HomeMy WebLinkAboutWS Item 01 - Main Street Fire Protection ProgramCV K .0 1(
MEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: BRUNO RUMBELOW, CITY MANAGER ��
MEETING
DATE: OCTOBER 16, 2007
SUBJECT: WORKSHOP — MAIN STREET FIRE PROTECTION PROGRAM
Staff will brief the City Council on options available to the City to reach full participation in
the Fire Protection Program by the property owners in the 300 and 400 blocks of South
Main Street.
O:\agenda\10-16-05\Workshop —Main Street Fire Protection
Main Street Fire Protection Project
Staff began developing a program for providing fire protection to the Historic
Main Street District in 2006.
Included onsite inspections and meetings with City of Plano staff to discuss their
program.
Project Description
Provide Fire Protection thru the use of a sprinkler system for the 300 and 400
blocks of South Main Street, the Downtown Main Street Historic Corridor. Public
project included:
• Tap & Service Line to Building
• Riser and associated controls
• Branch Line thru individual buildings
• Individual Control Valves
Private project included:
• Sprinkler Grid System for each individual building
Project Cost
• Public $ 1.1 Million
• Private $ 600,000
Initial Funding Program
Initial proposal to owners was the City fund the Public Costs and Finance the
Private Costs for the owners over 20 years at 4.5%
Owner Support
Staff Met Individually with the Property Owners
• 22 Support
• 6 Oppose
• 2 Refused to Meet
Project Under Design with Construction Planned — January 2008
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Main Street Fire Protection Project
Property Owners Support - Status
Owner
Business
Address
Cost
Supports
YES
Glenda Fisher
Main St Bakery
316 S Main
$14,037.84
Yes
Sam Messina
Shoe Repair
320 S Main
$7,420.00
Yes
Shamim Mohsin
Into the Glass
322 S Main
$4,400.00
Yes
Off the Vine
324 S Main
$5,030.00
Grapevine Publishing Co
Grapevine Sun
332 S Main
$7,905.00
Yes
Chuck & Sally Bultmann
Pueblo Connection
334 S Main
$16,510.00
Yes
Robert K Eason
Holy Grounds
336 S Main
$7,405.00
Yes
Tom Chandler
Eye Health
338 S Main
$9,220.00
Yes
Neva Byrd
Sprint Store
340 S Main
$6,355.00
Yes
Gregory Investments
Chix Boutique
342 S Main
$41,263.20
Yes
817-909-4061 Kay Gregory
Billy Lannon
Pandamonium
317 S Main
$27,810.00
Yes
Charles W Wood
Main Street Station
337 S Main
$17,600.00
Yes
Don Mahan
The Corner Store
401 S Main
$22,836.00
Yes
GV Masonic Lode
401 S Main
$29,565.00
Sons Enterprises
D'vine Wine
409 S Main
$12,710.00
Yes
SIR Investments
Good Things for All Seasons
415 S Main
$9,690.00
Yes
Michael & Deborah Meek
Bermuda Gold
404 S Main
$11,771.90
Yes
All About Me Boutique
404 S Main
$9,004.80
Yes
Horace N Gilliam
Auntie's Beads Store
406 S Main
$10,215.00
Yes
Lance & Laura Gilliam
Ooh La La!
408 S Main
$12,575.00
Yes
Farina's Winery
420 S Main
$9,900.00
Yes
Sons Enterprises
Blue Moon Gallery
412 S Main
$8,000.00
Yes
2nd Story Office
412 S Main
$6,725.18
Yes
Burl Gilliam
Big Fish / Half Shells
414 S Main
$19,215.00
Yes
The Ma is Pen
422 S Main
$10,885.00
Yes
Maison Jolie
424 S Main
$11,515.00
Yes
Simply Celebrations
426 S Main
$9,375.00
Yes
JT Lacrosse
Antique Revival
418 S Main
$10,530.00
Yes
Wanda Shaw Janet Dickey
City Florist
430 S Main
$18,905.00
Yes
Phil Parker
Willhoite's
1432 S Main
$43,075.00
Yes
Total
I
1
1 $431,448.92
o:\stan\main st\Fire Protection\Owners Yes -No List
Main Street Fire Protection Project
Property Owners Support - Status
Owner
Business
Address
Cost
Supports
NO
Randy Buffington
Tile & Carpet
312S Main
$14,600.00
No
Buster's Beads Store
314 S Main
$8,180.00
Bob England
Main St Bakery
318S Main
$15,721.50
No
James & Rose Thurman
Let's Pretend / Willow Gallery
326S Main
$11,290.00
No
John Hod kiss
Mer 's Christmas & Clowns
309S Main
$15,730.00
No
Na oli's Caf6
309S Main
$14,535.00
James & Rose Thurman
Miscellaneous
405 S Main
$14,535.00
No
Carl & Francis Wiggins
Grapevine Doll Shop
411 S Main
$13,970.00
No
Ashlins Ltd.
413 S Main
$9,320.00
Mdt Main Street LP
Puzzlements
417 S Main
$11,674.80
No
Design and Grace
419 S Main
$3,836.00
No
Biker Alley
421 S Main
$5,564.00
No
Total No
Tolbert's Restaurant
423 S Main
$16,000.54
$154,956.84
No
UNDECIDED
Larry Cra o
Odd Fellows
330 S Main
$11,200.00
Paloma Boutique
330 S Main
$12,080.00
William Shoe
Tolbert's Trading Co
311 S Main
$8,940.00
Total Undecided
$32,220.00
Private Cost Total
$618,625.76
o:\stan\main st\Fire Protection\Owners Yes -No List
,.,MainStreet Fire Protection Project
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October '2007
City of Grapevine, Texas
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TXP, Inc.
1310 South 1st Street; Suite 105
Austin, Texas 78704
(512) 328-8300 phone
(512) 462-1240 fax
www.txp.com
TXP was retained by the City of Grapevine (Grapevine) to assist in estimating the
economic and tax revenue impact of business activity in Downtown Grapevine.
Beyond the general results, Grapevine was especially interested in what percent of
economic activity and tax revenues are attributable to out-of-town visitors. TXP
performed five basic tasks: 1) developed an estimate of sales per square foot for
downtown tenants, 2) collected appraisal data on real and business personal property
in the study area, 3) determined the percent of visitor spending in the study area, 4)
calculated the economic impact of Downtown business activity, and 5) projected the
ten-year net present value of sales tax attributable to these visitors as well as overall
property tax revenue.
As discussed in previous reports, tourism is big business for the City of Grapevine. A
number of planned hotel projects such as the Great Wolf Lodge and Gaylord Texan
expansion should further enhance this important economic sector. As an economic
development cluster, Grapevine's tourism sector is unusually concentrated for a
community of its size. The city accounted for nearly 18 percent of the total room
nights available in Tarrant County during the 1 st quarter of 2007, but Grapevine
hotels captured roughly 21 percent of room nights sold. As a point of reference,
Grapevine ranked 7th statewide for total room receipts collected over the past four
quarters.
Grapevine Mills is also an important draw for non -local regional spending. There is
over 1.6 million square feet of shopping, entertainment and restaurants at Grapevine
Mills. Having such as large shopping facility (over 180 stores) as well as other stores
allows Grapevine to generate a tremendous amount of sales tax revenue — a much
larger amount of sales tax revenue than the city should normally capture based on
population and demographic characteristics.
Even with these major tourism assets, there is not a precise methodology that can
perfectly determine the amount of Grapevine visitor spending. TXP used two different
approaches to calculate this value. First, a review of total taxable retail sales per
capita reveals Grapevine generates 3.3 times the state average per capita. This
implies approximately 70 percent of sales tax generated from retail sales is
attributable to non -local spending.
Table 1: Taxable Retail Sales Per Capita
Taxable Retail Sales 2006 Population Sales Tax Per Capita
Grapevine $994,423,103 48,583 $20,469
Texas $143,462,591,980 23,507,783 $6,103
"s - Estimated Economic& Tax Impact of Downtown Grapevine Business Activity I October 2007
Source: TXP, Texas Comptroller of Public Accounts
The second approach TXP used to determine the percentage of out-of-town visitor
spending relied on the nature of tax incidence. In simple terms, incidence analysis
attempts to identify who bears the ultimate burden of a given tax. Since businesses
pass on tax costs to the consumer, it is useful to review sales and use tax as percent
of income. By combining the data in the table below and TXP estimates of Grapevine
household income, this approach validates that approximately 70 percent of retail
spending is non -local.
Using a list of addresses provided by Grapevine, TXP collected appraisal data from
the Tarrant Appraisal District. Since many downtown businesses rent their space, it
was difficult to obtain accurate information on every business. For example, it was
possible to obtain real property data for an address, but the corresponding business
personal property could not be found. While not exact, the following table provides an
acceptable estimate of the appraisal value of downtown businesses. A property
appreciation rate of 3 percent was used to adjust the total appraised property values.
TXP used the 2007 Grapevine property tax rate of $0.362500 per $100 valuation.
Table 2: Aggregate Appraised Value of Downtown Grapevine
source: I exas comptroller of Public Accounts
To estimate retail sales per square foot (Table 3), TXP incorporated data from the
Urban Land Institute Dollars & Cents of Shopping Centers 2006, National Restaurant
Industry Association Restaurant Industry Operations Report 2006/2007, and insights
gained on past projects. In addition, TXP worked with Grapevine staff to refine the
estimates. An inflation rate of 3 percent was used to adjust retail sales per square
foot.
'R A LL a_ -Estimated Economic & Tax Impact of Downtown Grapevine Business Activity I October 2007
Table 3: Downtown Grapevine Study Tenants & Estimated Total Taxable Sales
Address -
Main Street
Square
Footage
Type of Tenant
Estimated Total
Sales
312
3,080
Tile and Carpet Store
$796,549
314
1,239
Retail Bead Craft Store
$320,430
316
2,328
Bakery and Cafe
$633,216
318
2,350
Bakery and Cafe
(with above value)
320
1,512
Shoe Repair Store
$391,033
322
897
Retail Wine Sales
$231,982
324
1,041
Wine Tasting Room
$269,223
326
2,048
Tea Room and Retail Sales
$584,724
330
1,960
Retail Clothing Boutique
$506,895
336
1,839
Retail - Gourmet Coffee and Gifts
$525,053
340
854
Sprint Retail Store
$85,400
342
7,920
Chix - Clothing Boutique
$2,048,270
309
2,436
Gift Shop
$314,025
309
2,225
Italian Cafe
$605,200
311
2,280
Gift Shop
$293,914
317
4,776
Gifts and Home Furnishings
$1,235,169
337
4,089
Gift Shop
$527,112
401
4,400
Office Supplies and Misc. Retail
$1,137,928
405
2,214
Gift Shop
$572,584
409
1,976
Retail Wine Sales
$511,033
411
1,840
Doll Shop
$475,860
413
1,948
Clothing Boutique
$503,791
415
1,350
Gift and Home Furnishings
$349,137
415
1,880
Retail Sales, Games & Amusements
$486,205
419
1,400
Culinary and Home Accessories
$362,068
421
1,712
Retail Clothing and Biker Accessories
$442,757
423
4,834
Restaurant
$875,000
404
1,757
Jewelry Store
$454,395
103 (W. Worth)
1,344
Boutique
$347,585
406
2,160
Bead Store
$558,619
408
2,763
Clothing Boutique
$714,567
412
1,600
Art and Glass Gallery
$413,792
414
3,529
Restaurant
$959,888
418
2,340
Antique Store
$605,170
420
2,248
Winery and Wine Tasting Room
$581,377
422
1,645
Gift Shop
$212,056
424
1,660
Gift Shop
$213,990
426
1,377
Gift Shop
$177,509
430
4,792
Florist Shop
$617,736
432
Total
Non -Local Spending
1,171
94,814
(@ 70%)
Restaurant
$1,500,000
$22,"1,254
:i ,145
Source: TXP, City of Grapevine
0,"RAFT - Estimated Economic & Tax Impact of Downtown Grapevine Business Activity I October 2007
i htS pL-y �.
DRAFT - Estimated Economic & Tax Impact of Downtown Grapevine Business Activity I October 2007
The money out-of-town visitors spend in downtown Grapevine restaurants, retail
shops, and other stores ripples through the economy, creating additional business
activity, employment, and tax revenue. While it is difficult, if not impossible, to
estimate how much of the indirect and induced spending remains within Grapevine's
city limits, the local economy receives a noticeable boost. Just as important as the tax
revenue impacts, non -local spending helps maintain a quality of life, vibrant
downtown, and entertainment options that might not be sustainable by local residents.
To be conservative, TXP has not included a tax estimate for the indirect and induced
effects of non -local spending.
To highlight the impact of non -local spending on Tarrant County, TXP has estimated
the annual economic impact associated with all business activity using the RIMS II
input-output economic system. While some economic activity would remain absent
non -local spending, a large number of stores and restaurants might close without this
injection of visitor spending. TXP has customized the model by modifying the
underlining industry data and by altering regional purchasing coefficient assumptions.
An economy can be measured in a number of ways. Three of the most common are
"Output," which describes total economic activity and is equivalent to a firm's gross
sales, "Employee Earnings," which corresponds to wages and benefits, and
"Employment," which refers to permanent jobs that have been created in the local
economy.
In an input-output analysis of new economic activity, it is useful to distinguish three
types of expenditure effects: direct, indirect, and induced.
Direct effects are production changes associated with the immediate effects or final
demand changes. The payment made by an out-of-town visitor to a hotel operator is
an example of a direct effect, as would be the taxi fare that visitor paid to be
transported into town from the airport.
Indirect effects are production changes in backward -linked industries caused by the
changing input needs of directly affected industries — typically, additional purchases to
produce additional output. Satisfying the demand for an overnight stay will require the
hotel operator to purchase additional cleaning supplies and services, for example,
and the taxi driver will have to replace the gasoline consumed during the trip from the
airport. These downstream purchases affect the economic status of other local
merchants and workers.
`= - Estimated Economic & Tax Impact of Downtown Grapevine Business Activity I October 2007 1
Induced effects are the changes in regional household spending patterns caused by
changes in household income generated from the direct and indirect effects. Both the
hotel operator and taxi driver experience increased income from the visitor's stay, for
example, as do the cleaning supplies outlet and the gas station proprietor. Induced
effects capture the way in which this increased income is in turn spent by them in the
local economy.
The interdependence between different sectors of the economy is reflected in the
concept of a "multiplier." An output multiplier, for example, divides the total (direct,
indirect and induced) effects of an initial spending injection by the value of that
injection - i.e., the direct effect. The higher the multiplier, the greater the
interdependence among different sectors of the economy. An output multiplier of 1.4,
for example, means that for every $1,000 injected into the economy, another $400 in
output is produced in all other sectors.
Table 4: Annual Economic Impact of Non -Local Spending in Downtown
Grapevine on Tarrant County 1700/. of ecnnnmir ar-tivitv1
Industry Sector
Output
Earnings
Employment
Agriculture, etc.
$111,730
$9,544
1
Mining
$18,190
$2,781
0
Utilities
$111,418
$12,947
0
Construction
$77,861
$21,471
1
Manufacturing
$1,126,201
$145,494
3
Wholesale trade
$471,793
$110,455
2
Retail trade
$5,568,661
$1,489,168
63
Transportation & warehousing
$411,198
$111,460
3
Information
$525,803
$107,398
2
Finance and insurance
$637,215
$127,727
2
Real estate and rental and leasing
$1,206,538
$72,919
2
Professional & scientific services
$424,449
$141,896
3
Management of companies
$187,289
$60,715
1
Administrative & waste services
$349,912
$109,560
5
Educational services
$68,836
$26,714
1
Health care and social assistance
$555,090
$222,656
6
Arts, entertainment, and recreation
$77,859
$27,594
2
Accommodation & food services
$3,477,577
$1,153,563
83
Other services
$292,033
$78,501
3
D,RAP e'- Estimated Economic & Tax Impact of Downtown Grapevine Business Activity I October 2007
Total $15;699,662 $4,032,564 983Source: TYP
DRAFT- Estimated Economic & Tax Impact of Downtown Grapevine Business Activity October 2007
TXP estimates non -local Downtown spending will generate $3.7 million in sales tax
revenue and 280,632 in property taxes over the next 10 -years. Using a discount rate
of 5 percent, the total net present value of this revenue stream is $3.0 million. TXP did
not estimate a tax impact for the indirect and induced effects of out-of-town spending,
but it is likely the impact would be greater since some owners and employees of
downtown establishments live in Grapevine.
Table 5: Downtown Grapevine Sales Tax Collections Attributable to Non -Locals
Year
Total Taxable
Retail Sales
Out-of-town Visitors
Total Retail Sales
Sales Tax Collection
Out-of-town Visitors
(2% sales tax rate)
1
$23,114,492
$16,180,145
$323,603
2
$23,807,927
$16,665,549
$333,311
3
$24,522,165
$17,165,515
$343,310
4
$25,257,830
$17,680,481
$353,610
5
$26,015,565
$18,210,895
$364,218
6
$26,796,032
$18,757,222
$375,144
7
$27,599,913
$19,319,939
$386,399
8
$28,427,910
$19,899,537
$397,991
9
$29,280,747
$20,496,523
$409,930
10
Total
$30,159,170
$264,981,749
$21,111,419
$185,487,225
$422,228
$3,709,744
source: 1 Mr, Lay of urapevine
Table 6: Downtown Grapevine Property Tax Attributable to Non -Locals
Year
Total Taxable
Property Value
70% Attributed to
Out-of-town Visitors
Property Tax Collection
Out-of-town Visitors
1
$9,647,157
$6,753,010
$24,480
2
$9,936,572
$6,955,600
$25,214
3
$10,234,669
$7,164,268
$25,970
4
$10,541,709
$7,379,196
$26,750
5
$10,857,960
$7,600,572
$27,552
6
$11,183,699
$7,828,589
$28,379
7
$11,519,210
$8,063,447
$29,230
8
$11,864,786
$8,305,350
$30,107
9
$12,220,730
$8,554,511
$31,010
10
Total;0
NPV (5% discount
$12,587,352
rate)
$8,811,146
$31,940
,632
$214,138
source: i AH, arty of urapevine
-Estimated Economic & Tax Impact of Downtown Grapevine Business Activity I October 2007
Legal Disclaimer
Attempts have been made to ensure the information contained herein is valid at the
time of publication. Texas Perspectives Inc. (TXP), however, reserves the right to make
changes, corrections and/or improvements at any time and without notice. In addition,
TXP disclaims any and all liability for damages incurred directly or indirectly as a result
of errors, omissions or discrepancies.
Any statements involving matters of opinion or estimates, whether or not so expressly
stated, are set forth as such and not as representations of fact, and no representation
is made that such opinions or estimates will be realized. The information and
expressions of opinion contained herein are subject to change without notice, and shall
not, under any circumstances, create any implications that there has been no change
................... _....... .
DRQ_. --' - Estimated Economic & Tax Impact of Downtown Grapevine Business Activity I October 2007