Attachment 5.1 and 5.2
ECONOMIC FEASIBILITY STUDY
ATTACHMENT 5.1
Public Improvements within the Revenue Allocation Area
This Attachment includes a statement listing the kind, number, and proposed location of
all proposed public works or improvements proposed to be installed within the Project
Area, together with the estimated costs of such improvements pursuant to Idaho Code
§ 50-2905. This Attachment also sets forth a finding as to the economic feasibility of
the proposed Project recognizing the specific assumptions used in the modeling,
including a description of the methods of financing the estimated project costs, the
timing of development and cash flow analysis. As more fully set forth in the Plan, the
proposed Project to be funded by revenue allocation funds includes fully improved
streets, utilities, and other public rights-of-way amenities, as well as park and open
spaces, a community center and associated public parking facilities and/or structures.
The Meridian Development Corporation (“MDC”) Public Improvement List set forth
below identifies with specificity needed investments to support private investment in
capital facilities. Capital facilities generally have long useful lives and significant costs.
The overall Project and the infrastructure to support it are all consistent with the vision
articulated in the City of Meridian Comprehensive Plan and as required in City
development regulations. The cost estimates provided by architects and consulting
engineers are based upon prices for similar construction in the broader area for 2020
and have not been adjusted for inflation.
Estimated costs proposed to be incurred in implementing the Plan are as follows:
Public Improvement List
Proposed Public Infrastructure, Including Engineering, Design, Installation,
Construction, and/or Reconstruction of:
rd
Improvements to 3 Street
Improvements to Broadway Avenue
Intersection Improvements and Rail Crossing Safety Enhancements
Pedestrian Improvements
Streetscape Improvements
Sewer Infrastructure Improvements
Water Infrastructure Improvements
Electrical Distribution Improvements
Right-of-Way Landscaping Improvements
Utility Relocations
Lateral Relocation and Improvements
Attachment 5 - 1
Irrigation and Drainage Improvements
Sub-total $1,215,000
Additional Public Parking Facilities and Open Space $1,510,000
Civic Block Improvements
Civic Block Site Improvements $1,615,000
Structured Public Parking $4,250,000
Sub-Total $5,865,000
Community Center Construction $6,450,000
City of Meridian Community Center Contribution ($3,000,000)
Net Project Area Cost Construction $3,450,000
1
Total Civic Block and Structure Parking Cost $12,315,000
Grand Total $12,040,000
It is understood the estimated costs detailed above will change over the life of the Plan
due to inflation, further project refinement, timing and bidding. The cost estimates are
a necessary assumption in determining economic feasibility and are estimates for the
purpose of financial planning.
Based on the assumptions made in the Study, the Project Area is estimated to generate
$16,286,437 in tax increment/revenue allocation proceeds between 2020 and 2040.
Initial urban renewal planning costs are estimated to be funded by a $75,000 interfund
loan from MDC. Additionally, the Study assumes a $3,000,000 contribution from the
City to support the construction of the proposed community center. The City's
anticipated contribution is from Parks and Recreation impact fees that have been
collected for a community center. At this time the City has not obligated any funds from
impact fees or the general fund for the proposed community center. The estimated total
resources for the Project are estimated to be $19,361,437.
As identified above, there are presently $12,040,000 of estimated total Project Costs
related to the Project after the City of Meridian’s contribution. The feasibility analysis
assumes Projects will be implemented and advance-funded by property owners and/or
1
Includes City Community Center Contribution.
Attachment 5 - 2
developers. For purposes of Idaho Code § 50-2905 and the Study, it is assumed that any
owner or developer participant in the Project will be reimbursed with tax
increment/revenue allocation proceeds through an owner participation agreement
(OPA) negotiated by and between MDC and any owner and/or developer participant.
Based on information from MDC staff, MDC currently administers OPAs in existing
project areas utilizing 75% or 90% reimbursement to the owner or developer participant
from tax increment/revenue allocation proceeds. In analyzing the economic feasibility
of the proposed Project, an assumption of a 75/25 split is used recognizing the actual
split will be subject to any negotiated OPA.
For purposes of determining economic feasibility of the Project, administrative costs
(District Operating Expenses) over the 20-year life of the Project Area are estimated to
be $968,105 or approximately 6% of total estimated revenue. This amount was
calculated using the assumption of 10% of annual tax increment/revenue allocation
proceeds for administration of the Project Area or $50,000 per year. The actual amount
of administrative costs will be set forth and determined in the MDC’s annual budget;
however, for purposes of economic feasibility an estimate of costs is necessary. The
initial interfund loan from MDC for preliminary Project Area costs is estimated in the
Study to be repaid at 5% simple interest for a total obligation of $112,500.
Considering the estimated revenue allocation proceeds over the life of the Project Area
less the estimated Project costs, there is estimated to be a $100,000 positive balance of
at the end of the 20-year term, rendering the Project economically feasible.
Attachments 5.3 and 5.4 provide detailed information concerning revenue estimates
and cash flow analysis.
In analyzing the methods of financing, secure funding includes revenue allocation funds
and is money the MDC is highly likely to receive should private development occur
within the Project Area. The funds may not be in the MDC’s possession at the beginning
of the Plan period, but it is virtually certain MDC will receive the funds should private
development proceed as proposed. MDC may need to take specific actions to generate
the funding, but those actions are within its powers. Despite the high probability of
secure funding, no Project can proceed until a specific, enforceable funding plan is in
place.
Potential funding is money that might be received by the MDC over the life of the
Project Area. It is funding the MDC is eligible for and exists under current law; however,
each potential funding source requires one or more additional steps or decisions before
the MDC can obtain the resources, and the ultimate decision is outside of the MDC’s
independent control. The proposed City capital contribution to the community center
and grant funds are examples of potential funding. Additionally, the issuance of bonds
is not anticipated in this analysis. Potential funding is not assumed in determining
economic feasibility.
Attachment 5 - 3
Unfunded Projects, or portions of Projects are those lacking secure or potential funding.
Unfunded Projects are not considered or assumed in determining economic feasibility.
It is generally understood, the amount of tax increment/revenue allocation contributed
to the Project will vary from the assumptions and estimates used in the economic
feasibility study depending upon actual revenue and the actual cost of the Projects.
Other sources of funding for Projects may include, but are not limited to:
Local Improvement Districts (LID)
Business Improvement Districts (BID)
Development Impact Fees
Franchise Fees
Grants from federal, state, local, regional agencies and/or private entities
Other bonds, notes and/or loans
Summary of Estimated Cost of Operations and Improvements by Year Based on
Assumptions (2020-2041)
Year Secure Funding PotentiDistrict MDC Loan OPA Debt Total Project
(TIF al Operating Debt Service Service (75%) Liabilities
& FundinExpenses @ 2.65%
MDC Loan) g
2020 $75,000 $0 $25,000 $0 $25,000
2021 $0 $0 $25,000 $0 $25,000
2022 $0 $0 $25,000 $0 $25,000
2023 $447,366 $0 $44,737 $40,000 $335,525 $420,261
2024 $456,578 $0 $48,368 $45,000 $342,434 $435,802
2025 $823,409, $0 $50,000 $27,500 $617,557 $695,057
2026 $840,141 $0 $50,000 $0 $630,106 $680,106
2027 $857,207 $0 $50,000 $0 $643,475 $693,475
2028 $874,615 $0 $50,000 $0 $824,615 $874,615
2029 $892,371 $0 $50,000 $0 $842,371 $892,371
2030 $910,482 $0 $50,000 $0 $860,482 $910,482
2031 $928,955 $0 $50,000 $0 $878,955 $928,955
2032 $947,797 $0 $50,000 $0 $897,797 $947,797
2033 $967,016 $0 $50,000 $0 $917,016 $967,016
2034 $986,619 $0 $50,000 $0 $936,619 $986,619
2035 $1,006,614 $0 $50,000 $0 $956,615 $1,006,615
2036 $1,027,008 $0 $50,000 $0 $977,008 $1,027,008
2037 $1,047,811 $0 $50,000 $0 $997,811 $1,047,811
2038 $1,069,029 $0 $50,000 $0 $1,019,029 $1,069,029
2039 $1,090,672 $0 $50,000 $0 $1,040,672 $1,090,672
2040 $1,112,747 $0 $50,000 $0 $1,462,746 $1,512,746
2041 $0 $0 0 $0 $0
Total $16,361,437 $0 $968,105 $112,500 $15,180,833 $16,261,437
Attachment 5 - 4
ATTACHMENT 5.2
Determination of Economic Feasibility Based on Assumptions
Based upon reasonable assumptions and recognizing MDC’s ability to prioritize Projects
in its budget and negotiate the terms of any owner participation agreement with an
owner and/or developer, the Plan is deemed to be economically feasible as the
estimated revenue in the Project Area exceeds the estimated Project costs.
The economic feasibility of the Plan is based, in part, on the following factors:
The value of new taxable private development proposed in the Project Area
The timing of the proposed taxable development
The nature of the propose taxable development
The amount of tax increment/revenue allocation proceeds to be generated by
proposed development
The estimated cost of public improvement projects in 2020 dollars
That the Projects are assumed to be advance funded by any owner or developer
in the Project Area to be reimbursed with tax increment/revenue allocation
proceeds over time pursuant to negotiated owner participation agreements.
If estimated revenue projections equal or exceed estimated project costs, the
Plan is deemed to be economically feasible.
The following is a summary of the analysis and estimates of the factors used to
determine the economic feasibility of the MDC Union District Urban Renewal Plan.
Attachments 5.3 and 5.4 provide a more detailed outlook on the revenues and expenses
in determining economic feasibility.
The following assumptions were used in Attachments 5.3 and 5.4 to support of finding
the Project meets the requirements of economic feasibility:
o Land Value Increases @ 1% / Yr.
o Improvement Value Increases @ 2% / Yr.
o Applicable Levy Rate is reduced from the 2019 certified applicable levy
rates by an estimated 10% and held constant through the life of the Plan
and Project Area. The Applicable Levy Rate does not include any
exempted levies as identified in Idaho Code § 50-2908
o Total estimated Cost of Improvements over the life of the project:
$12,040,000, after the City of Meridian’s contribution to the community
center in the amount of $3,000,000
o Attachment 5.4 assumes 75% of the annual available tax
increment/revenue allocation will be committed to reimburse an owner
Attachment 5 - 5
or developer for advance-funded public improvements. It is understood
and recognized the actual reimbursement percentage is a term to be
negotiated under any OPA
o Attachment 5.4 provides for “Additional Principal” payments to any
owner or developer if sufficient funds are available and provided for in
any OPA
In summary, based on the assumptions as set forth in Attachments 5.1 and 5.2, and as
supported by Attachments 5.3 and 5.4, it is evident the Project will generate adequate
revenue within the Project Area to fund the necessary Projects rendering the Project
economically feasible.
4852-5500-2807, v. 7
Attachment 5 - 6