013 Feb 27,875 24,813 3,062 11.0
2013 Mar 28,1.70 25,329 2,847 10.1
2013 Ap.28,046 25,51.1 2,535 9.0
2013 M.y 27,478 24,957 2,521 9.2
2013 J.r.)'7 4)t 24,782 2,640 9.6
August 9,2073
31
2073
Year Period Labot
Force Employment Unemployment Unemployment
Rate 7o
2072 Ju.122,145 112,290 9,855 8.1
20L2 Feb 122,452 112,127 10,325 8.4
201'2 Mar 721,841 1 1 1,865 9,976 8.2
2012 Ap.120,405 1 1 1,550 8,855 1.4
2012 Mry 120,827 111,702 9,125 7.6
20t2 Jrt 120,151 717,197 8,954 7.5
2012 Jrl 717,735 108,934 8,801 7.5
2012 Arg 1 18,509 109,615 8,894 7.5
2012 S"p 1 18,369 110,373 7,996 6.8
2012 Oct 118,999 111,226 1,773 6.5
2012 Nov 119,378 111,492 7,886 6.6
2012 Dec 120,098 1 1 1,655 8,443 7.0
2012 Annual 120,076 111,169 8,907 7.4
2013 J..118,202 108,978 9,224 7.8
2013 Feb 118,266 108,696 9,570 8.1
Mar 119,378 110,320 9,058 7.6
2013 Apt 117,115 109,281 7,834 6.7
2013 Muy 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 7o
2013