Capital Region Transportation Planning Agency Regional Mobility Plan
Guiding Metropolitan Growth through Development Economics
Jan 04, 2016
Guiding Metropolitan Growth through Development Economics November 2009 Dialogue Primer Session Bruce W. Landis, P.E., AICP Vice President Sprinkle Consulting, Inc. Guiding Metropolitan Growth through Development Economics. Development Decision Economics - PowerPoint PPT Presentation
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Capital Region Transportation Planning Agency
Regional Mobility Plan
Capital Region Transportation Planning Agency
Regional Mobility Plan
Guiding Metropolitan Growth through Development Economics
November 2009 Dialogue Primer Session
Bruce W. Landis, P.E., AICPVice President
Sprinkle Consulting, Inc.
Guiding Metropolitan Growth Guiding Metropolitan Growth throughthrough Development EconomicsDevelopment Economics
• Development Decision Economics
• Influence through transportation system
policy and community investment
• Shape (internally) Development
Regional Economic / Development “Engines”
Regional Development “Engines”
50,000 students & employees50,000 students & employees
50,000 50,000 ++ employees employees
15,000 students & employees15,000 students & employees
15,000 students & 15,000 students & employeesemployees
Land Development Growth “Pioneers”
Land Development Growth “Roof-top Followers”
Key to Directing Growth…
InfluenceInfluence the Development Economics
Graphic from K2 Urban Corp
You can affect Development Location Decisions…
Graphic from K2 Urban Corp
To Direct Market Forces…
• Understand Their Basis
• Offer Effective Incentives…
• Educate the Market’s Agents
Supply
DemandPric
e
Quantity
Land Development ProForma (50 SFDU)
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 400,000Interest Carry (5yrs) $ 1,200,000
Subtotal $ 9,300,000
Potential Margin / ROI $ 1,950,000 (20%)
(Off-site infrastructure)
(Off-site infrastructure)
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 400,000Interest Carry (5yrs) $ 1,200,000
Subtotal $ 9,300,000
Potential Margin / ROI $ 1,950,000 (20%)
Here is what you can influence…
17%
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 400,000Interest Carry (5yrs) $ 1,200,000
Subtotal $ 9,300,000
Potential Margin / ROI $ 1,950,000 (20%)
Reduce Interest Carry…
(Off-site infrastructure)
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 400,000Interest Carry (44yrs) $ 900,000
Subtotal $ 9,000,000
Potential Margin / ROI $ 2,250,000 (25%)
Reduce Interest Carry…
Build There!!!
(Off-site infrastructure)
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 400,000Interest Carry (5yrs) $ 1,200,000
Subtotal $ 9,300,000
Potential Margin / ROI $ 1,950,000 (20%)
Here is what you can influence….
(Off-site infrastructure)
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 40,000Interest Carry (5yrs) $ 1,200,000
Subtotal $ 8,940,000
Potential Margin / ROI $ 2,310,000 (26%)
Build There!!!
Here is what you’ve helped….
(Off-site infrastructure)
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 40,000Interest Carry (4yrs) $ 900,000
Subtotal $ 8,640,000
Potential Margin / ROI $ 2,610,000 (30%)
Direct Incentives…
Build There!!!
(Off-site infrastructure)
To Direct Market Forces…
Supply
DemandPric
e
Quantity
Supply
Demand
Pric
e
Quantity
Raw Land Market…
New Raw Land Price
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 40,000Interest Carry (4yrs) $ 900,000
Subtotal $ 9,300,000
Potential Margin / ROI $ 1,950,00 (20%)
No Net Incentive
(Off-site infrastructure)
$2,460,000
“Business-as-usual”
“Compact Development”
Land Consumption
SCENARIO 1 SCENARIO 3
Acres Consumed Acres Consumed
Single Family 28.85 14.99
Multi-Family 19.33 13.21
Commercial 63.72 49.74
TOTAL DEVELOPMENT 111.90 77.94
Land Use
(111.9 – 77.94) / 111.9 = 30%
“Business-as-usual” “Compact Development”
Georgia Coastal Comprehensive Plan
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 2,460,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 40,000Interest Carry (4yrs) $ 900,000
Subtotal $ 8,640,000
Potential Margin / ROI $ 2,610,000 (30%)
Build There!!!
(Off-site infrastructure)
$1,800,000
Parcel Assemblage v. Simple Purchase
I know there is a marketneed for my product,where should I buy
the land?
Parcel Assemblage v. Simple Purchase
Lemme see, should Itry to deal with 12 sellers
and their attorneys, orjust Farmer Brown?
Long-term Maintenance Commitment
Education…………………..Public Safety..…………….Roads……………………….Wastewater………………..
Fire/Rescue; Water; Parks; Solid Waste..........
40% 8%30%11%
11%
Public Service Percent of Avg. Annual Cost
Source: Duncan and Associates. The Search for Efficient Urban Growth Patterns: A Study of Fiscal Impacts of Florida Development. Governor’s Task Force on Urban Growth Patterns and DCA. Tallahassee FL, 1989.
Long-term Maintenance Commitment
Education…………………..Public Safety..…………….Roads……………………….Wastewater………………..
Fire/Rescue; Water; Parks; Solid Waste..........
40% 8%30%11%
11%
Public Service Percent of Avg. Annual Cost
Source: Duncan and Associates. The Search for Efficient Urban Growth Patterns: A Study of Fiscal Impacts of Florida Development. Governor’s Task Force on Urban Growth Patterns and DCA. Tallahassee FL, 1989.
Impacts on Traffic Activity
Form / Location
Compact / Infill
Contiguous / USA fringe
Scattered / Linear
Avg. Traffic Trip Length
Duncan’89 FDOT (335.067, F.S.) Weighted Avg.
6.8 mi 4.9mi 5.4mi
6.4mi 9.6mi 8.8mi
8.3mi 12.1mi 11.2mi
100 lot subdivision
Traffic Generation
Data Source: Institute of Transportation Engineers Trip Generation, 7th Edition.
Vehicle Miles Traveled (VMT)
Streets & Roadways Maintenance
Data Sources: City of Tallahassee Annual Budget, Leon County Annual Budget, Leon County CIP, FDOT Historical Work Program, and FDOT Countywide VMT Estimate
* Excluding I-10 Costs and Traffic
Costs of Development Locations
(P/A, 3%, 35)
Land Development ProForma
Revenue (Sales) $11,250,000CostsLand Acquisition $ 1,800,000Site Infrastructure $ 900,000Product Cost (COGS) $ 5,000,000Transportation $ 400,000Interest Carry (5yrs) $ 1,200,000
Subtotal $ 9,300,000
Potential Margin / ROI $ 1,950,000 (20%)
(Off-site infrastructure)
Proforma Category Influence / Action
Revenue (Sales)…….
Costs
Land Acquisition……
Site Infrastructure……
Product Cost (COGS)
Transportation……
Interest Carry……….
Guiding Growth through Development Economics
Public Investment - Community Fabric; Public Transit; Active Transportation; Streetscapes; Public Education; etc.
Density / Property Yield
n/a
n/a
Incentives/Disincentives
Streamline Permitting
Regional Growth Influence Areas
Source: TruliaTM Real Estate Search
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