Presentation on theme: "1 Contents Background and IntroductionPage 2 Consideration of the Airport SitePage 10 Comparative Site Analysis Approach Page 14 Comparative Site Analysis."— Presentation transcript:
1 Contents Background and IntroductionPage 2 Consideration of the Airport SitePage 10 Comparative Site Analysis Approach Page 14 Comparative Site Analysis ResultsPage 19 Conclusions and Next StepsPage 34 Appendix - Finalist Site Descriptions and Photographs Page Number
3 Project Background The Jefferson Parish Economic Development Commission (JEDCO) has identified the need for a higher-end business park to support the retention, expansion, and attraction of technology investment and jobs in the Parish. An audit of Parish technology resources indicates that local technology companies are unable to find space to suit their expansion needs and/or desire for higher-end facilities. The Parish currently lacks available sites that can compete effectively on a national level for the types of technology investment that will raise the area’s effective wages. Ideally, the new Park will target technology-oriented companies; however, JEDCO’s vision for the Park is broadly inclusive, so as to include: Facility types that could range from high-end office to light manufacturing; Centers for technology development and learning (e.g., an incubator or academy); and, Operations / offices of companies in traditionally less-technical industries that are leveraging technology in innovative ways (e.g., manufacturing, logistics, and service- sector companies). It is JEDCO’s intent to maintain a high-end park image through specific building and landscaping codes, covenants and restrictions (CCRs) as opposed to strict limitations on the kinds of operations permitted.
4 Project Background (continued) Deloitte & Touche’s Fantus Group and JEDCO have completed Phase I of a search for the optimal site within Jefferson Parish for the new park. Of 19 sites evaluated in Phase I, three West Bank sites were selected as having the best overall potential to meet JEDCO’s stated objectives and support efficient development of the park: Churchill Farms; Marrero Land Site A; and, Marrero Land Site B. The goal of Phase II is to identify differences in the costs, timing, and other factors associated with developing these finalist sites, and to recommend a preferred site for JEDCO to move forward with the project.
5 Phase I Evaluation Process & Findings In Phase I, 19 sites were evaluated using several suitability screens corresponding to criteria necessary for the Technology Park’s successful development. Three Finalist Sites Development Concerns Road Access Image / Surrounding Land Uses Usable Acreage / Expansion Potential A minimum of 25 acres, with preference given to sites with greater expansion potential. Overall suitability of the site to support a higher image distinct from, yet compatible with, its surroundings. Issues that might inhibit development, such as: environmental, restrictive layout, easements, ownership, etc. Site is located in a less congested area, and has the potential for multiple entrance roads.
7 Finalist Sites: Marrero Land Sites A and B Site A Site B Of the two Marrero Land sites, Site A is the preferred option due to its rectangular, larger, and more flexible configuration.
8 Finalist Site: Churchill Farms US 90 Lapalco Blvd. Nicole Blvd. The Churchill Farms Site includes roughly 3,700 acres.
9 Phase I Conclusions Due primarily to the scarcity of developable East Bank land, the compelling sites for the Technology Park development are located on the West Bank. Just three East Bank sites were identified as candidates in Phase I, all of which are adjacent to the New Orleans International Airport. In their present configuration, none of the East Bank sites presents 25 developable acres (within 1 year timeframe). At the conclusion of Phase I, The Jefferson EDGE Technology Committee and Deloitte & Touche Fantus elected to perform additional Phase II due diligence on the North Airport Site (north of I- 10) due to: The site’s strategic location near the airport and Interstate; and, The site’s status as the best potential location on the East Bank for new office development. The finalist West Bank sites offer similar access to the overall technology resources of the Parish (companies, universities, labor, etc.). Thus, selection of a preferred site is driven primarily by real-estate considerations.
12 Consideration of the Airport Site To better understand the site’s development potential, and the process required to realize it, we met with the leadership of the Airport and the City of Kenner. Key obstacles to developing the site as a technology park that will meet JEDCO’s objectives include: Land control – Portions of the site are controlled by 14 private owners who have turned down multiple buyout offers from the Airport Commission. Land consolidation – Once the land is controlled, several roads will need to be closed in order to consolidate the site into a single, contiguous parcel. FAA restrictions – The Federal Aviation Administration places limits on the proximity of “schools” to an airport, possibly prohibiting the development of a technology academy within the Technology Park. Total acreage – The site’s total size has been estimated at 20.6 acres. However, restrictions on closing California Avenue and the I-10 exit ramp would likely limit the maximum contiguous site size to 15 acres or less. Jurisdictional complexities – Ownership, administration, and governance over the site is divided among at least four entities: the Airport, the City of New Orleans, the City of Kenner, and the private land owners.
13 Consideration of the Airport Site (continued) Although the North of Airport Site is not well suited for the Technology Park, it holds great potential for retail, commercial, or in- fill office development to support economic and community development in the City of Kenner and Jefferson Parish. From our discussions, it is clear that the stakeholder groups associated with the site share a common belief that the site’s potential remains untapped. They also share a desire to develop the site to its full potential.
15 Comparative Site Analysis Approach Our analysis of the finalist sites was guided by several key questions, and based on a comparison of key real-estate factors. Which site has the greatest potential to attract prospects and support long-term economic-development success for the Parish? Image and surrounding land uses Configuration Expansion potential How do the sites differ with respect to the effective cost and time required to develop and operate them? Land costs Utility service levels and extension requirements Wetlands mitigation Site preparation requirements Overall development timeframe These factors are not equally weighted in terms of their influence on the long-term success of the Technology Park. The sites’ image, configuration and land costs are the key determinants of their ability to attract prospects, locally and nationally.
16 Comparative Site Analysis Methodology Our analysis of the relevant development issues in Phase II was facilitated by detailed discussions with various private- and public- sector entities. Utility Service Providers – to evaluate the feasibility, cost and timeframe required to provide the necessary level of service to each site. Jefferson Parish Department of Engineering (water and sewer) ATMOS Energy (natural gas) Entergy Louisiana Corporation (electric) Cox Communications (full-service telecommunications) Planning, Zoning and Permitting – to determine the steps / timeframes required to obtain appropriate zoning, and to assess each site within the context of the Parish’s master land-use plan. Drainage & Environmental – to further assess any issues that might differentiate the development potential of finalist sites. Site owners / representatives – to explore asking prices for land and potential scenarios for partnership on the project, and to further convey JEDCO’s overall vision for the park. Other area business parks – to assess prospects’ alternate location options for technology investment / establishments within the greater New Orleans metropolitan area.
17 Site Development Factors and Assumptions Ultimately, several factors were identified as having the greatest impact on the cost / timing of development, and are expected to vary between the sites: Land costs; Utility extensions (sewer and water only); and, Wetlands delineation / mitigation. Based on our evaluation, we believe the following factors can be expected to be roughly equal for each site: Extension of natural gas, electric and telecommunication services to the site, and installation underground; The cost and timing of landscaping and road / parking-area construction; The time required to modify zoning classifications; Environmental, geotechnical and other condition assessments (excluding wetlands); and Engineering and architectural design efforts.
18 Additional Site Development Considerations The following factors may also influence each site’s development timing / costs, but can not be evaluated without additional condition assessments, conceptual design, and engineering studies: Clearing; Grading; Filling; Wetlands mitigation; and, Storm water management.
20 Comparison of Site Image and Configuration Because the image, configuration and expansion potential of a site largely determine its suitability for technology park development, these factors are heavily weighted in our analysis. Appropriate surrounding land uses enable a new park to achieve an attractive and distinct image. Large sites provide greater layout flexibility, both short and long term, along with the opportunity to incorporate mixed-use development that may not be possible on smaller sites. While the Marrero Land Site’s image is acceptable for a higher-image development, we believe the Churchill Farms Site offers a superior setting for the Technology Park’s initial phase and long-term growth. The area surrounding Churchill Farms is largely undeveloped, while the image of the Marrero Land Site A is influenced by nearby industrial, commercial and residential development. The Churchill Farms Site’s size and road access allow flexibility with respect to park layout as the development evolves, and should accommodate mixed-use development in response to prospects’ diverse needs.
21 Land Costs The owner of the Marrero Land Sites is willing to lease 25 acres for the project’s initial phase at rates ranging from $7,850 to $10,900 / acre / year. The midpoint of this range ($9,375 / acre / year), represents an annual lease cost for all 25 acres of approximately $234,000. These lease costs would be paid by future tenants, or possibly subsidized to some extent by JEDCO in order to attract tenants to the park. By comparison, the owner of the Churchill Farms Site is willing to donate to JEDCO, at no cost, 25 acres for the initial phase of the Technology Park. Therefore, at the Churchill Farms property, JEDCO would retain greater control over potential lease rates, and / or the opportunity to capture rental income from tenants over the life of the park. JEDCO could also possibly sell land in response to particular prospects’ requirements.
22 Land Costs (continued) This scenario illustrates the potential long-term lease income from the initial 25 acres of the Churchill Farms Site. Under this scenario, the initial acreage is absorbed at a rate of 20% per year over the first five years. The actual land cost benefits realized by JEDCO could be lower or higher than those below, depending on the actual absorption and lease rates realized. Year % Absorbed Annual Rent Cumulative Rent 120%$46,827 240%$93,654$140,841 360%$140,841$280,962 480%$187,308$468,270 5100%$234,135$702,405 6100%$234,135$936,540 7100%$234,135$1,170,675 8100%$234,135$1,404,810 9100%$234,135$1,638,945 10100%$234,135$1,873,080 Note:Analysis assumes annual lease rate of $0.215 psf (or $9,375 per acre) - the mid-point of lease rates provided by Marrero Land. The rents in the table are not discounted for NPV, nor adjusted upwards for potential future rent increases. Assuming a discount rate of 7% and a 2% annual lease-escalation rate (after year 5), the 20-year Net Present Value of lease income is approximately $2.3 million.
23 Site Development Timeframe To compare the sites’ relative development timeframes, we developed rough estimates of the duration of primary development tasks for the sites. Although the necessity and duration of some tasks (e.g., wetlands permitting) will vary between sites, the overall timeframe to develop both sites is largely determined by utility extensions – estimated to require 1 year at both sites. Hypothetical Technology Park development schedule: Month Activity1234567891011121314 Phase I Assessment Preliminary Wetlands Assessment Wetlands Permitting Conceptual Design Geotechnical Assessment Change Zoning Clear & Grade Road & Landscaping Sewer Line Extension** Water Line Extension** **Time estimates provided by Jefferson Parish Department of Engineering.
24 Utility Extensions – Gas, Electric and Telecom ATMOS Energy states that it can extend natural gas service to either site within JEDCO’s development timeframe. Per Entergy Louisiana, electric service to the site would be provided at 13.8 kV. Considerable electric infrastructure is in place at the Marrero Land Sites, while it will need to be extended to Churchill Farms along Nicole Boulevard from the Avondale residential development. Entergy suggests that the Marrero Land Sites might experience slightly better service-response times given the greater infrastructure and service requirements of the area’s industrial users. Differential costs to bury electric lines on either site will be borne by JEDCO / developer ($1.5 million per mile). Cox Communications expressed its willingness to extend full-service telecommunications infrastructure to either site. Natural gas, electric, and telecommunications services can be brought to the sites within the development timeframe, at no cost to JEDCO and / or the site developer.
25 Utility Extensions – Water and Sewer Neither site is presently served by both water and sewer: The Marrero Site lacks water service, while Churchill Farms lacks sewer service. The estimated time to complete engineering studies and install infrastructure is the same for both sites (1 year), but the cost for Churchill Farms’ installation could be as much as $1 million** more. **Estimates provided by Jefferson Parish Department of Engineering. Churchill Farms: 11,500-foot sewer line and lift station installation TimeCost Engineering study9 months$100,000 Line installation ($75/foot)3 months$862,500 Bore under Lapalco Boulevard—$50,000 New lift station$375,000 Total1 year$1,387,500 Marrero Site A: 4,100-foot water line extension TimeCost Engineering study5 months$100,000 Line installation ($75/foot)7 months$307,500 Bore under US 90—$55,000 Total1 year$462,500
26 Utility Extensions – Water and Sewer (continued) The true cost differential for utility extensions to the Churchill Farms site for the project may not reach $1 million, however, because: The length of the sewer-line extension can be reduced if the line is run through portions of the Churchill Farms Site as opposed to solely along Nicole and Lapalco Boulevards. Because sewer-line extensions will ultimately be required to support growth in this area, the Parish might not allocate the entire cost of these extensions to the Technology Park project. State and federal economic-development grant funding should be easier to obtain for water and sewer infrastructure versus other project costs such as gas/electric extensions, land acquisition, etc.
27 Water-Line Extension Map – Marrero Land Site Existing water lines need to be extended to the site from the east and west along Highway LA-18.
28 Sewer-Line Extension Map – Churchill Farms Site To connect the site to existing infrastructure, a new lift station is needed along with a significant line extension.
29 Wetlands Delineation & Mitigation Timing for a successful 404 Permit application to dredge and fill wetlands can be generalized as follows: Preliminary site assessment: 1 week; Delineation study and permit application: 1 month; and, U.S. Army Corps of Engineers (USACE) review: 4 to 6 months. In 1999, the USACE determined that the Marrero Sites did not contain jurisdictional wetlands. This status remains in effect until July 21, 2004, at which time the sites would need to be reassessed. Development prior to this date can proceed without additional studies or permit applications. A wetlands delineation has not been performed for the Churchill Farms Site. However, the site may be expected to contain wetlands given its proximity to the TPC Golf Course site, which contained significant wetlands.
30 Wetlands Delineation & Mitigation (continued) If mitigation is required, its impact on the development timeline will be minimal if the Parish initiates utility-extension studies prior to receiving the 404 Permit. Careful parcel selection for the initial phase of development may reduce or eliminate the need for wetlands mitigation. The additional development costs associated with wetlands delineation, permitting and mitigation include: Professional fees for the delineation studies and permit application; Additional earth moving / fill; and Land banking acreage for mitigation. With the possible exception of the earth-moving costs, these costs are not expected to be significant in terms of the entire development budget. Earth-moving costs associated with wetlands mitigation at Churchill Farms could be significant. These costs can not be reliably estimated without additional site-assessment and design work.
31 Future Land Use Plan The candidate sites are designated “Corporate Research Park” and “Community Mixed-Use” under the Parish’s proposed future land use plan. Low Density Residential Low-Medium Density Residential Medium Density Residential Medium High Density Residential High Density Residential Low Intensity Commercial High Intensity Commercial Corporate/Research Park Neighborhood Mixed Use Community Mixed Use Regional Mixed Use Light Industrial Heavy Industrial Public/Quasi-Public/Institutional Resources Lands Recreation Area Under Study FUTURE LAND USE Churchill Farms Site Future Land Use designation: Community Mixed Use Marrero Land Site Future Land Use designation: Corporate/Research Park
32 Zoning and Land-Use Planning Considerations Representatives from the Jefferson Parish Planning Department indicate that development of a Technology Park at either site is consistent with the Parish’s proposed Future Land Use Plan. If circumstances required it in the future, the Land Use Plan could be amended so as to facilitate development of the Technology Park. Both sites would likely need to be re-zoned prior to development. This process is reported to be straightforward, and could be completed within 90 days. In addition to an appropriate zoning classification, detailed codes, covenants and restrictions should be the primary means to govern the characteristics of the development, such as: Allowable industry types; Facility operating guidelines; Building construction specifications; and, Landscaping.
33 Summary of Comparative Analysis Factor Marrero Land Site A Churchill Farms Comments Image The Marrero Land Site’s surroundings convey a more industrial image, and could limit the overall image attained by the Technology Park. Configuration The Churchill Farms Site’s large size and nearby road configuration provide greater flexibility and expansion potential for long-term, mixed- use development. Land Cost 25 acres of donated land at the Churchill Farms Site may enable JEDCO to offset up-front development costs with future rental income. Utility Extension Cost Less costly utility extensions are required to serve the Marrero Land Site. Wetlands Initial development of the Marrero Land Site can proceed without wetlands delineation/permitting. Churchill Farms’ wetlands issues have not been assessed, and may affect its development requirements. Development Timing Utility-extension timeframes are similar for both sites, and largely determine the overall project timeframes. Site Preparation Requirements Clearing, grading and fill costs are expected to be less at the Marrero Land Site A. These costs, however, can not yet be quantified for either site. Zoning and Land- Use Planning Development of a Technology Park at either site is consistent with the Parish’s proposed Future Land Use Plan. Both sites may need to be re-zoned prior to development. Primary Importance Secondary Importance The following chart summarizes the comparative advantages and disadvantages of each finalist site.
35 Overall Conclusions JEDCO’s plan for a new Technology Park can be successfully realized at either finalist site. No fatal flaws were found for either property during our Phase II evaluation. While each site offers distinct strengths, the Churchill Farms property offers compelling advantages in the factors most critical to the long- term success of the project: Image – Churchill Farms offers better opportunity to create a higher-image park to compete on a local, regional, and national level for technology prospects. Site size and configuration – The Churchill Farms Site offers a greater opportunity for long-term expansion and flexibility in the development of the park. Land costs – Land cost savings at Churchill Farms will allow JEDCO to offer prospects more attractive lease rates, and / or capture rental income to offset Churchill Farms’ higher initial development costs. These savings will extend through the life of the project, and will continue to benefit JEDCO as land values rise in the area. Additional evaluation of development costs at Churchill Farms is needed to determine the extent to which land cost benefits offset its higher initial development costs. Over time, these factors combined should outweigh the lower potential up-front development costs offered by the Marrero Land Site.
36 Preliminary Next Steps Toward Park Development Further assess Churchill Farms’ site-specific development requirements Develop a conceptual design / layout for the park’s initial phase Perform preliminary wetlands assessment for a broad area of the site Identify optimal location for the initial-phase acreage (25 acres) Refine development budget estimates to confirm project feasibility and support funding requests Additional site assessments may be needed to support defensible project cost estimates Pursue cooperative agreement(s) with site owners and / or developers Roles and responsibilities Codes, covenants and restrictions (CCRs) Initiate pursuit of funding sources Initiate development process, focusing on rate-limiting steps such as utility-extension studies
37 Appendix Finalist Site Descriptions and Photographs
38 Marrero Land Sites A and B – Site Details Site Size / ConfigurationSite A: Approximately 102 acres in a roughly rectangular configuration Site B: Approximately 67 acres in a long, somewhat narrow configuration LocationLA Hwy 18 and LA Hwy 541, Bridge City OwnerMarrero Land & Improvement Association, Ltd. Asking PriceEstimated at $1.25 - $1.50 psf (or $55,000 - $65,00 per acre) sale price for a 25-acre parcel; Marrero Land would prefer to lease the property to JEDCO at an estimated price of $0.18 to $0.25 psf (or $7,800 - $10,900 per acre). Highway AccessLA Hwy 18 to US 90 (less than ¼ mile) Current UsePasture for cattle grazing; no permanent facilities on site other than barns, stables, and sheds Surrounding UsesAvondale Shipyards (west); US 90 (east, south); Rail yard (south); Church, school (north) Former UsePasture ZoningSite A: R-1A (Residential) / M-1 (Industrial); Site B: M-1 (Industrial) UtilitiesWater: 4,100-ft extension of 12” main required to serve the site; Sewer: Site gravity system can be run to nearby lift station; Gas: Line runs along east side of US 90 (approximately 1600’ from site); Electric: Adjacent to site along LA 18 and LA 541. Environmental / WetlandsNo environmental site assessments have been completed. Property was designated as a non-wetland area by USACE in 1999.
39 Marrero Land Sites A and B – Site Photos Facing south toward Site B from LA 541Facing east toward Site A from LA 541 Facing west toward Avondale from Site AFacing northeast toward Site A from LA 541
40 Churchill Farms - Site Details Site Size / ConfigurationProperty includes approximately 3,700 acres. LocationPrimary access road to the property is Nicole Blvd. via Lapalco Blvd. The property extends southwest to the edge of the hurricane protection levee system. OwnerJoseph Marcello Asking PriceThe owner is willing to donate 25 acres for the project. Highway AccessLapalco Blvd. to US 90 (approximately 1 mile) Current UseThe majority of the property is currently vacant and undeveloped. Some portions are being used for agriculture or pastureland. Surrounding UsesTPC golf course currently under construction along Nicole Blvd. Most land adjacent to the site is vacant and undeveloped. The Avondale subdivision is close to a remote portion of the site. Former UseAgriculture, pasture, or undeveloped ZoningThe majority of the property is currently zoned U-1 (Unrestricted District). UtilitiesWater: 16” main runs along Nicole Blvd.; Sewer: 11,500-ft extension of 12” main, along with a new lift station, is needed to serve the site; Gas: Line location is not known; however, ATMOS Energy indicates the site can be adequately served within the project timeframe; Electric: Transmission line will need to be extended along Nicole Blvd. from the Avondale residential subdivision. Environmental / WetlandsNo environmental site assessments or wetlands delineations have been reported.
41 Churchill Farms – Site Photos Intersection of Lapalco Blvd. and Nicole Blvd. Facing south along Nicole Blvd. toward property Facing west along Lapalco Blvd. from Nicole Blvd. TPC Golf Course property along Nicole Blvd.