HomeMy WebLinkAbout078Pleasant Harbor
Economic Analysis
Final Report
By Wright Johnson, LLC oa/201s
\vRTGHT JOHNSON
professional authors and analysts
An Economic Analysis
Of the Pleasant Harbor Marina and Golf Resort Project
Final Report
Prepared for
Pleasant Harbor Marina and Golf Resort, LLP
By
\X/rightJohnson, LLC
August 2015
205 Worth Avenue, Suite 201, Palm Beach, FL 33480
Telephone: (561) 282-6099
Email info@u'rightiohrsonllc. com
I
August 18,2015
1. Executive Summary
This economic analysis repotr, utilizing RIMS II, was prepared to evaluate the economic
impacts of a specific project located within the State of Washington, which is being
developed undet the sponsorship of the USClS-approved Puget Sound Regionai Center
('?RC"). The project involves the construction, renovation and operation of a 256-acre
master-planned resort community located in Brinnon, Washington. This project's
activities will be collectively teferred to as the "Pleasant Hatbor Marlna and Golf Resort
Proiect".
The Pleasant Harbor Marina and Golf Resort Project will tesult in the creadon of 389.4
new jobs from the construction, renovadon and opetation of the project.
The Pleasant Hatbor Marina and Golf Resort Project will increase investment in the
tegion by a one-time amount of $5318121652. This impact analysis finds that the project
will generate significant and positive economic benefits fot the regional economy.
The Pleasant Harbor Marina and Golf Resott Ptoject would result in annual gtowth in
the tegional economy of the tegion by a gam of $16,832,000 in regional household
eamings.
a
a
a
a
a
o
a
a
The tegional economy will experience increased need for business seryices of $219301000
annually.
The regional economy will experience annual increased demand on utilities of $2821000.
The regional economy will experience annual incteased demand for maintenance and
construcd.ofl on afl annual basis of $301880.000.
The tegional economy will experience incteased demand on new supplier and vendor
links with manufacturers of $2.485.000.
Based on the combined total financing for the project of $53,812,652---whtch will
include up to $10.0 million in EB-5 capttal from 20 EB-5 Investors will be raised---the
individual EB-5 investors in the Pleasant Hatbor Marina and Golf Resort Project can be
credited with the creation of 19.5 iobs each. The construction and opetad.on of the
project ptovides enough jobs to meet or exceed the requirements of the EB-5 program.
The following chart summaizes the annual reveflues and the total permanent new jobs
fot construction and operation of the Pleasant Harbor Madna and Golf Resort Project.
These figues assume that the expenditures/tevenues for the ptoject given in the table
are met.
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August 18,2015
a
o
Proiect (with
,VA/CS Code)
Proiected
Expenditure/Revenue
(in 2010 dollars)
($ millions)
RIMS II
Final
Demand
Multiplier
RIMS il
Direct Job
Multiplier
Total
Number
of New
Direct
Jobs
Created
Total
Number
of New
lndirect
Jobs
Created
Total
Number of
New
Permanent
Jobs
Created
203.2
Construction
(NAICS 236 and
237).
$30.689 1 1 .1851 N/A 140.1 343.3
Fumiture,
Fixtures, and
Equipment
Purchases
(NATCS 4232,
4234,and 4236)
$0.551 3.1541 N/A 1.7 1.7*
Traveler
Accommodations
(NATCS 7211)
$1.924 14.7822 N/A 21.4 7.0 28.4
1.2309 13.0 3.0
Restaurants and
Other Eating
Places (NAICS
72s5)
N/A N/A 16.0
389.4Grand Total:
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August 18,2015
Table A. Summary of Employment Projection for the Pleasant Harbor Marina and Golf Resort
TABLE OF CONTENTS
1. Executive Summary
1-1 Intoducdon.......
1-2 Industry Cluster Definitions
1-3 Discussion of County Grouping Selected based on Commuter Data
1-4 Effect of Household Earnings, Demand fot Business Services, Utilities, Maintenance and
Construction, and New Supplier/Vendor Relationships with Manufactuters........... ... ......... 'l 0
2. Methods &Assumptions............ ......12
2-1 Assumptions
2-2 Simulation Inputs.......12
2-3 RIMS II Final Demand and Employment Multipliers .18
2-4 Calcutation of Employment Results Using Final Demand Multiplier......... ........... I 8
2-5 Guidelines and Methodology for Construction Employment Ctead.on 20
2-6 Economic Impacts of The Pleasant Harbor Marina and Golf Resort Prcject..................20
3. About RIMS II Final Demand Methodo1o9y..............
26
40
2-7 Yeification/Source of Inputs
2
5
6
8
4
August 18,2015
1-1 Introduction
!7dght Johnson, LLC, ('WJ") has been reained by Pleasant Hatbor Madna and Golf Resot, IIP
('PHMGR') to perform an economic assessment of a planned investrnent of the construction and
operation of a specific ptoject located within the State of Washington. The following industry
clusters were ata"lyzed as part of the project:
1. Construction of Buildings - NAICS 236
2. Heavy and Civil Engineering Construction -.NAICS 237
3. Furniture and Home Fumishing Merchant Wholesalets - NAICS 4232
4. Professional and Commetcial Equipment and Supplies Merchant l7holesalets -
NAICS 4234
5. Household Appliances and Electrical and Electrical Goods Merchant
lTholesalers - NAICS 4236
6. Tmveler Accommodations - NAICS 7211
7. Restaurants and Othet Eating Places - NAICS 7255
Puget Sound Regional Center, LLC is an approved EB-5 regional center with a geographic arcz
encompassing the following three contiguous counties within the State of Washington: Jefferson,
Kitsap and Clallam.
The sphere of influence for the Pleasant Harbor Mzr:r:a and Golf Resort Project ate the same t}ree
coundes in Washington. Based on information provided by PHMGR, WJ performed an analysis fot
the target industry economic cluster in the proposed ptoject specif,c geogtaphic atea. RIMS II was
utilized.
The focus of the study is analyzing the region impacts of the construction, renovadon and opetation
of a 256-acre master-planned resort community located in Brinnon, lWashington within Jeffetson
County.
WJ used RIMS II to model the total economic impact associated with various levels of site
investrnent and opetational employment. To quantitr the net economic impact (direct and indirect)
of the development, RIMS II modeled the following effects:
! .! ! Direct effects of construction employmeflt, household earnings, taxation and output
! { ! Effects of operational employment, household eamings, taxation and output
WJ examined the ptoject provided by PHMGR using a multi-industry sector, segregated-region
model. Using this model, VJ was able to develop independent forecasts for the proposed use of the
project. This segregation of forecasts allowed lfJ/zulfS II to capture the total net effects of the
proposed target industry. By analyztng the regional developments with different underlying
assumptions for the specific industries, WJ established a realistic prediction of a potential outcome.
The RIMS II economic model employed for the economic and job cteadon impact assessment
study, fotecasts the economic impact a specific event wi-ll generate tlrroughout a determined area -
the three counties within lTashington. Over time, competitive pressutes emerge and then tend to
revert back to equilibdum. 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
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August 18,2015
through the regional 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
equilibrium. In the long run, the project will materially alter the tegional geogtaphic are by the
substantial amount of new investment and related business development activities, including a
cortesponding higher level of ouq)ut, taxation, investment, employment and household eamings in
the regional ecoflomy. This report is intended to demonsttate the incteased economic impacts
within the region.
The proposed Pleasant Harbot Marina and Golf Resort Project will tequire a total expenditue of
$5318121652 to provide for development of the project. $10,000,000 of the total investment will be
through EB-5 investor funds.
1-2 Industry Cluster Definitionsl
Construction of Buildings - NAICS code 236: This industry comprises establishments primarily
responsible for the construcdon (including new work, additions, altetadons, mai.ntenance, and
repafus) of industriat buildings (except warehouses). The construcdon of selected additional
structutes, whose ptoduction processes are similar to those for industrial buildings (e.g., incinerators,
cement plants, blast furnaces, and similar non-building structures), is included in this industry.
Included in this industry ate industrial building general contractors, industdal building operative
buildets, industrial building design-buitd fi.rms, and industrial building construcdon management
firms; establishments primarily responsible for the construction (including new work, additions,
altetad.ons, maintenance, and repairs) of industrial buildings (except watehouses). Th" construcdon
of selected additional stfuctrres, whose production processes are similar to those for industrial
buildings (e.g., incinerators, cement plants, blast furnaces, and similar non-building structures), is
included in this industry. Included in this industry are industrial building general contractors,
industrial buitding for-sale buildets, industrial building design-build firms, and industrial building
construcdon management fitms; establishments ptimadly responsible fot the temodeling
construcdon (including additions, alterations, reconstfucdon, maintenance, and repair work) of
houses and othet residential buildings, single-family, and multifamily. Included in this industry are
temodeling general contractors, for-sale temodelers, temodeling design-build frrms, and remodeling
project construction management frrms; establishments primarily engaged in building new homes on
land that is owned or conuolled by the builder rather than the homebuyer or investor. The land is
included with the sale of the home. Establishments in this industry build single andf or multifamily
homes. These estabtshments are often referred to as merchant builders, but are also known as
ptoduction ot for-sale builders.; establishments primarily responsible for the construction of new
multifamily residential housing units (..g., high-rise, garden, town house apartrnents, and
condominiums where each unit is not separated ftom its neighbors by a gtound-to-roof wall).
Multifamily desrgn-build firms and multifamily housing consttucdon management firms acting as
general contractors are included in this industry and establishments primarily responsibie for the
entire construction of new single-family housing, such as single-family detached houses and town
houses or row houses where each housing unit (1) is separated ftom its neighbors by a gtound-to-
roof wall and Q) has no housing units constructed above or below. This industry includes general
contractors tesponsible for the on-site assembly of modulat and prefabricated houses. Single-family
I NAICS code definitions provided by the U.S. Census Bureau
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August 18,2015
housing design-build firms and single-famiTy construcdon management firms acting as general
contractors are included in this industry.
Heavy and Civil Engineering Construction - NAICS code 237: This industry compdses
establishments primarily engaged in the construcdon of watet and sewer lines, mains, pumping
stations, treatment plants, and storage tanks. The work performed may include new work,
reconstrucdon, rehabilitadon, and repairs. Specialty trade contractors are included in this group if
they are engaged in activities primarily related to water, sewer line, and related structures
construcdon. All stuctures (including buitdings) tfrat are integrai parts of water and sewer networks
(e.g., storage tanks, pumping stations, water treatrnent plants, and sewage treatmerit plants) are
included in this industry; establishments pdmarily engaged in the construcdon of oil and gas lines,
mains, refineries, and stotage tanks. The wotk petformed may include new wotk, reconstruction,
rehabilitation, and repairs. Specialty trade conttactors ate included in this gloup if they are engaged
in activities primarily related to oil and gas pipeline and related structures construction. All structures
(including buildings) that are integal parts of oil and gas networkr (..9., storage tanks, pumping
stadons, and refineries) are included in this industry; establishments primarily engaged in the
construction of power lines and towefs, power plants, and radio, television, and telecommunicadons
ftansmitting/receiving towers. The work performed may include new wotk, reconstruction,
rehabilitation, and tepairs. Specialty trade conffactors ate included in this Soup if they are engaged
in activities primarily related to powff and communication line and telated structures construction.
All structures (including building$ that are integtal parts of power and communicadon networks
(e.g., transmitting towers, substadons, and power plants) are included; establishments primadly
engaged in servicing land and subdividing real property into lots, fot subsequent sale to builders.
Senricing of land may include excavation work for the installation of toads and utiJity lines. The
extent of work m^y van1 ftom project to ptoject. Land subdivision ptecedes building activity and the
subsequent building is often residential, but may also be commercial tracts and industrial patks.
These establishments may do all the work themselves or subcontract the work to othets.
Establishments that perform only the legal subdivision of land ate not included in this industry;
establishments primarily engaged in the construction of highways (including elevated), streets, toads,
airport runways, public sidewalks, ot bddges. The wotk pedormed may include new work,
reconstruction, rehabilitadon, and repairs. Specialty trade conftactors are included in this gtoup if
they are engaged in activities primadly related to highway, street, and bridge construction (e.g.,
installing guardrails on highways) and establishments pdmadly engaged in heavy and engineering
construction projects (excluding highway, street, bridge, and distribution line construcdon). The
wotk performed may include new worh teconstruction, tehabiJitation, and repairs. Specialty ttade
contractors are included in this Soup if &ey are engaged in activities primarily related to engineering
constuction projects (excluding highway, street, bddge, distribution line, oil and gas structure, and
utilities building and structure construcdon). Construction projects involving water resources (e.g.,
dredging and land drainage), development of marine facilities, and projects involving open space
improvement (e.g., parks and trails) are included in this industry.
Furniture and Home Fumishings Merchant Wholesalers - NAICS code 4232: This industry
compdses establishments primarily engaged in the merchant wholesale distribution of furniture
(except hospital beds, medical furniture, and drafting tables). AIso, this industry comprises
establishments primarily engaged in the merchant wholesale distribution of home furnishings ar.df or
housewates.
Professional and Commercial Equipment and Supplies Merchant Wholesalers - NAICS
code 4234: This industry comprises establishments primadly engaged in the merchant wholesale
August 18,2015
7
distribution of commercial and related machines and equipment (except photogaphic equipment
and supplies; office equipment; and computets and computet peripheral equipment and software)
generally used in restaurants and stotes.
Household Appliances and Electrical and Electdcal Goods Metchant Wholesalers - NAICS
code 4236: This industry compdses establishments primarily engaged in the merchant wholesale
distribution of electrical construction matedals; widng supplies; electric light fixtures; light bulbs;
atdf ot electdcal power equipment for the generadon, transmission, distributioll, or control of
electric energy. Also, this industry comprises establishments ptimarily engaged in the merchant
wholesale distribution of household-type gas and electric appliances (except water heaters and
heating stoves (i.e., non-cooking)), room air-conditioners, andf or household-type audio or video
equipment.
Ttaveler Accommodations - NAICS code 72ll: This industry comprises establishments
primarily engaged in providing short-term lodgrng in facilities known as hotels, motor hotels, resort
hotels, and motels. The establishments in this industry may offet food and beverage services,
tecreational services, confetence rooms and convention services, laundry services, parking, and othet
services. This industry comprises establishments pdmarily engaged in ptoviding short-term lodging
in hotel facilities with a casino on the premises. The casino on premises includes table-wagedng
games and may include other gambling activities, such as slot machines and sports betting. These
establishments generally offer a range of services and amenities, such as food and beverage seri.ices,
entettainment, valet parking, swimmiflg pools, and conference and convendon facilities. This US
indusuy compri.ses establishments primarily engaged in providing short-term lodging in facilities
known as bed-and-breakfast inns. These establishments provide short-term lodging in private homes
or small buildings converted for this purpose. Bed-and-bteakfast inns are chzractenzed by a highly
personalized serrice and inclusion of a fi.rll breakfast in the room rate.
Restautants and Other Eating Places - NAICS code 7225: This U.S. industry compdses
establishments primarily engaged in ptoviding food services to patrons who otdet and are served
while seated (i.e., waiterfwataess senice) andpry after eating. These establishments may provide
this type of food service to patrons in combination with selling alcoholic beverages, providing
carryout services, or presenting live nontheatical entettainment; establishments primadly engaged in
providing food services (except snack and nonalcoholic bevetage bats) whete patrons genetally
order ot select items and pay before eating. Food and drink may be consumed on premises, taken
out, or deliveted to the customer's location. Some establishments in this industry may provide these
food services in combination with selling alcoholic bevemges; establishments, known as cafeterias,
gtill buffets, ot buffets, pri-rtily engaged in preparing and serving meals for immediate
consumption using cafeteria-style ot buffet serving equipment, such as steam tables, refrigerated
areas, display gdlls, and self-seryice nonalcoholic beverage dispensing equipment. Patrons select
ftom food and dtink items on display in a continuous cafeteda line or ftom buffet stations; This U.S.
industry comprises establishments primarily engaged ir, (1) preparing andf or. serving a specialty
snack, such as ice cream, ftozen yogurt, cookies, or popcorn or Q) serving nonalcoholic beverages,
such as coffee, juices, or sodas for consumption on or near the premises. These establishments may
carry ar,.d sell a combination of snack, nonalcoholic bevetage, and other related ptoducts (e.g., coffee
beans, mugs, coffee makers) but generally promote and sell a unique snack or nonalcoholic
beverage.
1-3 Discussion of County Grouping Selected based on Commuter Data
August 18,2015
8
Using data on work site and place of residence at the couflty level, we examined each of the counties
included in the project proposal to calculate where the preponderance of wotkets lives in each
coufltf, ranking them by absolute number of commuters to the county. A cutoff threshold was
determined for each ranked Iist of worker-supptytng counties; Iists were truncated at the cumulative
95% level of all commuters. Below a 90o/o level will exclude areas that ate significantly affected by
the proposed ptoject.
Commuting pattems tend to be more spatially coflcentrated than the flow of goods, which have
much wider dispersion into and out of the region. However, a tzdeoff. must be made between
capturing the indirect economic effects of trade and the induced economic effects of incteased
coflsumer spending.
An important distinction must be made between the tegional centet'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 intetdependence of economic activities, investrnents within the
regional center will have impacts beyond-and potentially far beyond-their botders2.
Consideration must be given to the sizing of the study region so that impotant regional effects are
not neglected in the analysis. If a region is sized too small, much of the effect of a project will be
obscured as expenditures ofl goods origrnating outside the region (known as "leakages') diminish
the impacts. Conversely, if a region is sized too large, the economic multipliers might be overstated
and the abiJity to claim final demand will be diminished.
The combined percentage of workers ftom Jefferson County, I(itsap and Clallam County, WA that
conrmute intoJefferson County, WA is 96.980/o where the project will be located.
U.S. Census Bureau, County-to-County Work Flows.
ftttp://www.census.gov/population/www/cen2000/commuting/index.hrnl#WA)
,- USCIS has interpreted that while the regional center's EB-5 capital investment activity may produce a legitimate
economic benefit outside its fonnal jurisdictional regional center boundades, the data set used to estimate job creation
should fit within the intended impact of the capital investment projecl V{here appropriate, regional data should be used
as the basis for a regional center's job creation analysis in keeping with 8 CFR 204.6(m)(3)(i). It is understood that
USCIS may not accept statewide data or data from a broader area outside a regional center as suitable for the job
creation analysis when regional data is readily available that focuses solely on an RC's geogtaphic area. However, if the
prospective impacts of the capital investment proiect provided in the project's business plan and associated economic
analysis indicate that a broader geographic area should be considered, USCIS will do so. (See, USCIS 'EB-5 Immigrant
Investor Program Stakeholder Meeting, October 14,2070" slides (?DF version of document downloaded November 19,
2010).
August 18,2015
9
Area Employment Shate
Jefferson Co., Kitsap Co., and Clallam Co.
Rest of lTashington
All Other
Total
9,426
244
50
9,720
96.98%
2.5loh
0.51%
100.00%
Co-muting to Teffetson County
1-4 Effect of Household Earnings, Demand for Business Services, UtiJities,
Maintenance and Construction, and New Supplier/Vendor Relationships with
Manufacturers
If the proiect was to be operating at the stated capacities given in this repott, the economic impact
as measured by household eamings, demand for business services, udJides, maintenance and repair,
and new supplier and vendor relationships is summaraed tn the chat below.
Household Eamings (Labor Income)
The jobs created by the various compoflents of the regional center will subsequently create new
sources of household income. The total household income ftom the project will be $16.83 million.
This income calculation comes ftom the RIMS II input-output model, which measures the average
income per job by industry. The model calculations are based on the types of iobs that will be
created u/ithin the regional center, with indirect impacts allocated based on the types of commodity
inputs required by the businesses that would potentially locate in the tegional ceflter.
Demand fot Business Services, Utilities, Maintenance and Construction, and New
Supplier/Vendor Relationships Created with Manufacturets
The total economic impact of the regional ceriter from the supplier purchases and business
relationships for the tegional center will create apptoximatety $36.58 million in additional economic
activity across the tegion. These supplier purchases are calculated from the indkect increase in
10
August 18,2015
Project Total
Total the above categories
$2,930,000
Utilities
Maintenance and repair construction
Supplier/vendot links with manufacturers $2,495,000
Total these 4 categoties
Category
$16.832.000
$282,000
$30,880,000
$36.s77.000
Householdincome ftom:
Construction
Fumitue, Fixtures and Equipment Purchases
Hotel Operations
Restaurant Opemtions
$15,597,000
$59,ooo
$823,000
$363,000
Demand (output) for:
Professional and business support services
Summary Measutes of Economic Impact for the Proiect
output generated by the RIMS II model. It should be noted that some of these suppliet industries
might potentially locate within the regional centet, and their economic output is included in this
total.
The estimate of supplier purchases is based on the commodity data rn the RIMS II input-output
model. This data specifies the amount and type of commodity input needed to maintain specific
types of business operations. The model estimates the supplier purchases based on the types of iobs
and number of jobs that wili be created u/ithin the tegional center. In addition, the model allocates
the suppliet purchases to businesses within the tegion, based on trade flow data from the U.S.
Buteau of Economic Analysis.
The regional centet will create demand for business services including, ptofessional services, and
business services and support serrrices. The impact of this activity totals about fi2.93 million
annually.
Utilities include services such as electricity, natural gas, and water and sewer facilities. The economic
impact on utility services totals about $0.28 million.
Maintenance and repair services include some building and construcdon activity on existing
buildings. The tegional center would create an economic impact of about $30.88 million within these
sectors in the region. Because most of the construction activity is either upfront during building
construcdon or integrated into repair and maintenallce services, the economic impact for
construcdon sectofs is minimal on an ongoing basis.
New suppliet/vendor relationships with manufacturers would create an economic impact of about
$2.49 million. These activities include purchases of locally manufactured goods plus purchased
materi.als fot construction, plus any locally produced materials used in food services.
11
August 18,2015
2. Methods & Assumptions
2-1 Assumptions
For the project, WJ examined the economic effects of site development and operations. Wl
systemadcally reviewed each set of assumptions used to properly customize the sector outputs that
make up the set matrices. In the following assumptions, WJ applied specific sector data resultingn
^very detailed, realistic and logical range of likely outcomes.
The tables within this analysis show the expected spending as weII as incteases in employment and
household earnings for ongoing operadons. Additionally they show dollar output generated and
local state and federal tax revenues.
The definition of "direct )obs" through RIMS II used in this report should not be confused with the
concept of "ditect iob" cread.on measurable by Forms I-9, paytoll records or other similat
documentation as set forth in 8 C.F.R. S 204.60X4)(r(A) That section contemplates individually
identifiable "di-rect hire" type jobs created which can individually identi$, the actual employees of the
Job Creating Entelprise flCE), most often in the non-regional center context.
When economists use the term "di-tect" jobs in the context of an econometric methodology such as
RIMS II, what is meant are jobs created directly by revenues (which in the EB-5 Immigrant Investor
Ptogtam results from an immigant investot's investment). Fot example, where a regional center-
based flew cofiunercial entelprise comprised of immigant investors renovates a building it
purchases, the employees of the vadous unaffi.liated tenants of that building would be considered
"direct" jobs in the context of an econometric report. However, as noted in USCIS' stated EB-5
policy, those jobs are not "diiect" in the sense set forth in 8 C.F.R. S 204.60X4)(i)(A) where the new
commercial entelprise is itself the employet that can provide Form I-9 or other similar
documentation on its own employees. The tenants' employees are not "direct" employees of the
regional center-based new commercial entelprise, nor may they be counted for other iob creation
credit calculations "unless" the tenant jobs were not pre-existent somewhere else, and merely were
existing iobs tansferred to the new teflant location ftom z prior location where they had existed.
To be clear, this report does in fact also set forth the numbet of EB-5 "direct" jobs that are likely to
be created by the JCE within its expanded production capacity as a result of the expansion project,
and that by the point of filing to remove conditions by way of the f.ormI-829 process, the JCE will
be fully compliant with 8 C.F.R. S 204.6(,)(4)(u1) in providing ptobative evidence for the proof of
"direct" EB-5 yob creation. In addition, and within the context of regulations which apply
particularly to regional centers, fot calculation of the resultant and newly induced and indirect job
cteation, is not Forms I-9, payroll records or similar documentation that will be the needed to meet
the USCIS' preponderance of evidence standard, but tathet "teasonable methodologies" such as
used fot this report.
2-2 Simulation Inputs
The data used includes an estimated constuction timeline and development costs provided by
PHMGR.
August 18,2015
t2
Industry and project related metdcs such as ouQut and employment u/ere compared to national and
regional data sources.
Information from the business plan for the proposed industry cluster was provided by PHMGR and
such information within the plan was evaluated and then incorpotated into this analysis for arca
specific background and demogtaphic pulposes.
Based on the data provided and corroborated, inputs were created for use in the RIMS II system to
model the economic impact of the operation phase of the project. The relevant information and
data used to develop the model inputs of the project was provided by PHMGR.
A summary of the proposed project follows:
Pleasant Hatbor Marina and Golf Resot Proiect - A 256-acre master-planned resort community
located in Bdnnon, lTashington, within the county of Jefferson. The total investment into the
ptoject wili be $53,872,652 and the EB-5 investrnent is projected to be $10.0 million. The remaining
ff43,872,652 wiII come from developet equity and domestic funding.
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GElnJctfEClfE Grtri
OGG*TdLI#C
EEi-rrirBCB
rItir:$E!B5rE
ElltE*iitHr6erE
q*rH..rtCorrr
FFTE
FlsIFE nilt
AIE
i&!oafnE
st EtiDr Hrldott!
otrrHlr{Go.ft
orerdiqrort?
rc'trd.fEPraFEG
)anrGrt
STEL
llrirOoctrrhlcrrhr,sdrry
lSnlEE tr
STErI
Itt-. furilr!.Tfr3
rr.ElrE
EdOilSFCriCG
sr18mff
Ssrt t{t
su4ul
sr'g,E.n
sr,rESrE
tr,5EB
s!m,E
5r{onao
$ronm
's,om
Slm,B
sa?.m
545rnmo
$i16,@
s{so.ofi
trE oo
sal'rsr
37I{AJil
sEm.oos,m
Sln,2oo
Srr|5. il
$,rrq7rt
I,jE..TXt
5:m/m
5588.ll5
9E,158
$:lm*ao
s3l'r€
$,,lr.E6
StttlE
srrr2.E
$!1843
Sr8rJr!
,1.r,,\7?
Sr,s9,126
38,!m"m
lm.oo
3t o,oo
5a!o.oo
sEm,oo
3:m,otr
$Jm,m
9/$o,00
Stm,o@
57.E]clrr,
S&rjo.7r.'
srm,m
seffiJ!|5
St,EEo,aBo
str8
August 18,2015
surs.4r 5firo
13
Construction
Construction will last approximately 30 months and the total hard constuctior costs of this project
will be fi35,906,295 (in curent dollars). The curent RIMS II multipliets are ftom 2010 therefore we
must deflate the expenditures to 2010 dollars.
According to the Tumer Construction Building Cost Index, the cost index in 2010 was 799 vs. the
2"d Quarter 2015 cost index of 9383. Therefore, the construction costs fot this project will need to
be firther teduced to teflect 2010 dollars.
3- www.tumerconstruction.c on f corterlt f files/Costlndex20 1 5Qrtr2.pdf
August 18,2015
t4
Quarter
2nd Quarter 2015
Ist Quarter 2015
4th Quarter 2014
3rd Quarter 2014
Year
2014
2013
2012
2011
2010
200e
2008
2007
2006
2005
2004
2003
2002
ffi
e02
864
830
8,L2
7gg
e32
e08
854
793
7L7
655
621
619
Index
938
s27
917
e08
A%
1.19
1_0s
0-se
1-34
A96
4.4
4.1,
2_t
1-6
4.0
-8_4
6.3
7_7
10.6
9_5
5.4
0-3
1.0
The Turner Building Cost lttdex is detertltined by the
following factors considered on a nationwide basis:
labor rat'es and productivity, tttaterial prices attd the
cornpetitive condition of the lnarketplace.
August 18,2015
15
To convert this figure to 2010 dollars we use the2"d Quarter 2015 cost index of 938 and divide it by
the 2010 cost index of.799. This gives us a figute of 938/799 = 1,.77. To convett the $35,906,295tn
cuffent dollars to 2010 dollars, the expenditure is divided by 7.77, to yield $30,689,141.
Construcdon Expenditute Curtent Dollars vs. 2010 Dollars
Current Dollars 2010 Dollats
$35,906,295 $30,699,141
Construction employment was derived thtough expenditure modeling based upon detailed
construcdon cost figures supplied by PHMGR. Verification at the I-829 stage of the EB-5 process
would be teceipts, tax documents, and other expense tecotds.
Furniture. Fixtures and Equipment Purchases (EB-5 Eligible Soft Costs)
Per the developer, the total expenditure for FF&E purchases will be $606,000 (in cutent dollars).
To convert this figure to 2070 dollats we use the 2015 Producer Pdce Index (PP! for merchant
wholesalets, which is 729.4 and divide it by the 2010 PPI of 118.0. This gives us a figure of
129.4/118.0 = 1.10. To convert the $606,000 in curent dollars to 2070 dollars, the expenditure is
divided by 1.10, to yield $550,909.
Fumitute, Fixtures and Equipment Purchases Curtent Dollars vs. 2010
Dollats
Curent Dollars 2010 Dollars
$606,000 $550,909
Expenditure into the wholesale trade industry that was used as input to the RIMS II model was
taken ftom the business plan provided by PHMGR.
Verifi.cation at the I-829 stage of the EB-5 ptocess would be verification of expenditue based upon
receipts, tax documents, afld other expense records.
Hotel Ooeradons
-
The total tevenue of the hotel will be $2,193,852 (trL cuffent dollars) during the first year of
operations.
16
August 18,2015
rYl
PROFORMA PROFIT AND IOSS
FY2 fYJ tY4 FY5
Roo?nl
Room llitht!
Orcupen<, irtr
O(curicd Roon Nthtr
AYCT.B? Oaliy F.tr (ADRI
R8PAR
iavcnlJ.
Room!
food
Sarcr4r
Orh.t food & 8cl!r.tc
Othar Oparatcd Ocp.rtftrnB
Rantalt e O'dlcr lncoflra
fotal taYanua
O.p.nm.n!al EIPant.a
ioom Epaft!",
tood & tac?.3!
oth.r Oparatad Ocpti e RCn!.lr
Iot a O.fL [rp.,r5
LrndBtrihicd Op.r.tint Erpcnrcr
Admin I G.0aral
M.rtaDn3
E xr3y Cort!
Properry Ogar & M.in
rol.l t nd6trib- Exp.n3c
firad Chrrlr,
TrxC'
lniurtnca
Manalmant fcar
lotd th.d Ch.Cg
Yotd lfofd trp(u.t
'(
ol G?o3t Ra.
To convert this figure to 2070 dollars we use rhe 2075 Consumer Price Index (CP! for lodging away
from home, which is 319.084 and divide it by the 2010 CPI of 280.431. This gives us a figure of
319.084/280.431 = 1.14. To convett the $2,193,852 tn cuffent dollars to 2010 dollats, the
expenditure is divided by 1.74, to yield fi7,924,432.
Revenue into the accommodations industry that was used as input to the RIMS II model was taken
ftom the business plan provided by PHMGR.
Vedfication at the I-829 stage of the EB-5 process would be tax retums and other financial
statements.
Restaurant Ooeradons
The galley bistro will hire 13.0 direct employees by the first yeat of operations
Direct employment into the food and beverage industry that was used as input to the RIMS II
model was taken ftom the business plan ptovided by PHMGR.
66
2r,090
&r1
9,536
s219.93
s91.07
65
24,090
509a
12.045
S22{.,12
s1i6.16
65
2{.090
t',(
i{,213
s229.00
s139.E7
55
2a,0s
t9,(
la.2tl
5233.58
s1.2.66
65
2.,090
59r(
i4,213
s238.25
s145.52
96 5*
0rt
olx
olt
,11
0ra
r6r
s2,r 19,261
s8,775
s2.194
s2,t9,r
96,071
s15.357
J1rr3152
96 5t
0.t
0lx
0tr
t lla
orx
t&*
s2.703.139
911.193
s2,798
32,79t
558.75.
519.5EE
31Da2r
,6 6,.
0.r
ot*
0tt
, lra
0rr
r6t
s1,254,8@
sr3,,177
s3,369
s3,369
Sm,7s,
s23,5t5
31:!5rr5t
x6r
0a:
0lt
0li
2lx
or{
spl
s!.319.896
513,74 7
s3,.37
S3,.t,
st2,L72
s2{,0s7
33,.35,r13
96 6r
or;
0rt
0lt
llr
0rx
tor
s3,385,29,r
s1,r.022
s3.50s
s1,505
sr3.515
s2a,t18
S3,505,tm
s117,92r
S.7,17r
s107.r19
s272.918
s1.7{2.079
9lx
s703.03,
51E,518
sr3,303
9rta,e$
5252.810
s175.207
S131./tO5
s1{..881
s71..30r
116,x
91 6i
!t t*
,rr*
,at
tl*
lr.
att
,r l*
,tr
lat
llr
s258,066
s178,711
s1t r,033
sr47,?E0
5r28,590
5120,286
!.8,1r4
s1o9.976
s278,376
51,r76,92 I
s2r(
lt 6r
9t 6a
l,
'r,a,at
,t*
tr*
,r*
att
,l,r
!t{
lat
!)r
s717.09r
318.888
333,969
3769,t55
sr6,78S
sto,Tlr
970,203
s77?,702
51,r34,300
52r(
,r 6*
91 6n
r5lr
u,at
,aa
tlr
tnr
alt
ll ,t
tt*
ta3
rl*
s457.760
912,057
521,58.
949t,JO2
9:71,120
511.,08X)
s85.560
59.,336
s465,097
s218,266
s1,r5,511
31Cr.r3!
5U0.326
959r,235
59r,940
s39.r76
5E9,5.S
5226.551
S1..,16,812
52t(
,l 6r(
,:6t
t5 ,!a
,lrt
,r*
tlt
!9t
r,*
li r*
Itr
I 4t(
!x
3533.r7r
s15,379
s27,658
sGr6.tt6
s2r3,427
s182,285
51t6,7 1{
5150,736
sr.3,162
5112.692
s.l9.077
5112.179
s2El,9.|,l
s1.812,.59
5?X
,t 6r
9i 6X
lt ,i
tLr
7$(
',T!9{
art
ll l*
Itt
l$
!}x
S73 1.'139
5r9,265
s!4.518
37!5,39.
Current Dollars 2010 Dollars
$2,793,852 fi7,924,432
August 18,2015
17
Hotel Revenue Curtent Dollars vs. 2010 Dollars
Verification at the I-829 stage of the EB-5 process would be W'-2's, I-9's andf or other payroll
documentadon.
2-3 zuMS II Final Demand and Employment Multipliers
Shown in the chart below are the act:r.l RIMS II final demand and employment multipliets used in
each project for this analysis specific for the counties urithin the ptoject region.
INDUSTRY
Multlpllcr
Flnal Oemnnd Olrect Efiect
Ouput/l/
(dollars)
Earnlng!l2/
(dollars)
EmploymenUU
(jobs)
Value-addcau'V
({lollara)
Earnlngvt
(doll0nr)
Employment/tr'
(iobs)
2(XXP0 CorBtruction 1.5941 0.5080 'I 1.l€8 1 0.8498 t.4Tr3 1.6895
tl2{Xx)0 ]Vhobsab bade 1.3749 0.iO7I 7.W 0.9r 14 1.3595 1.6757
7211A0 HoHr arrd mo{els, includng caiino hotels t.tlitt 7 0izn 117W.0.9r54 1.,1069 f .ixm
722(m Food iervice! rnd fintiDg plrces 1.4441 0.4266 19.5401 0.7939 1.3970 1.zffi
Reghn Oefinlim: Cldhrn, WA; Jefie]3oo, wrt Kit3ap, W
'hdudcs Govclrmcnt cnE plisas.
t. Eactr €fluy in 6lu'Irl 1 represettts he totsl doler cfiange in outpufiet occ-lrrs in al indusries fu each addtional dola, ol ouput dehrered lo
fnd demand by the hdrnry corespondng b fi€ eflry.
2. Each entry in colu.m 2 reprcaeris ille lotel dolar crrenge an eanimE d hq,,schdds empbyed by aI induslrics b, eadr dddmal dofiar ol
otrF., dehr# b find rhrnrrd by thc iratstry corrE3pondng b $e e(nry.
3. E clr entry in cdum 3 represens tle btel d|3ngE in nuflber ofi]bs th81 rculs in dl indusries tor es.rt addftionel I millim ddhrs ol ouEut
(bl\/ered b final demand by fie indusry cotrespon(lng to fhe eilry. Because fie emdrymem mu@ins are besed on 2010 deta, fie oupr.i
&f,\,ered b find dfiiard stmrdd be in 2010 (blels.
il. Eldl €{rrry in coluflm 4 rcpreaefits hc rotd dolrr dlenge in value ded thet mrrs in dl -nduslries b edr eddftiond (lolal ol outpul
delt Ered D find deflfld by fle irxlust]y correspondm E lhe eflry"
5- Eaci €rfiy in colurm 5 represems tre blal dolat .fiilge in earlngE ot houseMds employed by eI irdu$riB br eadl ddrional dolar ol
e.rniius p.i, drecdy b trrusehol& cmdoyd by tle furustry co.reapdrdng !o the entry.
6. Each €fltry in colunm 6 represems he tolal dlang|e in number ol Fbs h r[ indH]ies ior eaElt dliorBl iob h tE irxrlEEy coflEsmrdng lo
the emry.
NOTE-MunipIeB are brsd oo fE 2002 Bencilnark lnpllt€upfl TaHe tu ille Nrtioo and A)10 regionel dare- Indusry Lisr A ireilifEs dle
hdust,ics concspondirg b ilE efilrica.
SOURCE-Begional hgu-OuB{ Modetng S}stem (RIMS ll), Regbnal Producl Exvisaon, Bureau ol EDorpfiiic Analy$s.
2-4 Calc,,tlation of Employment Results Using Final Demand Multiplier
Construction
Looking first at construction $IAICS codes 236 and237),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 of jobs produced based on the expenditures for constnrction of the developmeflt, which is
shown in Table A of this report. This figure is $30.689 million (in 2010 dollars). Therefore if all the
iobs were counted, there would be $30.689 times 11.1851, or 343.3 jobs. This figule includes direct
and indirect jobs.
Construction will last approximately 30 months therefote we can count ditect iobs ftom the
expenditure.
The employment multiplier is 1.6895, which meafls that for every 1 direct job there are 1.6895 total
jobs. Hence for every 1 direct job there are 0.6895 inditect jobs. If there are a total of 343.3 jobs
August 18,2015
18
when all categod.es are counted, then based on this multipliet, there are 203.2 duect jobs and 140.1
indirect jobs. This is the figure shown in Table A.
Fumiture. Fixtues and Equipment Purchases
For NAICS codes 4232, 4234, and 4236 (Furnitute and Home Fumishings Merchant Wholesalers,
Professionai and Commercial Equipment and Suppliets Merchant \X/holesalets, and Household
Appliances and Electricil and Electrical Goods Metchant \Wholesalers), the final demand multiplier
ts 7.8220 and the employment multiplier rs 1.6757. The final demand multiplier is used to determine
the total number of jobs produced based on the purchases of FF&E fot the development, which is
shown in Table A of this (eport. This figwe is $0.551 million (in 2010 dollars). Therefore if all the
jobs wete counted, there would be $0.551 imes 7.8220, or 4.3 jobs. This figure includes direct and
indirect jobs.
However, FF&E purchases are a one-time evenq therefote we can only count indfuect jobs from the
purchases. The employment multiplier of.1 .8220 must be reduced (or have the rlirect effects taken
out) to reflect indfuect impacts only.
The final demand multiplier of 7.8220 is divided by the employment multiplier 1.6757 to yield
4.6679 . This figue teflects the direct effects only therefote we then subta ct 4.6679 from 7 .8220,
which gives us the indirect final demand multiplier of 3.7547.
The indirect multiplier of.3.1,547 is then multiplied by the expenditure of $0.551 to produce a total
number of indirect jobs of 1.7. This is the figute shown in Table A.
Hotel Ooeradons
-
Fot NAICS code 7277 (Iraveler Accommodations), the final demand multiplier is 74.7822 and the
employment multiplier is 1.3302. The final demand multiplier is used to determine the total number
of jobs produced based on the projected revenue in NAICS code 7271, which total $7.924 million
(in 2010 dollars), as shown in Table A of the report. Hence if aII the jobs were counted, there would
be$1.924 times 14.7822, or 28.4 iobs. This figwe includes ditect and indirect jobs.
The employment multipliet is 7.3302, which means that for every 1 dirssl job thete are 7.3302 total
jobs. Hence fot every 1 dfuect job there arc 0.3302 indirect jobs. If thete are a total of 28.4 jobs
when all categories are counted, then based on this multiplier, thete ate 27.4 duectjobs and 7.0
indirect jobs. This is the frgure shown in Table A.
Restautant Ooemtions
For the restaurant operadons (I\TAICS code7225), the employment multiplier is 1.2309. The ditect
employment multiplier is used to determine the total number of jobs produced based on the ditect
job input fot NAICS code7225,which is shown in Table A of this report. This figure is 13.0 ditect
iobs. Therefore if all the jobs were counted, thete would be 13.0 ditect jobs times 7.2309, or 16.0
iobs.
The employment multiplier ts 1..2309, which meafls that for every 1 direct job, there arc 1..2309 total
jobs. Hence fot every 1 direct job, thete are 0.2309 indirect jobs. If thete ate a total of 13.0 ditect
then based on this muitiplier there are 3.0 indirect jobs and 16.0 total iobs. This is the figure shown
in Table A.
t9
August 18,2015
2-5 Guidelines and Methodology for Construction Employment Cteation
USCIS guidelines state that di"ect construction jobs iasting 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 creadon is capitai expenditure to
determine direct and indirect iob creation and then to subtract the direct jobs.
The project will include more than two years of construction. Therefore, ditect 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 and the EB-5 eligible cost of futnitute, fixtues and equipment purchases. Soft
costs, such as development fees and permitting 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 WJ with final estimates of all expenditures of the
project. Of the $53,812,652 in capital expenditure, $35.906,295 will be spent on hard costs for the
development, 5606,000 for EB-5 eligible soft costs (ail in curtent dollats).
The economic impact calculations in this report are based on the RIMS II finat demand multipliers.
The numbers in the following tables are calctilated by multiplying expenditues or revenue by the
RIMS II multipliers for the region, fot example: the hard construcdon costs by the RIMS II
construcdon multipliers.
2-6 Economic Impacts of The Pleasant Hatbot Marina and Golf Resort Project
Construcdon:
According to the business plan, the hard construction costs are expected to be $30.689 million (in
2010 dollars). The construcdon will take apptoximately 30 montfrs to complete.
The RIMS II final demand multiplier for construction is 11.1851. lWhen multiplied by $30.689
million (2010 dollars) that creates 343.3 new jobs.
Table 2-1, an.d 2-2 show the economic impact of the consttucd.on expenditures for the 20 majot
industrial classifications in the RIMS II input/output model. Please note that in these and
succeeding tables, ouq)ut and eamings are given in thousands of dollars.
Industry group
Agriculture, forestry, fishing
Mining
Utilities
Construction
Manufacturing
Wholesale trade
52
49
10609
473
141,
Employment Output
335
218
236
30852
2421,
470
Eamings
71,
Table2-L. Inctease in Oulpu! and Eamings fot &t0.689 Million
August 18,2015
1.9
1.5
0.6
204.3
10.6
2.2
20
in Construction
Retail tade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Professional, scientific, services
Management of companies
Administrative and waste management
Educational services
Health care and social assistance
Arts, entertainment, and recreation
Accommodation
Food services and ddnking places
Othet services
Households
Industry group
Agriculture, forestry, fishing
Mining
Utilities
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Professional, sciendEc, sen ices
Management of companies
Administrative and waste management
Educational services
Health care and social assistance
Arts, entertainment, and recreation
Accommodation
August 18,2015
Output/Employee
776.9
746.4
396.9
151.0
227.8
2t4.6
85.3
735.3
259.3
z>7. !
262.5
172.7
aaA 1LLA. I
63.9
52.7
108.0
49.1
89.2
Earnings/Employee
t t.J
35.'t
82'5
57.9
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
16.4
27.5
i l.z
3.6
2.t
3.1,
9.9
1,3.3
0.3
6.5
2.7
17.9
3.6
1.3
1,1,.3
6.8
2.7
3170
485
534
780
2605
2292
61.
417
741,
1933
775
t20
772
954
0
1040
1.57
t20
181
132
859
25
1,66
52
853
58
37
21,8
273
21,
Total 343.3 48,972 15,587
Table 2-1 shows that there will be a total of 343.3 new jobs cteated from the construction of the
development. Total output will rise about $48.91 rnillion, while total household earnings would
increase by about $15.59 million. Table 2-2 shows that output per new worker for the construction
sector would be about $151,000, with avemge annual earnings of about $51,900. For all new
workers, the correspofldiflg figures arc $742,500 and $45,400.
Employment
1,.9
1.5
0.6
204.3
10.6
,,)
37.2
3.6
2.1
3.1,
9.9
13.3
0.3
6.5
2.7
t7.9
3.6
1,.3
21
Table 2-2. Ofiput and Eatnings Pet New Worker for $30.689 Million (2010 Dollars) in
Constnrction
Food services and ddnking places
Other services
Households
17.3
6.8
2.7
62.9
740.2
0.0
19.2
40.L
8.0
Total 343.3 t42.5 45.4
Furniture. Fixtures and Equipment Purchases (EB-5 eligible soft costs):
According to the business plan, the FF&E purchases are expected to be $0.551 miilion (2010
dollars).
The RIMS II final demand multiplier (indirect impacts only) fot wholesale trade is 3.1541,. lVhen
multiplied by $0.551 million (2010 dollars), that creates 1.7 new jobs.
Table 2-3 and 2-4 show the economic impact of the expenditures for the 20 maior industdal
classifications in the RIMS II input/output model. Please note that in these and succeeding tables,
ouq)ut and eamings are gfven in thousands of dollats.
Table 2-3 shows that thete will be a total of 7.7 new jobs created ftom the FF&E purchases related
to the development. Total output will rise about $0.21 miilion, while total household eamings
Industry gtoup
Agricultue, forestry, fishing
Mining
Utilities
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Professionaf scientifi c, services
Management of companies
Adminisftative and waste management
Educational sewices
Health care and social assistance
Arts, entettainment, and recreation
Accommodation
Food serwices and drinking places
Other services
Households
Total
Employment Output Eamings
0.0
0.0
0.0
0.0
0.0
7,t
0.1
0.1
0.0
0.0
0.1
0.0
0.0
0.1
0.0
0.1
0,0
0.0
0.1
0.0
0.0
1.7 207
0
0
0
0
0
0
0
7
1,
2
52I 44
2
2
7
1
7
2
0
7
0
3
0
0
7
7
0
59
7
4
)
3
71
4
7
3
7
8
7
0
3
5
0
August 18,2015
22
Table 2-3. lncrcase in Employment, Ou(put, and Eatnings fot $0.551Million (2010 Dollars)
FF&E Purchases, Indirect Iobs Ontv
would inctease by about $0.06 million. Table 2-4 shows that output per new worket fot the
wholesale trade sector would be about $144,800, with average annual eamings of about fi42,1.00.
For all new workers, the corresponding figures are $118,800 and $34,100.
Hotel Ooeradons:
The hotel is projecting revenue of $7.924 million (2010 dollars) during the fust year of opetations.
The RIMS II final demand multiplier for accommodations is 74.7822. $[hen multiplied by $1.924
million (2010 dollars), that creates 28.4 new iobs.
Table 2-5 and 2-6 show the economic impact of the expenditutes for the 20 mqor industrial
classifications in the RIMS II input/output model. Please note that in these and succeeding tables,
output and eamings are g{ven in thousands of dollats.
Industry group
Agdculture, forestry, Frshing
Mining
Employment Output Earnings
4 I
00
Table 2-4. Ou@ut and Eamings Pet New Wotket for $0.551 Million (2010 Dollars) FF&E
Putchases, Indirect Jobs Only
Industry group
Agriculture, forestry, fishing
Mining
Utilities
Construction
Manufactudng
Wholesale trade
Retail trade
Ttansportation and warehousing
Information
Finance and insurance
Real estate and tental and leasing
Ptofessional, scientific, services
Management of companies
Administrative and waste management
Educational senrices
Health care and social assistance
Arts, entertainment, and recreation
Accommo&tion
Food services and ddnking places
Other services
Households
Total
Output/Employee
95.6
84.5
271,.2
701,.2
1,28.1
1,44.8
57.6
77.2
150.1
774.0
1,46.7
85.5
1.54.0
42.5
35.7
73.0
34.2
62.2
42.5
97.5
0.0
118.8
Eamings/Employee
t9.9
0.0
55.0
33.4
27.0
42.1
18.3
30.1
34.8
39.3
7.7
36.0
60.8
1,6.5
't2.8
31.2
1,1,.3
18.1
12.7
26.9
4.7
34.1
Employment
0.0
0.0
0.0
0.0
0.0
7.1,
0.1
0.1
0.0
0.0
0.1
0.0
0.0
0.1
0.0
0.1
0.0
0.0
0.1
0.0
0.0
1,.7
and for Hotel Opetationsrn
0.0
0.0
ZJ
August 18,2015
Total 28.4 2,754 823
Table 2-5 shows that there will be a tot^l of.28.4 new jobs cteated from the opetation of the hotel.
Total output will rise about $2.75 million, while total household eamings would increase by about
$0.82 million. Table 2-6 shows that output per new worker for the accommodation sector would be
about $90,000, with average annual earnings of about fi27,400. For all new workers, the
corresponding figures are $96,800 and $28,900.
Utilities
Construction
Manufacturing
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insurance
Real estate and rental and leasing
Ptofessional, scientific, services
Management of companies
Administrative and waste management
Educational services
Health cate and social assistance
Arts, entertainmen! and recreation
Accommodation
Food serrices and drinking places
Other services
Households
Industry goup
Agdcultue, forestry, fishing
Mining
Utilities
Construction
Manufacturing
lTholesale trade
Reail uade
Transportation and warehousing
Information
Finance and insutance
Real estate and rental and leasing
Profes sional s cientifi c, services
Management of companies
Administrative and waste management
August 18,2015
0.1
0.1
0,1
0.1
1,.1
0.3
0.2
0.2
0.7
0.4
0.1
0.7
0.1
0.9
0.3
21..5
1.0
0.4
0.1
Output/Employee
140.0
153.8
399.7
151.7
223.6
2t4.5
85.3
7t3.7
206.3
253.9
213.6
1,24.3
227.0
66.9
JJ
27
32
73
7
7
6
4
30
17
71
9
8
24
6
17
3
45
5
587
18
1.6
1
93
JI
46
41,
1.49
55
73
46
8
101
't5
7932
60
55
0
Employment
0.0
0.0
0.1
0.1
0.1
0.1
1.1.
0.3
0.2
0.2
0.7
0.4
0.1
0.7
24
Earnings/Employee
JJ.J
0.0
82.2
52.4
44.2
63.1.
28.0
52.7
50.5
59.0
11.8
54.3
95.4
24.5
Table2-6.and Per New Worker for Hotel
Educational sert ices
Health care and social assisance
Arts, entertainment, and recreation
Accommodation
Food services and drinking places
Other services
Households
Industry $oup
Agdculture, forestry, fishing
Mining
Utilities
Construction
Manufacturing
Wholesale uade
Retail trade
Transportation and warehousing
Information
Finance and insutance
Real estate and rental and leasing
Ptofessional scientific, services
Management of companies
Administrative and waste management
Educational sewices
Health care and social assistance
Arts, entertainmeat, and recreation
Accommodation
Food services and drinking places
Othet services
Households
August 18,2015
0.1
0.9
0.3
21..5
1.0
0.4
0.1
53.1
1.07.9
52.9
90.0
62.9
1,49.6
0.0
20.4
47.6
16.8
27.4
1,9.2
42.6
8.1
Total 28.4 96.8 28.9
Restaurant Ooerations:
According to the business plan, the galley bistro will employee 13.0 direct jobs during the first year
of operations.
The RIMS II dfuect employment multipliet for food and beverage is 1.2309. When multiplied by
13.0 direct jobs that creates 16.0 total new jobs.
Table 2-7 and 2-8 show the economic impact of the opetations for the 20 major industrial
classifications in the RIMS II input/output model. Please note that in these and succeeding tables,
ouq)ut and eamings are given in thousands of dollars.
Employment Output Eamings
0.0
0.0
0.0
0.0
0.1
0.1
0.5
0.1
0.1
0.1
0.8
0.2
0.0
0.2
0.1
0.4
0.1
0.0
t3.0
0.2
0.1
4
0
72
6
29
77
44
18
17
77
80
20
6
12
3
45
5
3
870
ZJ
0
1
0
J
2
5
3
14
8
4
4
6
9
2
5
1
20
)
7
266
7
1,
25
Table 2-. Increase in and for Restautant
Total 16.0 1 ))1 363
Table 2-7 shows that there will be atotal of 16.0 total new jobs created from the operation of the
restauraflt. Total oulput will dse about $1.23 million, while total household earnings would increase
by about $0.36 million. Table 2-8 shows that output per new wotker for the food and beverage
sector would be about $66,900, with avetage annual eatnings of about $20,400. For all new
workers, the corresponding figrues are $76,700 andfi22,700.
2-7 Yenfrcation/Source of Inputs
C onstruction / Furniture. Fixtures and Equipment Purchas es
The hatd construcdon costs and FF&E expenditues that were used as input to the economic model
wete ptovided by the construction bids ftom Statesman Construction, T LP and Craig A. Peck &
Associates. The bids are shown below:
Table 2-8. Output and Earnings Per New Wotker for Restautant Operatiofls
Industry goup
Agriculnrre, forestry, fishing
Mining
Utilities
Construction
Manufacturiflg
Wholesale trade
Retail trade
Transportation and warehousing
Information
Finance and insumnce
Real estate and rental and leasing
Professional, scientific, services
Management of companies
Administative and waste management
Educational services
Health care and social assistance
Arts, entertainment, and recreadon
Accommodation
Food senrices and drinking places
Other services
Households
Total
Output/Employee
1,24.2
132.8
423.2
767.4
253.6
228.4
90.5
722.4
231.7
270.3
107.0
1,30.4
243.3
'7) )
56.8
102.0
50.6
94.9
66.9
139.8
0.0
76.7
Eamings/Employee
28.9
66.4
88,8
54.5
43.6
67.7
29.7
56'3
55.9
63.9
7.4
56.3
t00.2
27.3
21,.8
45.7
17.1,
27.8
20.4
39.6
7.7
Employment
0.0
0.0
0.0
0.0
0.1
0.1
0.5
0.1
0.1
0.1
0.8
0.2
0.0
0.2
0.1
0.4
0.1
0.0
13.0
0.2
0.1
16.0 22.7
August 18,2015
26
Estimated cost
PUD Transformer
Create Wetland in Kettle G
Construct
298,218
Phase 1
Marketing . 51?,170
40,391,041
PHASE Comments
552,843
--+
1,304,450
WDFW Boat Access
siteof
Tanks and Drainfield
Maritime
HWY 101 / BPR lntersection
450,000
1q0,,!q9
r40,000
_4!q900
wl -8,,T0,000
Maritime Area lnfrastructure
_!E!_. l Water/Sewige
Pleasant Harbor Golf Resort Statesman Construction LLP
9300 E Raintrse
Cost Estimates
Paul Hospolhorn
Construction Manager
March 18,2015
August 18,2015
27
- -t---|--
l-
l
.T
t_
I
9,330,700
____L
-il
ca[g
Peck
lllozlob
Tacoma,
technical
253{//}.A482
July 28,2015
Phoenix, AZ
BYEMAIL:
RE:
Dear Mr,
This
enginecring
Washington.
l.
2.
Well
pump
Water
Water
3.
Grade
Sepdc
Grade
Consmlction
rria
98446
Cost
Marina Golf Resort
Pleasant
Site
site for conveyors, and crushers by
system washing processes
sirc
equipment
and north retaining wall
to be used as interim septic andat WWTP
of
of Construction Cost was from predesign
Marina and Golf Rcsort in County near Brinnon,
items were estimated from plans.
Site $8,500,000
1,750,00075 acres the site require clearing at $
1,000,fi)0 yards excavated, screened,
or placed embankments at $6.75lcy =
Water Transmlsslon $900,000
screens, pump, power supply,
400,fi)0 gallons at $1.25lgal
150,000
500,fl)0
250,000piping 4000 LF at $62.50
test
and
to
$140,000
50,000
25,000
r5,000
50,000
450,000
55,000
tanks 150,000
4.
Aeratioh
i
August 18,2015
28
Paul Hospelhom,
tl
Metcrlrts
6,750,000
Acquire
Pump
Install
Gradc
Grade
Water
c
ocre at
to se_Dtic tanks
to
line field
and
B5.
7
6.
ofsynthetic liner placed at $0.30 =
tEatDent
and provide tcmporary
the canp t€orporary us€
surface
informatioo corceming thc
contact mc.
end
and
August 18,2015
29
90.(re{'
60-00t,
50,fi,o
45,000
45(l,lno
150,000
300,000
100,000
100,000
200,000
40,000
30,000
75,000
20,000
35,000
gpncrsl or theso
Craig A. Pec( P.E.
cost,
If I can provido you wi$
estimstes of construction
Very truly yors,
tr*Wqt
\
Budget Statesman Construction LLP
9300 E Rainbee
Scottsdale, AZ 85260
Maritime Village
CONSULTING FEES
&
E_!ci!99!Ilg 27 0
TOTAL COI{SULTING
FEES AND PERMITS
Fees
0
0
D gvelgpq'gl'Ul rnlpagliges _
Control
Permits 0
0Pemit Fees
TOTAL FEES AND 0
ON SITE DEVELOPMENT
FeatuerYGrills/Tennis Court
and Acces$ries
TOTAL ON SITE ttt,oool
0
0
.EXCAVATION
Oemolition
0
E0-001 5 Control 0
E0-0025 tile and Gravel 0
E0-0035 0
TOTAL 0
F0-0000 .FOUNDATION LABOR
F0-0025 Flatwork .- a8'9!9r 0
TOTAL COST
PROJECTED
0
UNIT
PROJECTED
COST PER
UNIT SFJOBDESCRIPTION
PHASE CODES
0
0
0
c't-0000
A0-000
50,000
6,000
12,000c1-0025
c1 -0030
c1-0005
c1-0010
't 1,000
c1-0040
c2-0010
c1-0035
c2-0000
_ c?.q999
c2-0040
c2-0055
D2-0090
D2-0072
T0-0305
DG0070
c2-001 5
D0-0000
D0-0076
E0-0010
z0-0050
E0-000s
August 18,2015
30
L
T
c
c
0
c2-0025
Budget Statesman Construction LLP
9300 E Raintree
Scottsdale, M 85260
TOTAL FOUNDATIOI.I LABOR
.CONCRETE MATERIALS
Maritime Village
walls
stairwells and Elevator walls
TOTAL CONCRETE MA
.SITE CONCRETE
and sound
& lnspections
TOTAL CONCRETE S/I
.FRAMING
Partition Walls
Trusses/Crickets
Patio Doors
Stairs
TOTAL
Material & Labor
TOTAL
.EXTERIOR
Patio Screens/Ralllngs
(!! 39@s)
--
Stone & Tile
Walls & Decorative Turets
KG0040
K0-0055
KO-0000
L0-0000
1G.0005
981,000
12,000
1,119,000
10,000
1,725,000
87,000
2,054,000
0
0
0
0
0
0
0
0
0
52,000
s2,000
366,000
43,000
27,OOO
't2,000
0
0
0
0
0
0
TPLUMBING ANO HEATING
IJ-
-----t--0l
TOTAL COST
PROJECTED
0
UNIT
PROJECTED
COST PER
UNIT SFJOBDESCRIPTION
PHASE CODES
1 1,000
t0-0015
F0-0035
G0-0000
G0-0050
H0-0000
H0-0030
H0-0055
l0-0000
t0-0010
t0-0012
t0-0050
G0-0020
G0-0030
0
0
t0-0070
J0-0000
J0-0005
K0-0000
K0-0005
K0-0035
August 18,2015
Fktures and Labor 417
31
_'ROOFtryG
.-TOTAL EXTERIOR
0
Budget Statesman Construction LLP
9300 E Raintree
Scottsdale, M 85260
Maritime Village
conduit
Alarms
Re-Work
TOTAL
.ORYWALL
'
INSULATION
Repairs
TOTAL DRYWALL / INSULATION
*PAINTING
lnterior 181 ,000
Exterior 87,000 0
o0-0030 Lines 0
TOTAL
P0-0000 .FLOORING
P0-001 0 Tile & Stone 93,000 0
P0-001 5
TOTAL 0
o0-0000 .INTERIOR FINISH
Q0-0005 I 84,000 0
Q0-001 5
00-0025
0
CabinetYMirrors
Q0'0030 - Granite 0
Q0-0035 Accessories 21 0
0o0-0040
Q0-0050
21,000
0
TOTAL GOST
PROJECTED
0
UNIT
PROJECTED
COST PER
UNIT SFJOBDESCRIPTION
PHASE CODES
L0-001 0
L0-0025
L0-0040
M0-0000
33,000
U
0
0
0
0
0
0
0
0
0
0
0
0
0
Tubs & Showers
6'13,000
21,000
TOTAL PLUMBING AND HEATING 1,0s8,000
16'l
462,000
495,000
17,000
21,000
482
72
TELECTRICAL
Fb(ures
Materials & LaborM0-0005
N0-0000
N0-0020
o0-0000
o0-0005
o0-001 5
w-q995
M0-0045
M0-0010
M0-0025
M0-0030
N0-0005
N0-001 0
August 18,2015
Doors
13,000
32
(
(
trconditioning & Heatlng (HVAC)--
:ire Sprinklers
(
(
(
(
(
(
(
(nsulation
)rywall Materials & Labor
0
& Clos€t Shelving
Budget
R0-0005
s0-0000
s0-0005
s0-001 0
T0-0000
T0-0005
T0-001 0
T0-0030
T0-0040
T0-0045
T0-006s
T0-01 05
T0-01 1 5
T0-0300
T0-0305
T0-031 0
u0-0000
Statesman Construction LLP
S300 E Raintree
Scottsdale, M 85260
TOTAL INTERIOR FINISH
Maritime Village
"APPUANCES
package 1 18,000
s4,000
8,000
2,000
TOTAL APPLIANCES
-CLEANING
TOTAL CLEANING
21
'21 0
.COMMON AREA
17 0
0
0
0
Fixtures
Entrance Door
Hand Raillng
&Rooms
Automated Access System
10,000
412,000
storeftont
& Accessories
0
TOTAL COMMON AREA
*PROJECT COSTS
u0-001 0 Rental
uo-001 5 Purchases / Tools
u0-0020 Power
u0-0025 Water
u0-0030 & Fax
u0-0035
u0-0045
u0-0050
u0-0205 Supervisors
u0-02 1 0 Labor
u0-030s Costs
TOTAL PROJECT COSTS
5,
Facilities
(Dumpsters)
TOTAL COST
PROJECTED
0
UNIT
PROJECTED
COST PER
UNIT SFJOBDESCR!PTION
PHASE CODES
R0-0000
349,000 0
0
0
0
0
0
0
!
0
0
0
0
0
0
0
0
0
0
0
August 18,2015
217
JJ
(lnterior Conidors/Halls)
_ q,gqq*
u0-0105
Budget Statesman Construction LLP
9300 E Raintree
Scottsdale, AZ 85260
Maritime Village
TOTAL COST
PROJECTED
0
UNIT
PROJECTED
COST PER
UNIT SFJOBDESCRIPTION
PHASE CODES
v0-0000
v0-0010
v0-001'l
v0-0012
v0-0015
w0-0015
vG.003s
v0-0040
w0-0000
w0-0020
w0-0025
w0-0030
w0-0050
v0-0020
v0-0030
F-- --
TOTAL FINANCIAL COSTS
MARKETING COSTS
Home Operatng
TOTAL MARKETING COSTS
GENERAT & ADMINISTRATION COSTS
& Administration Costs
rployee Payroll Fees
TOTAL CONTINGENCY
Fees House
&
CONTINGENCY
FINANCIAL COSTS
401K Retirement Plan
Taxes
Fees
On Construcuon Loan
Taxes
Fees
TOTAL GENERAL & ADMINISTRATION
Benefits
Risk lnsurance
lnsuranc€
Fees
& Title Fees
Yo-qqt!___
Y0-001 5
Y0-0000
Y0-0005
z0-0000
z0-0005
Y0-0020
Y0-0025
9,330,700
9,330,700
HARD CONSTRUCTION COSTS ONLY
GRANO TOTALS
I
August 18,2015
34
Bistro Building Budget
Description Quanlty Gost per Unlt Estlmated Gost
Permit B/O
Mobilization
Tem porary pourer installation B/O
Temporary pot€r usage B/O
Temporary telephone installation 1 150 150
Temporary telephone usage 6 190 114p
Temporaryofflce D&R 2 300 600
Temporary office usags 0 250 1500
Temporarytoilet B/O
Temporarywater B/O
Temporary heat B/O
Ovsrhoad
Site Supervision 38400
'rdacl overhead 27634
Englnssrlng
Cival and survey B/O
Structural B/O
Mechanical B/O
Dsmolltlon
Cap water and sewer lines 2 200 lm0
Disconnect elechical B/O
Disconnect telephone B/O
Disconnect cable B/O
Removal of usable goods B/O
Landscapo protection 1.lA
Hand demolition l\lA
Machine demolition yo
Debris rcmoval lnc,luded
Ercavation
Machlne excavatlon 20000
Hand excavation
Machine ditching
Hard ditching
Machine backffll lnduded
Hand bacldill lnduded
Backfill materials lncluded
Foundation
Building layout 16hrs 65 10ll()
Batterboard materials ,l 300 300
Batterboard labor 24 65 1560
Footing form materials 47437
August 18,2015
35
Footing form labor lncluded
Wallform material lncluded
Wallform Iabor lnduded
Re steel materials lncluded
Re steellabor lncluded
Foundation vents lnduded
Foundatbn bolts lncluded
Foundation hardriere lnduded
Concrete lncluded
Concrete pumping lncluded
Foundation wall patchins 24 65 'tsfl)
Foundatbn urall damp@!g_
Foundation stem walls
50tx)
58000
Drainage
4" footing drains
4" downspout drains
drain rock
1et FloorSlab
Vapor banier 1 180
8285
slab 12520
Framlng
Hardware
Sillsealer
Mudsill
StructuralSteel EEO79
1st floor rim ioist
1st floor joists
Blocking
Exlerior wall framing 23400
Exterior wall sheathing 13780
lnterior wall hamino 179/.7
Blocking
Ceilins backins
Rafters
Trusses
Ceilins backinq
Soffit vent
Roof sheathing lncluded
Roof sofrit framing
Rake and fucia
Rake mouldlng
SMightcurb
Misc backing and framing
SteelStairs 300m
Roofing 37800
SMishtmns
Roof b wallflashing
Step ffashing
August 18,2015
36
uborade
CONTINGENCY s2000
Subtotal $1,150,715
Contracilors Margin 8it6.028
Subtotat S1.196.743
WSST $to7,7o
Total 91.3(l4.4s0
Hotel Ooeradons:
The Developer's projecdons related to the Maritime Village suites ate based on the market analysis
prepated by Hospitality Advisors Gtoup, as well as tfre 2015 HOST Almanac, which includes U.S.
hotel operating statistics for 2074. Specifically, the Developer's figures are based on the repotted
ratios-to-sales fot Limited service hotels in the Pacific Region.
Occupancy and Average Room Rate (ADR) ate the t'wo variables that determine Rooms Revenue
and Revenue per Aveilable Room (X.evPAR). Hospitality Advisors Group predicts that the suites
will achieve an ADR of $229 and occuparicy rate of 59o/o 21 512[ilization. The following is
Hospitality Advisors Group's discussion of the local matket data that forms that basis for its
conclusion:
To aid in this study, Hospitality Advisors Group ordered a STR Trend Report for
the Olympic Peninsula
^tea..
Resott propeties similar to the Pleasant Harbor
development were selected to be in the competitive set. Unforhrnately, it was
discovered that, contrry to most areas of the US, very few Olympic Peninsula
ptoperties, including Lake Crescent Lodge and Lake Quinault Lodge, repoft their
performance to STR. Consequently, \Woodmark Hotel and STillows Lodge wete
selected to round out the requfued fout property minimum, and to bdng the
propottional weight of Semiahmoo's 273 rooms under rhe 40o/o limit. As mendoned
in the individual property descriptions above, Woodmark and lWillows ate both
managed by the same compary that manages Alderbrook.
The STR Trend Report is summarized for analysis on the following page.
STR Ttend Report
3TR frcnd Rrpon (AldctraL, WoodmrrL, wlllffi, aamllhmoo, xlrllodt)
,rn F.b l,lrr Apr l,l.Y Jrn
tolt
OcaprrEy ot 46.996 63.1* 64,6* 68.3t4 70.49a e2.6qa
ADR 3114 arrS 315! tr70 $2Or t2r1
F.VPAR t82 3110 !!09 11:6 3142 tL77
tt vtnue (000's) 3862 t1,053 31,149 tl,l91 31,498 31,806
20tt
Occupancy rtl 41.0* 45.1* 5r.9* 53.5cb 51.5* 72,2*
ADR 3162 3180 3168 tL72 ir85 t202
R.yPAR t66 38: 347 t92 3113 t146
RcEiue (000's) 31,10t tI,228 J1.,454 11,486 !1,895 ,2,357
,ul Aut Slp Oct ,ld DE Tot l.
87,5qa
3246
3216
32,216
9t.596
1205
t186
33,162
85,tq{
tl84
3r 56
t2,527
45.5tt
tt92
389
tI,488
44.51r
tl7.r
37)
r1,25r
45,30A
1171
r79
31,320
65.rCb
l1t2
1126
1r9,563
73.3!6
$238
,171
s2,9r3
80.6tr
t2r7
lr91
t3,r93
71.4*
t218
t156
i2,515
57.0*
ttgz
'lr.0
3!,830
s0.4t(
r188
t95
31,529
48.6X
t18r,
t88
sr,466
St.ortb
t19l
11u
)22.e76
August 18,2015
Smith Travel Research
37
The Semiahmoo Resort was closed January - September 2073 for tenovad.ons by a
flew owfler. It depressed the aggregate competitive set occupanal for twelve months
thereafter as it ramped-up market awarefless. The fust three months of 2015, not
shown in the chart above, have posted a 3.8o/o imptovement in Occupancy, and an
8.3% improvement in Avetage Daily Rate, which combined for a 72.4oh Revenue
incease.
Rate Analysis for the Matitime Village Suites
Rates for the Maritime Village Suites, in current dollars, are proposed to match those
at Toscana of Desert Ridge Resort in Scottsdale AR, a Statesman Group
development. In the top-line Pro Fotma below, tJne 2074 Monthly Occupancy ftom
the STR Trend Report is used with the ptoposed
^vet^ge
seasonal tates.
H[hSeason
ShouldcrSaasons
low Season
75%
On*bcdroon
$2(B-3299
'tf,9-J?29$l(B - 3169
Ars-
9274
3199
3139
25%
Ilvo-bedroom !g
3299 - 3409 t3s{
3219-t319 5269
sr59.3259 t209
Blendsd
Avtr*c
SZ9,l
s216
sl56
,.n FO ll.r ADi , iLy ,un ,u! Arr9 3.P Oai fou Dac Totrb
1,348
fit3
.s.t*
ars5
r.u!
e0.6
1,062
5r.9*
srs6
tl$
2,0.06
1,2t8
6t.sCt
t2t6
nzn
1,980
1,430
72.zqo
9275
c420
2,0{6
t,500
73.3*
,275
gtl
2,U6
1,6.19
80.6%
J21S
lt85
1,980
1,414
71.4$
?2t5
sr6
1,980
9!n
50.a*
s216
r2r0
ao$
1,015
a9.6S
3rs6
$Ia
2a,o90
L,ul,
JO.09i
3229
tl2ru
st .o%
3215
r25Z
2,0.6
839
3r56
rr;u
UniB Sod
3rs6
illll ,
Ocorg.ncy% 4f.0%
ADn
noom
Rcveorre
units
AYallablc r,98o
1,059
s3.t%
Food and Bevetape Ooetadons
The Developer's projections of hidng 13.0 direct employees for the grlLy bistto are confirmed as
reasonable by the report ftom Hospitality Advisots Gtoup, atled Analsis of Emphlnent for Pleasant
Harbor Marina and Golf Resort - Pbase d dated July 77 , 2074, and authoted by Zachary Z. Zoul CHA.
Hospitality Advisots Group is a hospitality management consulting fitn specializirg i" frrll service
resort and hotel ptoperties providing services in the ateas of business and development plans,
marketing studies, asset management, and hospitality opetations.
Mr. Zoul teached the following conclusions regatding the reasonableness of the Developer's staffing
ptojections:
Food and Beverase: The food and bevetase functions consist of thtee venues as
referenced. The staffing level of 13 fiilI time positions is attributable to the Galley
Bistro. These positions include Restautant Manager, Cooks, Servets, and Battenders.
August 18,2015
38
The Galley Bistro in Phase I will have a seating capacity of 80 guests and will serve
breakfast, lunch and dinner darly. It is expected to be highly seasonal in tetms of
business levels. Because the property is on a busy highway with litde or no seryices
for travelers within a sixty-mile radius, the level of transient business is difficult to
ascertain and business ptojections do not account for this segmeflt of the market.
Staffing requirements for the veflue have been based on scheduled staff from 6 a.m.
to 10 p.m. daily. This equates to 5,850 hours. Two full time cooks will staff the
venue, which includes a Prep Cook. In order to staff the culinary requirements for a
restaurant with a capacittJ of 80, industry standards require not fewet than 11,680
hours, which equates to five full time cooks. The lounge bar will be staffed ten houts
a day with a vaiable schedule. To ptovide bartender coverage including two staff
during weekend and holiday peak periods, two full time bartender positions are
required. Serrrice standards in terms of wait staff and host duties have been based on
at
^verage
daily guest count of 40 with two tums. This is also highly variable based
on the seasofl. In order to provide service coverage at this level, five fuII time
wait/host staff positions are required
The staffing levels provided for in the development plan have been analyzed it
relation to industry benchmarks and, in particulat, those set forth in the 'Kestaurant
Industrl Operations Repofi" published by the National Restaurant Association. This
teport sets forth staffing levels for testaufants based on sales volume and menu price
point. Based on sales projections furnished by the development plan and a mid-tier
menu price point, w'e were able to ascertain and veri$, that the delineated staffing
level of not fewer than 13 firll time positions is apptopdate and consistent with
industry standards.
August 18,2015
39
3. About RIMS II Final Demand Methodology
The following matedal has been condensed ftom the RIMS II User Handbook
Inffoduction and General Comments
Effective planning for public- and pdvate-sector proiects and progtams at the State and local levels
requires a systemadc analysis of the economic impacts of these projects and progtams on affected
regions. In tum, systemadc analysis of economic impacts must account for the inter-industry
relationships within regions because these relationships largely determine how regional economies
are likely to respond to project and program changes. Thus, regional input-output (I-O) multipliers,
which account for inter-industry relationships within regions, are usefirl tools for conducting
regional economic impact analysis.
In the 1970s, the Bureau of Economic Analysis (BEA) developed a method for estimating tegional
I-O multipliers known as RIMS (X.egional Industrial 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 (X.egional Input-Output Modeling System), and published a handbook for RIMS II users.
In 7992, BEA published a second edition of the handbook in which the multipliers were based on
more recent data and improved methodology. In 7997, BEA published a third 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 afl accounting framework called an I-O table. For each industry, an I-O table
shows the industrial distribution of inputs puchased and outputs sold. A typical I-O table in RIMS
II is derived mainly ftom two data sources: BEA's national I-O table, which shows the input and
oulput structure of nearly 500 U.S. industries, and BEA's tegional economic accounts, which are
used to adjust the national I-O table to show a region's industrial structure and trading pattems.
Using RIMS II for impact analysis has sevetal advantages. RIMS II multipliers can be estimated for
any region composed of one or more coundes and for any industry, or gtoup of industdes, in the
national I-O table. The accessibility of the main data sources for RIMS II keeps the cost of
estimating tegional multipliers telatively low. Empirical tests show that estimates based on relatively
expensive surveys and RIMS Il-based estimates are similat in magnitude.
BEA's RJMS multipliers can be a cost-effective way for analysts to esdmate the economic impacts of
changes in a regional economy. However, it is important to keep in mind that, like all economic
impact models, RIMS provides approximate order-of-magnitude estimates of impacts. RIMS
multipliers are best suited for estimating the impacts of small changes on a regional economy. For
some applicadons, users may v/ant to supplement RIMS estimates with information they gather
ftom the tegion undergoing the potential change. To use the multipliets for impact analysis
effectively, users must provide geographically and industrially detaiied information on the initial
changes in output, earnings, or emplopnent that are associated with the project or progtam under
study. The multipliers can then be used to estimate the total impact of the project or ptogram on
regional ouq)ut, earnings, and employmeflt.
August 18,2015
40
RIMS II is widely used in both the public and private sector. In the public sector, for example, the
Departrnent of Defense uses RIMS II to estimate the regional impacts of military base closings.
State transportation deparrnents use RIMS II to estimate the regional impacts of airport
construction and expansion. In the private-sector, analysts and consultaflts use RIMS II to estimate
the regional impacts of a vanety of projects, such as the development of shopping malls and sports
stadiums.
RIMS II Methodology
RIMS II uses BEA's benchmark and annual l-O tables for the nalion. Since a particular region may
not contain all the industries found at the national level, some ditect input requirements canflot be
supplied by that reg'ion's industries. Input requfuements that are not produced in a study region are
identified using BEA's tegional economic accounts.
The RIMS II method for estimating regional I-O multipliets can be viewed as a three-step process.
In the fust step, the producet portion of the national I-O table is made region-specific by using six-
.ligrt NAICS location quotients Gar. The LQs estimate the extent to which input requirements are
supplied by firms withifl the region. RIMS II uses LQs based on two types of data: BEArs personal
income data (by place of residence) are 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-service industries.
In the second step, the household row and the household column ftom the national I-O table are
made region-specific. The household row coefficients, which are derived from the value-added row
of the national I-O table, are adjusted to reflect tegional earnings leakages resulting from individuals
working in the region but residing outside the region. The household column coefficients, which are
based on the petsonal consumpdon expenditure column of the national I-O table, are adjusted to
account for regional consumpdon leakages stemming from personal taxes and savings. In the last
step, the Leontief inversion approach is used to estimate multipliers. This inversion approach
produces output, eamings, and employment multipliers, which can be used to ftace the impacts of
changes in final demand on and indirectly affected indusuies.
Accumcy of RIMS II
Empirical evidence suggests that RIMS II commonly yields multipliers that arc not substantially
diffetent in magnitude ftom those generated by regional I-O models based on relatively expensive
surveys. Fot example, a comparison of.224 industry-specific multipliers ftom survey-based tables for
Texas, r0Tashington, and West Vitginia indicates that the RIMS II avetage multipliers overestimate
the average multipliets ftom the survey-based tables by approximately 5 percent. For the majority of
individual industry-specific multipliers within these states, the difference between RIMS II and
survey-based multipliers is less than 10 percent. In addition, RIMS II and survey multipliers show
statis tically similar distributions o f 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 multipliets without conducting relatively expensive suryeys.
Second, the level of industrial detail used in RIMS II helps avoid aggtegation effors, which often
occur when industries are combined. Third, RIMS II multipliers can be compared across areas
because they are based on a consistent set of estimating procedues nationwide. Fourth, RIMS II
4l
August 18,2015
multipliers are updated to reflect the most recerit loca.l-area wage-and-salxy atd petsonal income
data.
Overyiew of Diffetent Multiplierc
RIMS II provides users with five types of multipliers: final demand multipliets fot output, fot
earnings, and for employment; and direct-effect multipliets for eamings and for employment. These
multipliers measure the economic impact of a change in final demand, in eamings, ot in employment
on a region's economy.
The final demand multipliers for output are the basic multipliers ftom which all other RIMS II
multipliers are derived. In this table, each column entry indicates the change in output in each row
industry that results from a $1 change in final demand in the column industry. The impact on each
row industry is calculated by multiplying the final demand change in the column industry by the
multiplier for each row. The total impact on regional ouq)ut is calculated by muttiplyrng the final
demand change in the column industry by the sum of all the multipliers for each row except the
household tow.
RIMS II ptovides two qrpes of multipliers for estimating the impacts of changes on earrrings: final
demand multipliers and dfuect effect multipliers. These multipliers are derived from the table of
final demand output multipliers.
The final demand multipliers for earnings can be used if data on final demand changes are available.
In the final demand earnings multiplier table, each column entty 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 multiptying the final demand change in the column industry by
the multipliers for each row. The total impact on tegional earnings is calculated by multiplying the
final demand change in the column industry by the sum of the multipliets fot each tow.
Employment Multiplierc
RIMS II provides two types of multipliers for estimating the impacts of changes ofl employment:
final demand multipliers and direct effect multipliets. These multipliers ate dedved ftom the table
of final demand output multipliers.
The final demand multipliers fot employment can be used if the data on final demand changes are
available. In the final demand employment multiplier table, each column entry indicates the change
in employment in each row industry that results from a $1 million change in final demand in the
column industry. The impact on each row industry is calculated by multiplying the final demand
change in the colurnn industry by the multiplier for each tow. The total impact on regional
employment is calculated by multiplyiog th. final demand change in the column industry by the sum
of the multipliers for each row.
The ditect effect multipliers for employment can be used if the data on the initial changes in
employment by industry are available. In the direct effect employment multiplier table, each entry
indicates the total change in employment in the region that results from a change of one job in the
row industry. The total impact on regional emploi.rrnent is calculated by multiplying the initial
change in employment in the row industry by the multiplier for the row.
42
August 18,2015
Choosing a Multiplier
The choice of multiplier for estimating the impact of a ptoject on oulput, earnings, and employment
depends on the availability of estimates of the initial changes in final demand, earnings, and
employment. If the estimates of the initial changes in all three measures are available, the zuMS II
user can select any of the BJMS II muitipliers. In theory, all the impact estimates should be
consistent. If the available estimates are limited to initial changes in final demand, the user can select
a frnal demand multiplier for impact estimation. If the available estimates are limited to initial
changes in eamings or employment, the user can select a direct effect multiplier.
The EB-5 regulations ptovide that "jobs cteated inditecdy" by a tegional center- affrhated business
may be credited to foreign investors who made a quali$ring investment in the business. To show
this job creadon, "reasonable" methodologies may be used. 8 CFRS204.6(-X7). The RIMS II
input/output model has been recognized by the USCIS as an acceptable methodology fot showing
job creation resulting from a regional ceflter- affiliated investrnent project.
August 18,2015
43