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AUGUST 2013

Vantage Economics

An Analysis Of The Fiscal Impacts For Proposed Opal Gateway Project


Presented By Vantage Economics August 2013 Revised from original publication dated June 2012 and revision of February 2013

OPAL GATEWAY ESTIMATESD FISCAL IMPACTS AUGUST 2013 Overview: Consideration and research is currently underway regarding the Opal Gateway development project, a proposed commercial development of mixed uses within Opal in Fauquier County Virginia. As a part of this process Vantage Economics was employed to estimate the overall fiscal impacts this project would have on Fauquier County. The data and analysis in this report have been revised from the original report submitted in June 2012 and its subsequent revision of February 2013. Table 1 below outlines the anticipated commercial usage (herein defined as Opal Gateway):

TABLE 1

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Summary The fiscal impact results contained herein are under the assumptions of full project build-out and reflect the current (2013) tax structure. The primary generator of economic activity within the Opal Gateway project is likely to be the planned pediatric rehabilitation facility. This facility is expected to be one of just a few in the nation and is located within a major metropolitan statistical area (MSA). It is anticipated to generate nearly 90 jobs, many of which will be physicians or nurses. Our estimates were somewhat conservative, basing revenues on 300 patients per week, since although the facility will be located within a major MSA it will be located on its more rural edge. However, the plan to incorporate long-term rehabilitation for children who will be able to stay with their parents either at the accompanying hotel or R.V. Park, in addition to the fact that the closest similar center is in Baltimore, MD (with over 2,500 outpatient visits per week), should certainly boost revenues. It is also possible that the real and personal commercial property taxes on the center will be much higher than is estimated here given its highly specialized equipment. Overall such conservative retail, restaurant, and industrial estimates have to be considered against the economic backdrop of the Opal area, with the majority of businesses being considered here for development being very good matches for an area driven largely by transportation services. We would point to the high traffic volume natural to Highway 17/29, which is expected to only continue growing, particularly given the expected increases to traffic flows as a result of higher shipping demand brought by increased shipping to ports on Virginias coast. Table 2 below provides an overview of the estimated sales per planned commercial category. The details for the derivation of gross sales estimates were based on exhaustive research from a variety of reliable sources, including sales data from Fauquier County, company 10-K filings and private annual reports, and internal research and documentation. Although these details are considered proprietary and not contained within this report they are available upon request.

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TABLE 2

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Table 3 below provides a breakout of estimated tax revenues. Based on our research and assumptions we estimate the total annually recurring tax revenues at full build-out of Opal Gateway as currently proposed under the current tax structure to Fauquier County to be $715,491. Table 4 below shows our estimates for the net fiscal benefit to Fauquier County attributable to the Opal Gateway. This is based on the aforementioned recurring revenues as well as an estimated annually recurring fiscal cost of approximately $36,178. Our cost estimate is derived by calculating the net marginal increase in annual fiscal costs for Fauquier County using the proposed 2012 budget. We estimate that Opal Gateway will generate approximately 313 jobs directly at full build-out. Based on our research and assumptions we estimate Opal Gateway will provide Fauquier County with a net annually recurring fiscal benefit at full build-out of $679,313. Any changes to either the type of commercial usage or square footage or both would need to be re-evaluated for their full potential fiscal impact. The details for the derivation of gross sales estimates were based on exhaustive research from a variety of reliable sources; although these details are considered proprietary and not contained within this report they are available upon request.

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TABLE 3

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TABLE 4

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