city land based customized incentive proposal city centrum 1-2011 economic development office city...
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City Land Based Customized Incentive Proposal
City Centrum 1-2011
Economic Development OfficeCity of Cape Coral, Florida
March 21, 2011
Proposed Project• Construction of a two (2) story professional office building
– Corporate Headquarters• Full Service Advertising Agency in high growth
• 20,000 square foot building• Quality design and look
• 54 employees immediately• Growth to 104 employees within 3 Years• $56,000 median wage ($20,000 more than average)
• $12 million annual sales, all revenue from outside area; 60% of this revenue spent locally
• In competition with other entities for project
Proposal• Grant free land in project area (owned by city) of
three (3) acres +/- ½ acre from 10 acre site
• Estimated current market value $300,000• Current tax received is $ 0. (owned by city)
• Performance based – tie city incentives to construction and delivery of promised jobs
• Note: Lee County to offer $250,000 for job creation as additional incentive
Economic Impact
Job creation value:
• 104 jobs at $56,000 = $5,824,000 annually
• Assuming 15% disposable income = $873,600 annually
• 54 Immediate – 50 Created 2012 – 2014
Economic Impact ContinuedAd Valorem Taxes:
• $2,000,000 construction cost
• 300,000 land value
• $2,300,000 Total
• City taxes received = $18,331 annually
Economic Impact Continued
• Payroll $5,824,000• Taxes 18,331
• Total: $5,842,331 annually
• *Over ten years, $58,423,310
• ** One time additional $100,000 impact fees expected
Return on Investment
(ROI)• One year ROI: $ 5,842,331/• City Investment: $300,000• Return on Investment: 19.5 to 1
• Ten year ROI: $58,423,310/• City Investment $300,000• Return on Investment: 194.7 to 1
• Years to payback land-taxes only -- $300,000/$18,331 = 16.4 years
Summary
• Meets Council request for target industries• Acts as quality “anchor tenant” for 10 acres across street
from City Hall• Fits City Centrum Use and Vision• Will act as catalyst for others in complex• Provide high paying professional jobs• Places property back on tax roles• No “out of pocket” by City• Annual Economic Impact $5,842,331• Additional $100,000 in one time impact fees expected• Proposed incentive Performance-Based – need
construction of the building and promised jobs