04-19-18 Community Investment - Laserfiche WebLink

Home Browse Search

� ,,CITY OF SOUTH BEND I OFFICE OF THE CLERK Chris Brewer,Vice President of Economics for AECOM with offices located at 100 South Wacker Drive, Chicago, IL, stated, Thank you, Gary. For the sake of disclosure, I've only been doing this for about twenty-five (25) years. I am an economist and I usually find I have to apologize for that so, again, full disclosure. My job in this effort is to place the different stations into a real estate framework. That is obviously not for the faint of heart. Trying to understand and predict what could happen in the future is always tricky. Just thinking about the last six (6) months we've had significant changes in our expectations for future inflation. I saw an article that said we might have four percent (4%) interest rates in two (2) years which would be a significant change from even nine(9)months ago. We have a federal budget for the first time in a while and we have new federal policies that have significantly altered how we generate taxes. So again,there are a lot of things to think about in terms of how we understand real estate. I'm responsible for figuring out what could happen, where it can and can't happen, and trying to put all of that into context related to how the different station locations could trigger ancillary real estate potential over the next five (5) to ten (10) years. Mr. Brewer continued, Our approach, ultimately, was as straightforward as possible. Part of it is simply documenting the land, the land use, the zoning of it and how much vacant land there is. The focus of the study was on the potential for new construction. We acknowledge that at many of these station locations we could also see adaptive reuse and renovation. For the sake of this study we focused explicitly on the potential for new construction. We tried to keep it more limited in focus in terms of opportunities. Obviously for these different station locations,there could be a renovation component which would be in addition to what we are talking about in the study. What we are trying to do ultimately though is, to a certain extent, predict the future. We are trying to understand a sustainable level of future development and then understand each station location's ability to capture a share of that market over time. We will explain that process in detail but it ties in ultimately to step number one (1) which is figuring out the inventory of vacant land we have around each site. The full report has an immense amount of detail about the exact land use conditions and real estate conditions around each station location. Mr. Brewer went on, We need to come up with a ten (10) year estimate of what could play out around each of these stations. Obviously we are going to have four(4) different station locations. Each one (1) of them is on a different real estate trajectory at this point so we are trying to put that into context. We are trying to understand, ultimately, based on how that development unfolds, what sort of tax proceeds we might expect. We try to figure out the economic impact of all that new construction, what that fiscal benefit might be and how that correlates with the cost of the station. And then again, the goal is to put this all in perspective. We need to understand the tradeoffs, the costs and benefits of each of the station locations to give that information to you. I would like to stress that today our goal is not to set policy, but to inform and continue the conversation about how we would anticipate the impact of these stations in the altering markets that influence the future trajectory for growth in the region. Mr. Brewer continued, So again,being the economist,I always have to try and put everything into perspective. I think part of this is understanding the basic function of growth. We need to understand how fast we are adding people and jobs. This post-recession environment has seen significant changes in where jobs are happening and not happening. Strong growth in jobs tend to have a very specific correlation in demand, for say, apartments. So what we know in the Midwest EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455 County-City Building 1 227 W.Jefferson Bvld South Bend,Indiana 466011 p 574.235.9221 if 574.235.9173 I TD 574.235.5567 l www.southbendin.gov 5