Economic & Fiscal Impact Analysis
2615 Linglestown Road
Mixed-Use Development
Susquehanna Township
Dauphin County, Pennsylvania
Prepared for:
Vartan Group, Inc.
Project #15-4303
February 2015
Vartan Group – 2615 Linglestown Road | Table of Contents
TABLE OF CONTENTS
EXECUTIVE SUMMARY.......................................................................................................... III
I. INTRODUCTION .............................................................................................................. 1
A.
B.
II.
Assignment ..................................................................................................................................................1
Report Limitations .......................................................................................................................................1
DEVELOPMENT SCENARIOS............................................................................................. 3
A.
B.
III.
Current Zoning District: Business-Office-Residential (BOR).........................................................................3
Proposed Zoning District: Traditional Neighborhood Development (TND) .................................................4
ECONOMIC IMPACTS ............................................................................................... 8
A.
B.
C.
IV.
Methodology ...............................................................................................................................................8
Economic Impact during Construction Period .............................................................................................9
Economic Impacts during Operations........................................................................................................12
1. Business-Office-Residential (BOR) Zoning Scenario Assumptions......................................................13
2. Traditional Neighborhood Development Zoning Scenario Assumptions ...........................................15
3. Operation Period Economic Impacts ..................................................................................................17
FISCAL IMPACTS .................................................................................................... 20
A.
B.
Methodology .............................................................................................................................................20
1. Revenue ..............................................................................................................................................20
2. Expenditures.......................................................................................................................................22
3. Units of Government Demand ...........................................................................................................23
Fiscal Impact Analysis ................................................................................................................................25
1. Resident Yield .....................................................................................................................................25
2. Direct Property Taxes .........................................................................................................................25
3. Earned Income Tax .............................................................................................................................27
4. Local Services Tax (LST) & Per Capita Tax ...........................................................................................28
5. Fiscal Impacts......................................................................................................................................28
V. CONCLUSIONS ON IMPACTS.......................................................................................... 31
APPENDIX 1 UNDERLYING ASSUMPTIONS AND LIMITING CONDITIONS ............................... 32
APPENDIX 2 ANALYST RESUMES ......................................................................................... 34
Pag e i
Vartan Group – 2615 Linglestown Road | Table of Contents
TABLES, FIGURES AND MAPS
Table 1 Summary of Impacts ............................................................................................................................. vii
Table 2 By-Right Multifamily Construction Estimate ...........................................................................................3
Table 3 By-Right Commercial Construction Estimate ..........................................................................................4
Table 4 Estimated BOR Construction Estimate ....................................................................................................4
Table 5 TND Residential Construction Costs – Single Family Structures..............................................................6
Table 6 TND Residential Construction Costs – Multifamily Structure ..................................................................6
Table 7 Total Estimated TND Residential Construction Costs..............................................................................7
Table 8 Estimated TND Commercial Construction Costs .....................................................................................7
Table 9 Estimated TND Commercial Construction Costs .....................................................................................7
Table 10 Construction Period Economic Impact..................................................................................................9
Table 11 Construction Period Impact on Industry Output.................................................................................10
Table 12 Construction Period Impact on Value Added......................................................................................10
Table 13 Construction Period Impact on Employment Compensation..............................................................11
Table 14 Construction Period Impact on Employment......................................................................................12
Table 15 BOR Scenario Inputs - Projected Tenants and Estimated Annual Sales ..............................................13
Table 16 Estimated Aggregate Household Income............................................................................................14
Table 17 TND Scenario Inputs - Projected Tenants and Estimated Annual Sales ..............................................15
Table 18 Estimated Housing Payments for Owner Occupied Units ...................................................................16
Table 19 Estimated Aggregate Household Income............................................................................................16
Table 20 Operating Period Impacts ...................................................................................................................17
Table 21 Operating Period Contributions to Economic Output.........................................................................18
Table 22 Operating Period Contributions on Value Added................................................................................18
Table 23 Operating Period Contributions on Employment Compensation .......................................................19
Table 24 Operating Period Contributions on Employment................................................................................19
Table 25 Budgeted Revenues – Relevant Taxing Jurisdictions...........................................................................21
Table 26 Budgeted Expenditures – Relevant Taxing Districts............................................................................22
Table 27 Units of Government Demand ............................................................................................................23
Table 28 Budgeted Revenue per Unit of Government Demand ........................................................................24
Table 29 Budgeted Expenditures per Unit of Government Demand.................................................................24
Table 30 Residential Yield & Student Generation..............................................................................................25
Table 31 Clean and Green Rollback Taxes Calculation.......................................................................................26
Table 32 Property Tax Levy by Scenario and Land Use.......................................................................................27
Table 33 Earned Income Tax Calculation ...........................................................................................................27
Table 34 Fiscal Impacts to Susquehanna Township...........................................................................................29
Table 35 Fiscal Impacts to Susquehanna Township School District...................................................................30
Pag e ii
Vartan Group – 2615 Linglestown Road | Executive Summary
EXECUTIVE SUMMARY
Real Property Research Group, Inc. has been engaged by Vartan Group, Inc. to complete an
economic and fiscal impact analysis of a planned mixed-use development located at 2615
Linglestown Road in Susquehanna Township, Dauphin County, Pennsylvania. The subject site is
located approximately 6.5 miles northeast of downtown Harrisburg, Pennsylvania. The Vartan Group
is seeking a Traditional Neighborhood Development (TND) zoning district that would permit a wider
range of uses and limit certain restrictions within the current Business-Office-Residential (BOR)
zoning district. The Vartan Group has asked RPRG to evaluate two mixed-use development scenarios
that the firm is considering at the subject site.

The first scenario includes a mix of commercial, office, and multifamily residential uses and
would be permissible according to the current Business-Office-Residential zoning district.

The TND scenario tests the development of a variety of residential types including single
family detached homes, attached townhomes, age-restricted attached duplexes, and agerestricted multifamily units. The vast majority of residential units in the TND scenario would
be owner-occupied. A village center, including community green space and a community
swimming pool would be located within the development. The TND development scenario
also includes the following uses: convenience store/gas station, extended stay hotel, quick
service and full service restaurants, commercial banking, pharmacy, medical clinic, office
space, and street-level retail space.
Based upon these scenarios, RPRG has estimated the economic impact that each scenario will
contribute to the township and the county. Impacts include total economic output, employment,
employee wages, and value added to the local economy. RPRG has also estimated the fiscal impact
that each scenario will have on the three taxing districts of the subject: Susquehanna Township,
Dauphin County, and Susquehanna Township School District.
Based on our analysis, the key findings are described below and summarized in Table 1:
CURRENT ZONING DISTRICT – BUSINESS-OFFICE-RESIDENTIAL

Under the subject site’s existing Business-Office-Residential zoning designation, the Vartan
Group has developed a development scenario that includes the following:
o 408 Multifamily Residential Units
o 75,000 SqFt of General Occupancy Office Space (3 25,000 SqFt Structures)
o 12,000 SqFt Stand Alone Pharmacy w/ a drive-thru lane
o 10,800 SqFt Medical Office Building
o 6,400 SqFt Commercial Banking Space (2 separate banks)

RPRG estimates that this development scenario would cost approximately $82 million to
construction, which includes $63 million for the residential portion and $19 million for the
commercial portion. This scenario is estimated to generate 603 new residents, 23 of which
would be expected to be school age children who would attend Susquehanna Township
Public Schools.
Pag e ii i
Vartan Group – 2615 Linglestown Road | Executive Summary

Construction of the BOR Scenario is estimated to produce $75 million of total economic
output in Susquehanna Township. This includes addition of approximately 365 full-time
equivalent jobs and employee wages of $19 million during the construction period. These
economic impacts are temporary in nature, lasting only as long as the construction period.

At stabilization of the proposed BOR Scenario, commercial operations at the site are
estimated to be combined with the residential spending patterns of the new residents to
produce $43 million of total economic output annually. Commercial operations associated
with the proposed BOR Scenario would support an estimated 467 full-time equivalent jobs
that produce approximately $21 million in employee wages per year. New households living
in the multifamily residential units would produce an estimated aggregate income of $22.3
million annually, which translates to $54,500 per unit. These impacts would be expected to
be ongoing annually for the life of the stabilized operations at the subject site.
PROPOSED ZONING DISTRICT – TRADITIONAL NEIGHBORHOOD DEVELOPMENT SCENARIOS

The Vartan Group has developed a preliminary development scenario according to the
proposed Traditional Neighborhood Development Zoning District (TND):
TND Scenario

40 Single Family Detached Homes

110 Townhomes

30 Senior Independent Living Duplex Homes

96 Senior Independent Living Apartments

6,000 SqFt Convenience Store / 8 Pump Fueling Station

110 Room Extended Stay Hotel

4,000 SqFt Quick Service Restaurant

6,000 SqFt Full Service Restaurant

12,000 SqFt Stand Alone Pharmacy

10,000 SqFt Medical Office/Clinic

40,000 SqFt Street Level Retail/Restaurant

20,000 SqFt 2nd Floor Multi-tenant Commercial/Office

RPRG estimates that the average total development cost of the TND Scenario would be
approximately $106 million for construction, which includes $64 million for the residential
portion and $42 million for the commercial portion. This scenario is estimated to generate
520 new residents, 198 of which would be senior households living in the independent living
duplex or apartment units. The TND Scenario would generate an estimated 30 school age
children who would attend Susquehanna Township Public Schools.

The construction cost of the TND Scenario is estimated to produce $95 million of total
economic output in Susquehanna Township. This includes addition of approximately 410
full-time equivalent jobs and employee wages of $20 million during the construction period.
These economic impacts are temporary in nature, lasting only as long as the construction
period.
Pag e i v
Vartan Group – 2615 Linglestown Road | Executive Summary

At stabilization of the proposed TND Scenario, commercial operations at the site are
estimated to be combined with the residential spending patterns of the new residents to
produce $31 million of total economic output annually. Commercial operations associated
with the proposed TND Scenario would support an estimated 350 full-time equivalent jobs
that produce approximately $13 million in employee wages per year. New households living
in the multifamily residential units at the TND Scenario would produce an estimated
aggregate income of $21 million annually, which translates to $76,100 per unit. These
impacts would be expected to be ongoing annually for the life of the stabilized operations at
the subject site.
FISCAL IMPACTS OF DEVELOPMENT SCENARIOS ON TOWNSHIP AND SCHOOL DISTRICT

Both the BOR and TND development scenarios would produce a net fiscal surplus for
Susquehanna Township and Susquehanna Township School District. The uses at the subject
site would produce revenue for the jurisdictions in the form of Rollback Tax recapture for
property taxes, increased property taxes for new intensity of use, earned income and local
service taxes from the new jobs at the site, per capita tax for the new residents at the
subject location, and a pro-rata increase in revenue for each new job and resident in
addition to the sources above.

Upon expiration of the preferential tax assessment from the Clean and Green program (Year
1), the BOR Scenario is estimated to have a net fiscal impact of $217,000 and $1.0 million on
Susquehanna Township and the Susquehanna Township School District, respectively. The
net fiscal impact of the TND Scenario in Year 1 is estimated to be $284,000 and $1.3 million
for the Township and School District, respectively.

After the Rollback Tax recapture has been repaid, the estimated net fiscal impact in Year 2
and beyond of the BOR Scenario on the Township and School District would be $203,000
and $938,000, respectively. The net fiscal impact of the TND Scenario in Year 2 and beyond
is estimated to be $270,000 and $1.2 million for the Township and School District,
respectively.
CONCLUSIONS

Construction of the TND Scenario would produce greater overall economic impact than the
construction period of the BOR Scenario due to the greater diversity of uses that would
need to be constructed. Land development and construction costs for four separate types of
residential structures will be different from those dedicated to a single multifamily structure
on a single parcel. Additionally, the variety of different commercial structures and uses
associated with the TND Scenario will be more labor intensive than the limited number of
structures and uses associated with the BOR Scenario. In light of this, each scenario will
produce similar overall wages as the construction of multifamily structures and multiple
story commercial buildings tend to require more higher-skilled tradesman than single-story
commercial construction which utilizes more unskilled labor.

Commercial operations in the BOR Scenario will be more intense than commercial
operations in the TND Scenario. Stabilized operations of the BOR Scenario will be more
focused upon the general occupancy office tenants than the diversity of retail uses in the
TND Scenario. The BOR Scenario’s 75,000 square feet of office space is the primary
Pag e v
Vartan Group – 2615 Linglestown Road | Executive Summary
commercial driver, producing approximately one-third more total jobs than the TND
scenario.

Estimated household income per TND residential household is expected to be 40 percent
higher than the average estimated household income in the BOR residential units.
Approximately 65 percent of the TND residential units are expected to be owner occupied,
whereas all 408 multifamily units in the BOR Scenario are expected to be renter occupied.
The 96 multifamily units in the TND Scenario are dedicated to senior independent living
households, which tend to be “renters by choice” and therefore generally produce higher
household incomes than the overall average income of renter households.

The net fiscal surplus that the Township and School District would enjoy from either
development scenario relies upon the revenue generated from the increased intensity of
commercial uses, residential household incomes, and the limited number of school aged
children that are expected to attend the public schools due to the structure types and age
restrictions in the proposed developments.
We hope that you find this analysis helpful and we look forward to your comments.
_________________________
_______________________
Robert M. Lefenfeld
Managing Principal
Patrick J. Dieter
Analyst
Pag e v i
Vartan Group – 2615 Linglestown Road | Executive Summary
Table 1 Summary of Impacts
Project Overview
Geography
Susquehanna Township, Dauphin County, Pennsylvania
Location
Census Tract
Census Tract 219.04, Dauphin County, PA (2010)
Address
2615 Linglestown Road, Harrisburg, PA 17110
Site Status pre-development
Unimproved
Development Assumptions - Existing By Right - Business/Office/Residential Zoning District (BOR Scenario)
Structures
408 Multifamily Residential Units
75,000 SqFt General Occupancy Office
6,400 SqFt Commercial Banking
12,000 SqFt Stand Alone Pharmacy
10,8000 SqFt Medical Office
Estimated Development Cost
$82 million
Estimated Residential Generation
603 Residents
Estimated Public School Student Generation
23 Public School Students
Development Assumptions - Proposed - Traditional Neighborhood Development Zoning District (TND Scenario)
276 Residential Units (40 SFD, 110 TH, 30 Duplex, 96 Ind. Living MF)
Structures
Convenience Store/Fueling Station
110 Room Hotel
Quick and Full Service Restaurants
Commercial Banking; Pharmacy; Medical Office
40,000 SqFt Street Level Retail; 20,000 SqFt 2nd Floor Office Space
Estimated Development Cost
$106 million
Estimated Residential Generation
520 Residents (198 Senior Independent Living Residents)
Estimated Public School Student Generation
30 Public School Students
Economic Impacts
Construction Period (One Time)
BOR Scenario
TND Scenario
Economic Output
$74.8M
$90.5M
Employment Impact (FTE)
365
410
$19.0M
$19.5M
Employee Wages
Operating Period (Annual Average)
BOR Scenario
TND Scenario
$43.2M
$31.4M
Economic Output
Employment Impact (FTE)
467
350
Employee Wages
$20.9M
$12.7M
Household Income from new Residents
$22.3M
$21.0M
Household Income per new unit
$54,569
$76,126
Fiscal Impacts
Operating Period (Annual Average)**
Suquehanna Township
Direct Revenue Impact
Indirect Revenue Impact
Direct Expenditure Impact
Indirect Expenditure Impact
Net Fiscal Impact - Susquehanna Twp
Susquehanna Twp School District
Direct Revenue Impact
Indirect Revenue Impact
Direct Expenditure Impact
Indirect Expenditure Impact
Net Fiscal Impact - Susq Twp School District
Year 1 - Includes Rollback Taxes
TND Scenario
BOR Scenario
$574,000
$586,000
$5,000
$3,000
-$359,000
-$303,000
-$3,000
-$2,000
$217,000
$284,000
$1,359,000
$0
-$348,000
$0
$1,011,000
$1,725,000
$0
-$454,000
$0
$1,271,000
Year 2 & Beyond
TND Scenario
BOR Scenario
$560,000
$572,000
$5,000
$3,000
-$359,000
-$303,000
-$3,000
-$2,000
$203,000
$270,000
$1,286,000
$0
-$348,000
$0
$938,000
$1,651,000
$0
-$454,000
$0
$1,197,000
**Fiscal Impacts are rounded to nearest thousand
Pag e v ii
Vartan Group – 2615 Linglestown Road | Introduction
I. INTRODUCTION
A. Assignment
Real Property Research Group, Inc. has been engaged by Vartan Group, Inc. to complete an
economic and fiscal impact analysis of a planned mixed-use development located at 2615
Linglestown Road in Susquehanna Township, Dauphin County, Pennsylvania. The subject site is
located approximately 6.5 miles northeast of downtown Harrisburg, Pennsylvania. The Vartan Group
is seeking a Traditional Neighborhood Development (TND) zoning district that would permit a wider
range of uses and limit certain restrictions within the current Business-Office-Residential (BOR)
zoning district. The Vartan Group has asked RPRG to evaluate two mixed-use development scenarios
that the firm is considering at the subject site.

The first scenario includes a mix of commercial, office, and multifamily residential uses and
would be permissible according to the current Business-Office-Residential zoning district.

The second, TND scenario tests the development of a variety of residential types including
single family detached homes, attached townhomes, age-restricted attached duplexes, and
age-restricted multifamily units. The vast majority of residential units in the TND scenario
would be owner-occupied. A village center, including community green space and a
community swimming pool would be located within the development. The TND
development scenario also includes the following uses: convenience store/gas station,
extended stay hotel, quick service and full service restaurants, commercial banking,
pharmacy, medical clinic, office space, and street-level retail space.
Based upon these scenarios, RPRG has estimated the economic impact that each scenario will
contribute to the township and the county. Impacts include total economic output, employment,
employee wages, and value added to the local economy. RPRG has also estimated the fiscal impact
that each scenario will have on the three taxing districts of the subject: Susquehanna Township,
Dauphin County, and Susquehanna Township School District.
The report is divided into four sections. Following this introduction, Section 2 describes the
proposed development scenarios and the assumptions used to develop an estimated budget for
each scenario. These calculations provide the basis of the overall analysis. Section 3 measures the
direct, indirect and induced economic impacts of the subject project on the township economy.
Section 4 calculates the fiscal impacts of the project on local government jurisdictions.
B. Report Limitations
The conclusions reached in a community impact analysis are inherently subjective and there can be
no assurance that the estimates made or assumptions employed in preparing this report will in fact
be realized or that other methods or assumptions might not be appropriate. The analyst relied on
statements of the project sponsor and other third parties with respect to the subject project. RPRG
made no attempt to verify the truthfulness or accuracy of such statements. The conclusions
expressed in this report are as of the date of this report, and an analysis conducted as of another
date may require different conclusions. The actual results achieved will depend on a variety of
Pag e 1
Vartan Group – 2615 Linglestown Road | Introduction
factors including the performance of management, the impact of changes in general and local
economic conditions, and the absence of material changes in the regulatory or competitive
environment. Reference is made to the statement of Underlying Assumptions and Limiting
Conditions attached as Appendix I and incorporated in this report.
Pag e 2
Vartan Group - 2615 Linglestown Road | Operations Estimates
II. DEVELOPMENT SCENARIOS
The Vartan Group provided RPRG with an outline of development scenarios based upon the current
Business-Office-Residential (BOR) zoning of the subject parcel and the proposed Traditional
Neighborhood Development (TND) zoning of the subject. RPRG translated these development
concepts into a set of monetary assumption inputs for the purpose of producing an estimate of
economic impact for the theoretical construction and operating periods if the project were to be
developed “by-right” or according to a new TND zoning designation.
This section illustrates the assumptions that RPRG developed for the construction period for each
development scenario. The economic impacts associated with the estimates in this section are onetime impacts and last only as long as the construction period. The operating impacts, or ongoing
impacts over the life of the development will be addressed in Section III.
A. Current Zoning District: Business-Office-Residential (BOR)
The Vartan Group provided a preliminary development scenario that would be permissible by-right
according to the current BOR zoning district:

Residential: 408 Apartment Units (Mix of one bedroom and two bedroom units)

Commercial:
o 3 - 25,000 SqFt General Occupancy Office Buildings (75,000 SqFt)
o 2 – 3,200 SqFt Commercial Banks (6,400 SqFt)
o 1 – Stand Alone Pharmacy (12,000 SqFt)
o 1 – Medical Office Building (10,800 SqFt)
Based on this development scenario, we make the following construction cost assumptions:
“BOR” RESIDENTIAL
RPRG assumed that 70 percent or 286 of the multifamily units will contain one bedroom and 30
percent or 122 units will contain two bedrooms. One bedroom units are expected to offer 800
square feet and two bedroom units are expected to offer 1,200 square feet. An additional 20
percent of the total square footage has been added for corridors, amenities, and common areas.
The structure would be expected to contain a total of 450,240 square feet (Table 2). Based upon the
average cost per square foot for multifamily construction in the Harrisburg MSA, RPRG estimates
that the development cost for the multifamily portion of the project would be approximately $63.1
million.
Table 2 By-Right Multifamily Construction Estimate
Item
A
Total Livable Square Feet
B
Corridor/Common Area SqFt
C
Total Multifamily SqFt (A + B)
Avg Cost per SqFt Multifamily Construction Harrisburg MSA
Total Estimated Multifamily Construction
Costs (C * D)
D
E
Amount
375,200
75,040
450,240
$140
$63,065,117
Sources:Vartan Group, RSMeans Construction data, BLS, RPRG
Pag e 3
Vartan Group - 2615 Linglestown Road | Operations Estimates
“BOR” COMMERCIAL
Construction costs for the proposed commercial sections of the BOR scenario total $18.8 million for
104,200 square feet of usable space (Table 3). Construction costs per square foot range from
$128.33 for a commercial bank to over $207 per square foot for medical office space.
Table 3 By-Right Commercial Construction Estimate
Use
SqFt
Cost per
Unit
Estimated
Construction
Cost ($000s)
Commercial By Right - "BOR" Zoning
General Occupancy Office Buildings
Banks (2 @ 3,200 SqFt)
Pharmacy
Medical Office Building
Total Commercial - "BOR" Zoning
75,000
$162.29
6,400
$128.33
$821
12,000
$192.50
$2,310
10,800
$207.34
104,200
$13,389
$2,239
$18,760
Sources: RSMeans; CVS, Inc; Trade Data; RPRG
The total estimated construction budget for the By-Right BOR development scenario is $81.8 million
(Table 4).
Table 4 Estimated BOR Construction Estimate
Total Construction Cost Estimates BOR Zoning
Total Residential Construction
$63,065,117
Total Commercial Construction*
Estimated Residential Construction
Costs
$18,759,538
$81,824,655
B. Proposed Zoning District: Traditional Neighborhood Development (TND)
The Vartan Group provided RPRG with basic information for a possible development scenario under
the proposed Traditional Neighborhood Development (TND) zoning district that the developer is
seeking. The scenario includes residential and commercial uses along with a central village
community area and swimming pool. The scenario includes the total commercial space of 60,000
square feet that consists of 40,000 square feet of ground floor retail/restaurant space and 20,000
square feet of commercial/office space on the second floor.
The TND scenario includes 276 total residential units in a variety of structures, a central village green
with a community building and swimming pool, and more than 100,000 square feet of retail,
commercial, and medical space, and a 110 room hotel. Further details are below:
Pag e 4
Vartan Group - 2615 Linglestown Road | Operations Estimates

Residential:
o
o
o
o

40 – Single Family Detached homes (2,000-3,000 SqFt)
110 – Townhouses (1,000-1,500 SqFt)
30 – Duplex Homes – Senior Independent Living (1,500-1,800 SqFt)
96 – Apartments – Senior Independent Living (800 – 1,200 SqFt)
Commercial:
o
o
o
o
o
o
o
o
o
1 – Convenience Store & Fueling Station (6,000 SqFt & 8 pumps)
1 – Extended Stay Hotel (110 Rooms)
1 – Quick Service Restaurant
1 – Commercial Bank with 3 drive-thru lanes (3,000 SqFt)
1 – Full Service Restaurant (6,000 SqFt)
1 – Stand Alone Pharmacy with drive-thru (12,000 SqFt)
1 – Medical Clinic (10,000 SqFt)
Street Level multi-tenant retail/restaurant (40,000 SqFt)
2nd Floor multi-tenant office space (20,000 SqFt)
TND RESIDENTIAL
RPRG developed a set of assumptions for the proposed TND residential uses based upon the initial
guidelines provided by the Vartan Group. Of the 180 proposed single family units, 40 are single
family detached homes, 110 are attached townhouses, and 30 are attached duplexes. The 30
duplexes are likely to be reserved for senior independent living households. RPRG developed a total
sale price for each structure type based upon average square footage using 2014 National Building
Cost Manual (Craftsman Book Company) and data from the National Association of Homebuilders’
(NAHB) 2013 construction cost survey (Table 5).
Pag e 5
Vartan Group - 2615 Linglestown Road | Operations Estimates
Table 5 TND Residential Construction Costs – Single Family Structures
Sale Price Breakdown - Single
Family Structures
Average Square Feet
Estimated Sale Price
Single Family
Detached
Townhouse
Duplex
2,500
1,250
1,650
$316,300
$194,000
$250,000
Finished Lot Construction
18.6%
$58,800
$36,100
$46,500
Total Construction Cost
61.7%
$195,200
$119,700
$154,300
Financing Cost
1.4%
Overhead/Soft Costs
4.3%
$4,400
$2,700
$3,500
$13,600
$8,300
$10,800
Marketing Costs
1.1%
$3,500
$2,100
$2,800
Sales Commission
3.6%
$11,400
$7,000
$9,000
Developer Fee
9.3%
$29,400
$18,000
$23,300
Single Family Construction Cost by
Unit Type ($000s)
Planned Units
$12,652
$21,340
$7,500
40
110
30
Total Single Family Construction
$41,492,000
Costs
Note: Totals may differ from unit type sums due to rounding
Sources: Natl Bldg Cost Manual (2014); NAHB; Vartan Group; RPRG
The estimated average sale prices function as the total construction cost as they include all relevant
items beyond hard construction such as design, engineering, permitting, and sales commissions,
which also provide local economic impacts. The 180 single family structures are estimated to have a
total construction cost of $41.5 million.
The developer has also proposed a 96 unit multifamily community reserved for independent living
senior households as part of the TND scenario. RPRG assumed the same unit distribution of
multifamily units for the TND scenario as it did for the BOR scenario, which includes 70 percent one
bedroom units (67 units) and 30 percent two bedroom units (29 units). One bedroom units are
expected to have 800 square feet and two bedroom units are expected to have 1,200 square feet.
With a 20 percent addition for corridors and common areas, the total square footage in the
proposed TND multifamily structure is estimated to be 106,080 square feet (Table 6). Total
development costs for the multifamily portion of the TND scenario is estimated to be $22.3 million.
Table 6 TND Residential Construction Costs – Multifamily Structure
Item
A
Total Livable Square Feet
Amount
88,400
B
Corridor/Common Area SqFt
C
Total Multifamily SqFt (A + B)
106,080
17,680
D
Avg Cost per SqFt Multifamily
Construction - Harrisburg MSA
$210
E
Total Estimated Multifamily
Construction Costs (C * D)
$22,276,800
Sources: RSMeans; BLS; Vartan Group; RPRG
Pag e 6
Vartan Group - 2615 Linglestown Road | Operations Estimates
The total development cost of the residential construction in the proposed TND scenario is
estimated to be $63.8 million (Table 7).
Table 7 Total Estimated TND Residential Construction Costs
Residential Cost Estimates
Total Single Family Construction
$41,492,000
Total Multifamily Construction
Estimated Residential
Construction Costs
$22,276,800
$63,768,800
TND COMMERCIAL
The developer has proposed a commercial scenario that includes a variety of uses (Table 8). The
estimated construction cost for the commercial scenario is $42.7 million, which includes the
community amenities that are expected to cost approximately $930,000 to construct.
Table 8 Estimated TND Commercial Construction Costs
Use
SqFt /
Rooms
Cost per
Unit
Estimated
Construction
Cost ($000s)*
Commercial - TND Proposal
Covenience Store/Gas Station
6,000
N/A**
$2,858
Extended Stay Hotel
110 $174,075
$21,063
Quick Service Restaurant
3,200
$516
$1,815
Bank w/ 3 Drive-thru Lanes
3,000
$233
$770
Full Service Restaurant
6,000
$303
$1,999
Pharmacy w/ Drive-thru Lane
12,000
$175
$2,310
Medical Clinic
10,000
$189
$2,074
Street Level Retail/Restaurant
40,000
$121
$5,321
2nd Floor Commercial/Office
20,000
$162
$3,570
Commercial - TND Total
$41,780
Community Spaces
Community Center & Pool
N/A
$673
Central Green Space
N/A
$257
Community Spaces Total
$930
Total - TND Commercial
$42,710
*Total Costs include a 10% premium for contingency and Deferred Developer Fee
** Price per SqFt is not applicable as combined costs include fuel tanks/pumps
Combined with the estimated $63.8 million construction cost of the residential uses in the TND
proposal, the total construction costs are expected to be approximately $106.5 million (Table 9).
Table 9 Estimated TND Commercial Construction Costs
Total Construction Cost Estimates TND Zoning
Total Residential Construction
$63,768,800
Total
Commercial
Construction
Estimated
Residential
Construction Costs
$42,710,108
$106,478,908
Pag e 7
Vartan Group - 2615 Linglestown Road | Economic Impacts
III. ECONOMIC IMPACTS
A. Methodology
To estimate the impact of a new investment or a change in a region’s economy, economists use
input-output models based on sets of regional multipliers. The multiplier approach stems from
decades of research into the functioning of regional economies. As demand for the output of one
industry in a region increases (a direct impact), that industry will increase its demand for raw
materials, parts, transportation, and utilities supplied by other industries in the region (indirect
impacts). This increased demand from both the direct and indirect impacts also increases demand
for labor, and therefore increases employment and employment compensation. Increased
employee compensation also increases household consumption, further increasing demand for
industry output in the region (induced impacts). Input-output models are used to estimate this
interaction between regional firms and consumers to predict the overall change in a regional
economy that results from a single economic event, such as the construction of a new building, a
new firm moving to a region or a military base closing.
IMPLAN, an econometric model used for this impact analysis, was originally developed by the US
Department of Agriculture. Data and updated software is now available through IMPLAN Group,
LLC. For any change in the final demand of a given industrial sector in an economy, IMPLAN
provides the necessary calculations and data to estimate the direct, indirect and induced impacts to
economic output, employment and value-added. Value-added impacts include: (1) employee
compensation (including payroll and benefits); (2) proprietary income (payments received by selfemployed individuals as income); (3) other property type income (rents, royalties and dividends);
and (4) indirect business taxes (excise taxes, property taxes, fees, licenses, and sales taxes paid by
businesses, but not taxes on profit or income).
Impacts from a set of real estate investments such as the Vartan Group’s Linglestown Road project
come in two stages: (1) during the predevelopment / construction period and (2) after build-out,
and during the operations or occupation period. The two impacts are determined separately
because the construction impacts occur once and are considered to be temporary impacts. After
build out, the production/operating activities of the building users, as well as the operation of the
building itself, are considered permanent impacts. Combined, the impact analysis of a real estate
investment provides a long term view of the economic value real estate development brings to a
community.
For purposes of this analysis, the regional economy is considered to be Dauphin County,
Pennsylvania, although all direct impacts will take place in Susquehanna Township as it is the
location of the subject parcel. Although Indirect and Induced impacts will occur throughout the
county based upon the direct expenditures of the project, the proportion of indirect and induced
impacts in the township are expected to be proportional to the township’s percentage of the
county’s at-place employment. As of 2013, Susquehanna Township contained approximately 10.4
percent of all jobs in Dauphin County. The countywide Indirect and Induced figures in the analysis
have been adjusted to only reflect Susquehanna Township using this figure.
Pag e 8
Vartan Group - 2615 Linglestown Road | Economic Impacts
B. Economic Impact during Construction Period
Impacts associated with the construction phase of the Linglestown Road project include both the
increase in demand for construction, but also the increase in demand for equipment and
professional services such as engineering and architecture. Hard construction costs typically account
for approximately 75 percent of the total development cost of a project, with soft costs such as
design, permitting, environmental, marketing, and financing fees accounting for the remaining 25
percent. RPRG operated according to this metric for each of the construction inputs in the IMPLAN
model unless we were able to discern a more precise figure based upon data from the developer or
generally accepted industry data. For example, we applied a specific distribution of sectors to the
TND single family construction budget according to reputable industry sources (see Table 5).
Table 10 summarizes the overall economic impacts that result from the construction activity
associated with the different scenarios that the developer provided to RPRG. The BOR zoning
scenario is presented on the left side of the table. The impacts associated with the TND scenario is
located on the right side of the table. All impacts are presented in 2015 dollars.
After adjusting for regional/non-regional spending and inflation, the construction of the By-Right
BOR zoning scenario would have a direct impact of $70.6 million on the township. The total
economic impact during the construction phase of the BOR scenario on the township’s economy,
including direct, indirect and induced impacts, is estimated to be $70.6 million in total output, 381
new jobs, and a $36.3 million increase to value added, of which $22.8 million relates to the increase
in employee compensation.
The construction of TND Zoning Scenario would have a direct impact of $90.5 million on the
township. The total economic impact during the construction phase of the TND Scenario on the
township’s economy, including direct, indirect and induced impacts, is estimated to be $94.6 million
in total output, 426 new jobs, and a $54.6 million increase to value added, of which $23.4 million
relates to the increase in employee compensation.
As these impacts relate to the construction period only, these impacts are temporary and will occur
throughout the construction period as expenditures are made.
Table 10 Construction Period Economic Impact
Direct Impact - Total Output ($000s)
By-Right
(BOR) Zoning
Scenario
TND
Scenario
$70,550
$90,519
$74,805
$94,619
Total Economic Impact
Total Output ($000s)
Total Employment (All Jobs)
381
426
Total Value Added ($000s)
$36,353
$54,604
Total Employee Compensation ($000s)
$22,819
$23,448
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
Pag e 9
Vartan Group - 2615 Linglestown Road | Economic Impacts
Table 11 breaks out the impact of total output during the construction period. Of the total $74.8
million of total impact to industry output for the construction of BOR scenario, $70.6 million is
considered direct impact, $2.6 million is the indirect impact and $1.7 million is the induced impact.
Of the total $94.6 million of total impact to industry output for the construction of the TND scenario,
$90.5 million is considered direct impact, $2.3 million is the indirect impact and $1.7 million is the
induced impact.
Table 11 Construction Period Impact on Industry Output
By-Right
(BOR) Zoning
Scenario
TND
Scenario
Direct Impact on Output
$70,550
$90,519
Indirect Impact on Output
$2,577
$2,318
Induced Impact on Output
$1,678
$1,782
Total Industry Output ($000s)
$74,805
$94,619
Impact on Industry Output ($000s)
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
Table 12 shows the direct, indirect and induced impacts to value added in Susquehanna Township
resulting from the construction of BOR and TND Scenarios. The economic definition of value added
is the difference between the final price of a product and the cost of the intermediate goods used to
produce the product. Typically, value added includes payments to employees for labor, business
taxes paid to governments, and payments to investors in the form of interest, dividends or profits.
The IMPLAN model has estimated that the total impact to value added as a result of the
construction of the BOR Scenario is $36.4 million and that the total impact to value added as a result
of the TND Scenario is $54.6 million.
Table 12 Construction Period Impact on Value Added
By-Right
(BOR) Zoning
Scenario
TND
Scenario
Direct Impact on Value Added
$33,866
$52,197
Indirect Impact on Value Added
$1,466
$1,323
Induced Impact on Value Added
$1,021
$1,084
$36,353
$54,604
Impact on Value Added ($000s)
Total Impact on Valued Added ($000s)
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
One component of value added is employment compensation. Table 13 identifies the direct,
indirect and induced impacts to total employment compensation during the construction period of
both scenarios of the subject project. As discussed above, the employment compensation impact as
estimated by the IMPLAN model includes the value of wages and benefits, including health
insurance and contributions to retirement. As benefits offered to employees vary significantly from
job to job and industry to industry, RPRG adjusted the IMPLAN output to isolate the impact solely on
Pag e 10
Vartan Group - 2615 Linglestown Road | Economic Impacts
employee wages. Data from the U.S. Bureau of Economic Analysis (BEA) provides the ability to
estimate the ratio of total employment compensation to employee wages on an industry by industry
basis. This ratio was applied to the IMPLAN employment compensation impact to derive the direct,
indirect and induced impact on employee wages. The construction of the BOR Scenario has a total
impact to employee wages of $19.0 million, which includes direct impact to employee wages of
$17.6 million. The construction of the TND Scenario has a total impact to employee wages of $19.5
million, which includes direct impact to employee wages of $18.4 million. It is estimated the 83
percent of the direct compensation that employees received for construction of the TND Scenario
comes in the form wages.
Table 13 Construction Period Impact on Employment Compensation
By-Right
(BOR) Zoning
Scenario
TND
Scenario
Impact on Employment Compensation ($000s)
Direct Impact on Emp Compensation
$21,461
$22,125
Indirect Impact on Emp Compensation
$816
$747
Induced Impact on Emp Compensation
$542
$576
$22,819
$23,448
Direct Impact
0.832
0.832
Indirect Impact
0.839
0.847
Induced Impact
0.845
0.841
Total Emp Compensation ($000s)
Blended Ratio of Wages($) to Emp Compensation($)
Impact on Employee Wages ($000s)
Direct Impact on Employee Wages
$17,859
$18,408
Indirect Impact on Employee Wages
$684
$633
Induced Impact on Employee Wages
$458
$484
$19,001
$19,525
Total Employee Wages ($000s)
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013); Bureau of Econonic Analysis
Table 14 identifies the direct, indirect and induced impacts to total employment in Susquehanna
Township resulting from the construction of the BOR and TND Scenarios. The IMPLAN model
estimates the impacts to total employment, including both full-time and part-time jobs. A FTE job is
any job with a minimum 35-hour work week. To convert the IMPLAN employment impact estimates
to FTE jobs, RPRG utilized data from the BEA to identify the ratio of full and part time jobs to FTE
jobs by industry. This ratio was applied on an industry by industry basis to the IMPLAN employment
impact to derive impact on FTE jobs as shown.
The construction activity associated with BOR Scenario results in an estimated 381 total jobs during
the construction period, of which 365 are estimated to be FTE. Of the 365 FTE jobs, 330 are directly
related to the construction project, 23 jobs are indirectly related and 12 jobs are induced in the
township.
The construction activity associated with the TND Scenario results in an estimated 426 total jobs
during the construction period, of which 410 are estimated to be FTE. Of the 410 FTE jobs, 377 are
directly related to the construction project, 20 jobs are indirectly related and 13 jobs are induced in
the township.
Pag e 11
Vartan Group - 2615 Linglestown Road | Economic Impacts
Table 14 Construction Period Impact on Employment
By-Right
(BOR) Zoning
Scenario
TND
Scenario
Direct Impact on Employment
343
391
Indirect Impact on Employment
25
21
Induced Impact on Employment
14
14
381
426
Impact on Employment (All Jobs)
Total Employment (All Jobs)
Blended Ratio of FTE to Full and Part-Time Jobs
Direct Impact
0.962
0.965
Indirect Impact
0.919
0.926
Induced Impact
0.890
0.888
Direct Impact on FTE Jobs
330
377
Indirect Impact on FTE Jobs
23
20
Induced Impact on FTE Jobs
12
13
365
410
Impact on Full Time Equivalent (FTE) Jobs
Total FTE Jobs
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
All of the construction period impacts identified above are temporary by nature and would end once
the construction is completed, regardless of the development scenario. The impacts are also not
experienced all at once, but rather are experienced as construction expenditures are incurred.
C. Economic Impacts during Operations
In economic activity studies, researchers are asked to identify the economic impact of a specific
event, project or policy. When the event, project, or policy brings a new industry to a region or
results in an overall increase in industry or consumer spending, the new economic activity generated
by the event, project or policy is said to impact the local economy. The new economic activity adds
to the existing economic activity in the region. For example, the construction activity associated
with the subject project represents new demand for construction work that otherwise would not
occur but for the investment being made in the project.
However, often the event, project or policy in question does not necessarily represent new
economic activity. While future office tenants will generate economic activity for the township and
the county, it is not certain that that economic activity would not have occurred regardless of the
investment in the project. Additionally, patrons of the new retail businesses would likely spend
their dollars designated for food, tangible goods, or entertainment at other establishments if the
project did not exist. Meanwhile, the future residents of the residential units (either owners or
renters) may or may not be new to Susquehanna Township, which would differentiate their
aggregate impact on the local economy. Only the economic contributions through increased
marginal household spending of households new to the city could be unequivocally considered new
Pag e 12
Vartan Group - 2615 Linglestown Road | Economic Impacts
economic activity. It is unknown how many of the future resident households would be drawn from
outside of the township by the project and how many would be in the township regardless of the
project.
Given that Susquehanna Township is predominantly a bedroom community with limited retail, and
older housing stock, and just 10 percent of the county’s at-place employment, this analysis assumes
that the economic activity that occurs during the operations of either scenario illustrated in this
model reflect new economic impacts as opposed to the reallocation of existing economic
contributions.
Operating period contributions are expressed on an annual basis and, unlike construction period
impacts that occur only once, are ongoing as long as the expenditures continue to be made.
Economic activity is measured on the basis of industry output, or the value of the production
necessary to address the demand for the subject activity. The value of production is equal to the
total cost of the production plus any profit.
In order to gauge to overall operating period economic impacts of the subject project, it is necessary
to consider the impacts from both the commercial activity as well as the consumer spending
patterns that will occur as a result of the township’s new residents. A summary of the assumptions
that RPRG generated as the inputs for the IMPLAN model are presented for both the BOR and TND
Scenarios below. All input assumptions are calculated according to the average sales per square foot
figures for the eastern portion of the United States that are published by the Urban Land Institute’s
Dollars and Cents for Shopping Centers manual, which is recognized as an authority in the
commercial leasing field or using the employment ratios that are native to the IMPLAN model for
Dauphin County.
1.
Business-Office-Residential (BOR) Zoning Scenario Assumptions
COMMERCIAL OPERATIONS
Table 15 illustrates the Vartan Group’s BOR leasing scenario along with the estimated annual gross
sales that are used as inputs in the IMPLAN model to estimate the economic impacts resulting for
the subject’s commercial functions. It is important to note that the estimated direct employees in
the inputs will not necessarily equal the number of direct employees ultimately calculated by the
IMPLAN model, as the model is based predominantly upon trade flow dollars.
Table 15 BOR Scenario Inputs - Projected Tenants and Estimated Annual Sales
Estimated
SqFt
Use
Estimated
Estimated
Annual Gross
Direct
Sales ($000s) Employees
General Occupancy Office
75,000
$26,655
Commercial Banking
6,400
$6,939
400
42
Pharmacy
12,000
$1,105
15
Medical Office
10,800
$4,590
40
Total/Average
104,743
$39,289
497
Source: ULI Dollars & Cents for Shopping Centers (2008);
IMPLAN (Dauphin County, 2013); Vartan Group; RPRG
Pag e 13
Vartan Group - 2615 Linglestown Road | Economic Impacts
RESIDENT SPENDING
The other category of economic activity associated with the BOR Scenario relates to household
spending by future residents of the project’s 408 rental apartment units. To test the impact of
household spending from the project’s residents, we first needed to determine a reasonable
estimate of aggregate household income for all residents in the building. The aggregate household
income was estimated by applying standard underwriting ratios to the gross rent burden for each
unit type. For market rate rental units, the rent burden was computed using a range from 20
percent to 33 percent of income spent on housing costs. Based upon existing Class A apartments in
the Harrisburg area, RPRG arrived at a net rent of $1,000 for a one bedroom unit and $1,300 for a
two bedroom unit. The price of rent includes the price of water/sewer and trash collection. Total
housing costs include both the proposed rent for the units as well as an allowance for tenant paid
utilities. RPRG assumed a tenant utility allowance of $95 for one-bedroom units and $120 for twobedroom units. RPRG assumed the midpoint between the minimum and maximum income to be the
basis for aggregate household income among tenants who will reside in the 408 market rate units at
the proposed development. As shown in Table 16, the estimated aggregate household income of
408 future households assuming 100 percent occupancy is approximately $23.4 million. Allowing
for a five percent residential vacancy rate, per industry standard, the aggregate annual household
income would be reduced to $22.3 million. This $22.3 million of household income is included in the
analysis of the project’s operating period impacts to the township’s economy and serves as the basis
for the calculation of induced impacts resulting from new consumer spending power.
Table 16 Estimated Aggregate Household Income
Unit
Count
Rent
Gross
Rent
Min
Income
33%
Max
Income
20%
One Bedroom
286
$1,000
$1,095
$39,818
$65,700
$52,759
Two Bedroom
122
$1,300
$1,420
$51,636
$85,200
$68,418
408
$1,090
$1,192
Unit Type
Gross Potential Rent
Less: Vacancy at 5%
Effective Gross Income of Subject Renter Households
Avg
Income
per Unit
Aggregate
Income
($000s)
$15,089
$8,347
$23,436
-$1,172
$22,264
Pag e 14
Vartan Group - 2615 Linglestown Road | Economic Impacts
2.
Traditional Neighborhood Development Zoning Scenario Assumptions
COMMERCIAL OPERATIONS
Table 17 illustrates the Vartan Group’s TND leasing scenario along with the estimated annual gross
sales that are used as inputs in the IMPLAN model to estimate the economic impacts resulting for
the subject’s commercial functions.
Table 17 TND Scenario Inputs - Projected Tenants and Estimated Annual Sales
Use
Commercial - TND Proposal
Covenience Store/Gas Station
Extended Stay Hotel
Quick Service Restaurant
Bank w/ 3 Drive-thru Lanes
Full Service Restaurant
Pharmacy w/ Drive-thru Lane
Medical Clinic
Street Level Retail/Restaurant
2nd Floor Commercial/Office
Commercial - TND Total
Community Spaces
Community Center & Pool
Central Green Space
Community Spaces Total
Total - TND Commercial
Estimated
Estimated
SqFt /
Annual
Direct
Rooms Gross Sales
Employees
($000s)
6,000
110
3,200
3,000
6,000
12,000
10,000
40,000
20,000
100,856
$1,714
$3,895
$1,615
$3,238
$1,640
$1,105
$4,590
$14,955
$7,197
$39,948
8
43
29
20
33
15
40
60
108
356
---100,856
N/A
N/A
10
2
12
368
-$39,948
RESIDENT SPENDING
The other category of economic activity associated with the TND Scenario relates to household
spending by future residents of the project’s 180 units of owner-occupied housing and the 96 agerestricted rental apartment units. Identical to the BOR residential scenario, we first needed to
determine a reasonable estimate of aggregate household income for all residents in the community.
For the single family units that are expected to be owner-occupied, we conducted an affordability
analysis to estimate average household incomes based upon the average sale prices (Table 18).
Assuming a 20 percent down payment on 30-year fixed-rate mortgage at 4.5% interest, RPRG
estimated the monthly payment for the three types of owner occupied housing inclusive of property
taxes and assuming a $150 monthly HOA fee for community amenities such as the swimming pool.
Pag e 15
Vartan Group - 2615 Linglestown Road | Economic Impacts
Table 18 Estimated Housing Payments for Owner Occupied Units
Product
Base Price
% Down Payment
$ Down Payment
Term
Interest Rate
Local Property Tax Rate
HOA Fee
Montly Payment
SFD
$316,300
20%
$63,260
30
4.50%
2.75
$150
$2,198
Townhouse
$194,000
20%
$38,800
30
4.50%
2.75
$150
$1,406
Duplex
$250,000
20%
$50,000
30
4.50%
2.75
150
$1,769
The aggregate gross income for owner households was estimated by applying slightly stricter
standards than the underwriting ratios used to determine renter household income. The minimum
income is based upon 30 percent of income for the gross monthly mortgage payment of principal,
interest, taxes and insurance (PITI). Maximum income is artificially capped at 18 percent of the
annual income for PITI. Just as in the BOR analysis, RPRG assumed the midpoint between the
minimum and maximum income to be the basis for aggregate household income among those who
will reside in the 180 owner occupied homes at the proposed development. The proposed 180
owner occupied units in the TND Scenario would produce an aggregate household income of $15.8
million (Table 19).
Table 19 Estimated Aggregate Household Income
Unit Type
Unit
Count
Estimated
Mortgage
or Rent
Gross
Rent
Min
Income*
Max Income
**
Avg
Income
per Unit
Aggregate
Income
($000s)
For Sale Units
Single Family Detached
40
$2,198
$2,198
$87,920
$146,530
$117,225
Townhouse
110
$1,406
$1,406
$56,240
$93,730
$74,985
$8,248.350
Senior Duplex
30
$1,769
$1,769
$70,760
$117,930
$94,345
$2,830.350
$87,598.33
$15,767.700
Estimated Gross Income of
Owner Households
180
$4,689.000
Multifamily Rental Units
1 BR - Age Restricted
67
$1,000
$1,095
$39,818
$65,700
$52,759
$3,534.859
2 BR - Age Restricted
29
$1,300
$1,420
$51,636
$85,200
$68,418
$1,984.127
$57,489.44
$5,518.986
Estimated Gross Income of
Rental Households
96
Less: Vacancy at 5%
-$275.949
Effective Gross Income
$5,243.037
Total Estimated Household Income
$21,010.737
* Minimum income is assumed to be 30% of gross mortgage or 33% of gross rent.
** Maximum income is artificially capped at 18% of gross mortgage or 20% of gross rent.
The aggregate household income for the rental units was estimated by applying the same standard
underwriting ratios and same gross rents as in the BOR analysis. The estimated aggregate household
income of the 96 senior renter households assuming 100 percent occupancy is approximately $5.5
million. Allowing for a five percent residential vacancy rate, per industry standard, the aggregate
annual household among owner and renter occupied units would be $21.0 million, which serves as
the basis for the calculation of induced impacts resulting from new consumer spending power.
Pag e 16
Vartan Group - 2615 Linglestown Road | Economic Impacts
3.
Operation Period Economic Impacts
This analysis will measure how the operations of the BOR and TND scenarios will impact the
Susquehanna Township economy (and Dauphin County by extension) during their fully stabilized
operational period. Most of these impacts are expected to be new additions to the economy, and
therefore considered economic impacts as opposed to economic contributions. Operating period
impacts are expressed on an annual basis and, unlike construction period impacts that occur only
once, are ongoing as long as the operating expenditures and sales continue to be made. Economic
activity is measured on the basis of industry output, or the value of the production necessary to
address the demand for the subject activity. The value of production is equal to the total cost of the
production plus any profit. The operating period impacts are derived from the expenditures made
by the commercial and residential tenants at the Linglestown Road site to provide value, including
both employee compensation and the purchase of goods and services.
Table 20 summarizes the overall annual impacts to the Susquehanna Township economy that are
expected to result from the operations of the Linglestown Road project at stabilization. The BOR
scenario, with approximately 75,000 square feet of office space, would be expected to have an
annual estimated impact of $39.3 million in direct economic output to the Susquhanna Township
economy. Total output, including direct, indirect and indirect impacts are estimated to be $43.2
million. The total impact to employment is estimated to be 528 jobs and the total impact to value
added is $27.9 million, of which $24.9 million is attributable to employee compensation.
Table 20 Operating Period Impacts
Direct Impact - Total Output ($000s)
By-Right
(BOR)
Zoning
TND
Scenario
$39,289
$28,268
$43,238
$31,384
Total Economic Impact
Total Output ($000s)
Total Employment (All Jobs)
Total Value Added ($000s)
Total Employee Compensation ($000s)
528
392
$27,870
$19,076
$24,942
$15,250
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
The TND Scenario, with a variety of different uses, would be expected to have an annual estimated
impact of $28.3 million in direct economic output to the Susquhanna Township economy. Total
output, including direct, indirect and indirect impacts are estimated to be $31.4 million. The total
impact to employment is estimated to be 392 jobs and the total impact to value added is $19.1
million, of which $15.3 million is attributable to employee compensation.
Pag e 17
Vartan Group - 2615 Linglestown Road | Economic Impacts
Table 21 breaks out the total impact on industry output during operations of the different scenarios.
The operation of BOR Scenario is expected to have an impact of $43.2 million of output to the
township economy, of which $39.3 million is direct output from the site’s tenants, management,
and household consumer spending, while $1.1 million is indirect output and $2.8 million is induced
output. The operation of the TND Scenario is expected to have a total industry impact of $31.4
million, with $28.2 million being direct output within the township.
Table 21 Operating Period Contributions to Economic Output
By-Right
(BOR)
Zoning
TND
Scenario
Direct Impact to Output
$39,289
$28,268
Indirect Impact to Output
$1,135
$881
Induced Impact to Output
$2,814
$2,234
Total Industry Output ($000s)
$43,238
$31,384
Impacts to Industry Output ($000s)
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
Table 22 highlights the scenarios’ impact to value added throughout the township and county. The
BOR Scenario’s $27.9 million impact to value added includes a direct impact to value added of $25.5
million. The $19.1 million impact to value added of TND Scenario A includes $17.2 million of direct
impact to value added.
Table 22 Operating Period Contributions on Value Added
By-Right
(BOR)
Zoning
TND
Scenario
$25,490
$17,185
Impact to Value Added ($000s)
Direct Impact to Value Added
Indirect Impact to Value Added
$663
$529
Induced Impact to Value Added
$1,717
$1,362
$27,870
$19,076
Total Value Added ($000s)
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
As part of value added, Table 23 identifies the direct, indirect and induced impacts to total
employee wages expected during the operations of the different scenarios. As with the construction
impact analysis, RPRG has adjusted the employment compensation contributions from IMPLAN to
isolate employee wages. RPRG estimates that the BOR Scenario at full stabilization will have a total
impact to employee wages of $20.9 million in the township, of which $19.9 million is direct. At
stabilization, the TND Scenario is estimated to have a total impact on employee wages of $12.7
million, of which $11.9 million is direct impact.
Pag e 18
Vartan Group - 2615 Linglestown Road | Economic Impacts
Table 23 Operating Period Contributions on Employment Compensation
By-Right
(BOR)
Zoning
TND
Scenario
$23,661
$14,232
Impact to Employment Compensation ($000s)
Direct Impact to Emp Compensation
Indirect Impact to Emp Compensation
$374
$298
Induced Impact to Emp Compensation
$907
$720
$24,942
$15,250
Total Emp Compensation ($000s)
Blended Ratio of Wages($) to Emp Compensation($)
Direct Impact
0.839
0.835
Indirect Impact
0.836
0.838
Induced Impact
0.845
0.841
$19,852
$11,884
Contributions to Employee Wages ($000s)
Direct Impact to Employee Wages
Indirect Impact to Employee Wages
$313
$250
Induced Impact to Employee Wages
$766
$606
$20,930
$12,739
Total Employee Wages ($000s)
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
Table 24 identifies the direct, indirect and induced contributions to total employment that are
expected during the stabilized operations of the subject’s development scenarios. As with the
construction period impacts, RPRG has adjusted the IMPLAN model estimates to reflect employment
contributions on a FTE (full-time equivalent) job basis. On an annual basis, RPRG estimates that
operations of the BOR Scenario will support 467 total FTE jobs, 439 of which will be direct. The TND
Scenario is expected to have a total FTE impact of 350 jobs, of which 329 will be direct.
Table 24 Operating Period Contributions on Employment
By-Right
(BOR)
Zoning
TND
Scenario
497
368
Impact on Employment (All Jobs)
Direct Impact on Employment
Indirect Impact on Employment
9
6
Induced Impact on Employment
22
18
528
392
Total Employment (All Jobs)
Blended Ratio of FTE to Full and Part-Time Jobs
Direct Impact
0.883
0.894
Indirect Impact
0.919
0.896
Induced Impact
0.908
0.888
439
329
Impact on Full Time Equivalent (FTE) Jobs
Direct Impact on FTE Jobs
Indirect Impact on FTE Jobs
8
6
Induced Impact on FTE Jobs
20
16
467
350
Total FTE Jobs
NOTE: 2015 Dollars
Sources: RPRG; IMPLAN (Dauphin County, PA - 2013)
Pag e 19
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
IV. FISCAL IMPACTS
A. Methodology
The direct, indirect and induced economic impacts, or contributions, of the operations of the
different potential development scenarios at the Linglestown Road site, as quantified in the previous
section will contribute to the finances of three taxing districts: Dauphin County, Susquehanna
Township, and the Susquehanna Township School District.
The fiscal impact analysis involves estimating the extent to which the subject project and its
occupants will affect local government revenues and expenditures. The analysis includes estimating
payments made between the project and the local government, such as property taxes or
operational subsidies. In addition, the analysis estimates any tax revenue, such as income or sales
taxes, which can be applied to the economic impacts computed in Section III of this report. The final
piece of the fiscal impact analysis estimates the impact of the project on miscellaneous revenue and
expenditures of local government, such as parking violations and excise taxes, which cannot be
directly attributed to the project, but are assumed to be affected by the economic activity
supported by the project.
RPRG reviewed the most recent audited financial statements from each of the three taxing
jurisdictions, all of which reflected FY 2013, to identify the sources of revenue and uses of
expenditures. More than half of the Township’s revenue comes from local taxes, which include
property and incomes taxes comprising 23 percent and 17 percent of the Township’s revenue,
respectively. County taxes account for more than one third of the county’s revenue, with a large
percentage also coming from intergovernmental grants from the state. Local taxes account for 80
percent of the school district’s revenue, with the remaining portion coming from state and federal
grants. Real estate taxes account for 56 percent of the school district’s revenue.
A fundamental assumption of this analysis is that demand for government services (and government
revenue sources) have constant returns to scale. This means that if the quantities of units of
government demand such as the number of residents or the number of businesses changes,
government revenue and expenditures will change on a pro-rata basis. To estimate this,
government revenues and expenditures are attributed to residents or residents and businesses
(which includes individuals who work in the township but do not live there), based upon the primary
means of revenue generation. Resident-based revenues, such as property taxes and the vast
majority of state aid, and resident-based expenditures, such as human services and housing, were
attributed to residents only. Revenues such as personal property taxes and charges, penalties, etc.,
and expenditures such as general government and public safety, were attributed to both residents
and businesses or non-resident workers, as each group consumes these services.
1.
Revenue
For the FY 2013, RPRG’s analysis found that revenues were divided in the aggregate between
residential, business/non-residential functions, and non-attributable fund transfers, respectively, on
the following bases for each jurisdiction listed in Table 25: Susquehanna Township (77% / 21% / 2%);
Dauphin County (63% / 34% / 3%); Susquehanna Township School District (62% / 18% / < 1%). In
Pag e 20
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
addition to the school district’s residential and non-residential revenue source, 20 percent the
revenue collected by the school district came in the form of state or federal grants that were directly
attributable to student enrollment based on funding formulas.
Table 25 Budgeted Revenues – Relevant Taxing Jurisdictions
Attributable to:
BUDGETED REVENUE ($000s)
Total Budget
Residents &
Business
Residents Only Students Only
Not
Attributable
Susquehanna Twp Audited Financial Report FY 2013
Local Taxes
Real Estate Taxes
4,926
1,409
3,518
-
-
Earned Income Tax
3,525
-
3,525
-
-
Local Services Tax
842
-
842
-
-
Occupation Tax
675
-
675
-
-
Real Estate Transfer Taxes
521
149
372
Per Capita Taxes
77
-
77
Parking Lot Tax
68
20
49
-
-
10,634
1,577
9,057
-
-
Charges for Services
440
103
338
-
-
Licenses, Permits, Fines & Forfeitures
704
201
503
-
-
Interest, Rents, and Royalties
External Funds
121
121
-
-
-
Total Local Tax Revenue
Federal Grants
State Grants
Local Government Units
Other Financing Sources
Percentage of Revenue Generated
-
39
-
39
-
-
1,403
199
836
-
367
Unclassified Operating Revenues
Total Susquehanna Twp Revenue ($000s)
-
93
27
66
-
-
555
162
393
-
-
7,013
2,003
5,000
-
10
21,002
4,393
16,231
-
378
100%
20.9%
77.3%
0.0%
1.8%
Source: PA Dept of Comm & Econ Development - Governor's Center for Local Government Services (2013)
Dauphin County Audited Financial Statement FY 2013
County Taxes
Property Taxes
Hotel Taxes
100,610
39,640
60,970
-
-
9,725
9,725
-
-
-
992
992
-
-
-
111,327
50,357
60,970
-
-
In Lieu of Taxes
Total County Tax Revenue
Charges for Services
Operating Grants & Contributions
Unrestricted Investment Earnings
Incinerator Settlement minus Debt
Other Financing Sources incl. Transfers
Existing Fund Balance
Total Dauphin County Revenue ($000s)
Percentage of Revenue Generated
27,014
9,154
17,860
-
-
120,475
28,908
91,568
-
-
324
324
-
-
-
1,002
10,649
1,002
315
1,979
-
8,355
36,994
14,576
22,419
-
-
307,786
104,636
194,795
-
8,355
100%
34.0%
63.3%
0.0%
2.7%
Source: Dauphin County
Susqehanna Twp School District Audited Financial Statement FY 2013
Local Revenue
Real Estate Taxes
Other Taxes
24,506
7,009
17,497
-
9,600
729
8,871
-
-
799
101
174
511
14
34,905
7,838
26,542
511
14
8,087
150
374
7,563
-
677
-
-
677
-
43,669
7,988
26,916
8,751
14
Other Local Revenue Sources
Total Local Revenue
State Sources
Federal Sources
Total School District Revenue ($000s)
Percentage of Revenue Generated
100%
18.3%
61.6%
20.0%
-
0.0%
Source: Susquehanna Township SD
Pag e 21
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
2.
Expenditures
A similar analysis was completed for budgeted expenditures on Table 26. For the FY 2013, RPRG’s
analysis found that expenditures were divided in the aggregate between residential and
business/non-residential functions, respectively, on the following bases for each jurisdiction:
Susquehanna Township (68% / 29% / 3% ); Dauphin County (75% / 20% / 5%). RPRG considered 100
percent of the school district’s $42 million of expenditures attributable exclusively to students.
Table 26 Budgeted Expenditures – Relevant Taxing Districts
Attributable to:
BUDGETED EXPENDITURES ($000s)
Total Budget
Residents &
Business
Residents Only Students Only
Not
Attributable
Susquehanna Twp Audited Financial Report FY 2013
General Government
Public Safety
868
197
671
-
7,901
1,795
6,106
-
-
131
-
131
-
-
Health & Human Services
Public Works - Sanitation
Public Works - Highways & Streets
-
36
8
28
-
-
2,418
549
1,869
-
-
Culture and Recreation
389
-
389
-
-
Debt Service
1,076
244
832
-
-
Capital Projects
1,517
1,483
34
-
-
447
-
-
-
447
Interfund Operating Transfers
Total Local Government Expenditures ($000s)
Percentage of Attributable Expenditures
14,782
100%
4,277
28.9%
10,059
68.0%
0.0%
447
3.0%
Source: PA Dept of Comm & Econ Development - Governor's Center for Local Government Services (2013)
Dauphin County Audited Financial Statement FY 2013
General Government
20,607
7,384
12,380
-
843
Judicial
59,454
11,250
46,221
-
1,983
Public Safety
Public Works
39,312
14,316
22,734
-
2,261
1,194
471
724
-
-
105,886
-
95,590
-
10,295
-
Human Services
Culture & Recreation
12,131
-
12,131
-
Conservation & Development
18,761
14,827
3,934
-
-
184
73
112
-
-
49,168
12,162
37,007
-
-
1,088
269
819
Bond Issuance Costs
Debt Service
Capital Projects
Total County Expenditures ($000s)
Percentage of Attributable Expenditures
307,785
100%
60,750
19.7%
231,651
75.3%
0.0%
15,383
5.0%
Susqehanna Twp School District Audited Financial Statement FY 2013
Instruction
25,689
-
-
25,689
Support Services
11,772
-
-
11,772
-
824
-
-
824
-
3,748
-
-
3,748
-
Noninstructional Operations
Other Expenditures & Financing
Total School District Expenditures ($000s)
Percentage of Attributable Expenditures
42,033
100%
0.0%
0.0%
-
42,033
100%
0.0%
Pag e 22
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
3.
Units of Government Demand
RPRG used population estimates as referenced from the US Census Bureau and data on industry
employment from the Bureau of Labor Statistics and the Census Bureau to compute the base
number of demand units for both residents and residents/businesses. As a proxy for businesses and
business activity, RPRG utilized total jobs. The number of enrolled students in the Susquehanna
Township School District functions as the demand unit for public education. The estimated 2014
population for Susquehanna Township is 24,565. Dauphin County’s 2014 population is 273,276.
Using the total at-place employment trends, RPRG estimates that total employment in Susquehanna
Township as of 2014 is 18,706 workers, while Dauphin County contains 176,220 workers (Table 27).
To avoid double counting, the number of township and county residents that also work in
Susquehanna Township or Dauphin County were subtracted to compute a total resident and job
base for each jurisdiction. Susquehanna Township’s resident and job base as of 2014 is estimated to
be 42,018, and Dauphin County’s is estimated to be 381,123 persons. Revenue per unit of
government demand is computed in Table 28 and expenditures per unit are computed in Table 29.
The revenue per unit was computed for each incremental job, resident and student. The
incremental revenue per job and per resident for each jurisdiction was computed both with
property taxes and without property taxes.
Table 27 Units of Government Demand
Susquehanna
Township
Dauphin
County
2014 Estimated Population
24,565
273,276
2013 Estimated Employment
18,706
176,220
6.7%
38.8%
Less Estimated Resident Workers
Estimated % of Resident Workers
-1,253
-68,373
2014 Resident and Job Base
42,018
381,123
2014 Resident Base
24,565
273,276
2014 Student Base
2,777
43,789
Sources: US Census Bureau; Esri; US Bureau of Labor Statistics; PA DOE; RPRG, Inc
Pag e 23
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
Table 28 Budgeted Revenue per Unit of Government Demand
Revenue per Unit
Residents &
Residents Only
Business
42,018
24,565
Total
Susquehanna Township Unit Base
Total Susquehanna Twp Revenue ($000s)
$
Per Job (Including Property taxes)
$
Per Job (Not including Property taxes)
Per Resident (Including Property taxes)
Per Resident (Not Including Property & Earned
Income taxes)
21,002
$
4,393
105
$
105 $
71 $
$
765 $
105
$
445 $
Dauphin County Unit Base
Total Dauphin County Revenue ($000s)
Per Job (including Property taxes)
$
307,786
$
16,231
$
661
71 $
381,123
374
273,276
Enrolled
Students
2,777
$
-
$
43,789
$
194,795 $
-
$
104,636
275 $
275
Per Job (Not including Property taxes)
$
$
171 $
987 $
171
Per Resident (Including Property taxes)
$
713
Per Resident (Not Including Property taxes)
$
764 $
275 $
42,018
490
24,565
$
2,777
$
26,916
$
8,751
$
2,967
$
2,967
275
Susquehanna Twp School District Unit Base
$
43,669
$
$
378
$
8,355
$
14
71
$
Total School District Revenue ($000s)
Per Job (including Property taxes)
Not
Attributable
$
7,988
190 $
190
Per Job (Not including Property taxes)
$
23 $
23
Per Resident (including property tax)
Per Resident (Not Including Property & Earned
Income taxes)
Per Enrolled Student (Non Local Sources)
$
1,286 $
190
$
1,096
$
46 $
23
$
22
$
2,967 $
-
$
-
Per Job (including Property taxes)
$
$
569 $
265 $
569
Per Job (Not including Property taxes)
Per Resident (Including Property taxes)
$
569
$
2,469
Per Resident (Not including Property taxes)
$
3,038 $
1,455 $
569
$
886
Per Enrolled Student (Non Local Sources)
$
2,967 $
-
$
-
COMBINED TAXING DISTRICT REVENUE PER UNIT
265
Table 29 Budgeted Expenditures per Unit of Government Demand
Expenditures per Unit
Residents &
Residents Only
Business
42,018
24,565
Total
Suquehanna Township Unit Base
Total Local Government Expenditures ($000s)
$
Per Job
$
Per Resident
$
14,782
$
4,277
102 $
511 $
102
Dauphin County Unit Base
Total County Expenditures ($000s)
$
Per Job
$
Per Resident
$
307,785
$
10,059
102 $
381,123
409
273,276
$
60,750
159 $
1,007 $
159
Suquehanna Township School District Unit Base
159
$
$
N/A
42,033
231,651
Enrolled
Students
2,777
$
-
- $
- $
-
-
-
$
15,383
$
42,033
$
-
848
2,777
Total School District Expenditures ($000s)
$
Per Job (Including Property Taxes)
$
Per Resident
$
Per Enrolled Student (Total)
$
15,136
$
15,136
Per Enrolled Student (Local Sources Only)
$
12,169
$
12,169
-
$
43,789
$
N/A
$
-
Not
Attributable
$
-
$
-
Pag e 24
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
B. Fiscal Impact Analysis
The fiscal impacts of the potential development scenarios on the three taxing districts are measured
as either direct or indirect. Direct fiscal impacts include payments made between the project and/or
users and the local government. For this analysis, direct fiscal impacts include property taxes and
earned income taxes payable by residents and the employees of tenant businesses. Direct fiscal
impacts also include the revenue and expenditures per job/resident applied to total direct
employment impacts calculated in the previous section. Indirect fiscal impacts include the revenue
and expenditures per job and per resident applied to the total indirect and induced employment
and residential impacts.
1.
Resident Yield
To estimate the count of residents and students that would occupy the residential sections of the
proposed development scenarios RPRG utilized residential multipliers developed by Rutgers
University for Pennsylvania households (Burchell 2006). RPRG estimates that the BOR Scenario
would yield 603 new residents, of which 23 would be school age children added to the Susquehanna
Township School District (Table 30). The TND Scenario is estimated to yield 520 new residents, 126
of which would be senior households in independent living duplex or apartment units. The TND
Scenario is estimated to add 30 student to the school district.
Table 30 Residential Yield & Student Generation
# of
Units
Residents
per Unit
Count of
Residents
Public
School
Students
per Unit
Count of
Students
1BR Apt - RENT
286
1.36
389
0.05
14
2BR Apt - RENT
122
1.75
214
0.07
9
Total - BOR
408
Unit Type & Tenure
BOR Zoning Scenario
603
23
TND Zoning Scenario
SFD - 3BR - OWN
20
2.82
56
0.41
8
SFD - 4BR - OWN
20
3.58
72
0.81
16
TH - 2BR - OWN
110
1.76
194
0.05
6
SR Duplex - 2BR - OWN
15
1.76
26
0
0
SR Duplex - 3BR - OWN
15
2.00
30
0
0
SR 1BR Apt - RENT
67
1.36
91
0
0
SR 2BR Apt - RENT
29
1.75
51
0
Total - TND
276
520
0
30
Source: Rutgers University: Burchell et al. (2006)
2.
Direct Property Taxes
In its current, unimproved state, the subject parcel enjoys the Clean and Green preferential tax
assessment from the state of Pennsylvania designed to encourage protection of farmland,
forestland, and open spaces. Changing the use through development of either proposed scenario
would void the preferential assessment and require the owner to pay six years of back taxes based
Pag e 25
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
upon the difference between what was paid under the preferential Clean and Green assessment
versus what would have been paid on the full assessed value plus 6% simple interest per year. Table
32 provides the calculation of the rollback taxes that the landowners would be responsible for in
upon removal from the Clean and Green program.
Table 31 Clean and Green Rollback Taxes Calculation
A
Assessed
Value
B
C
D
E
F
G
H
Tax Levy
Rollback
Unabated Preferential
Rollback
Rollback
on
Millage
Interest
Tax (A * B) Assessment Basis (C - D) Difference
Tax (F * G)
Factor
(E * B)
$4,141
$1,841
$9,754
$23,500
$23,500
$23,500
$549,600
$549,600
$549,600
$3,971
$1,766
$9,354
1.00
1.00
1.00
$3,971
$1,766
$9,354
Taxing Districts
Dauphin County
Susquehanna Twp
Susq Twp School Dist
$573,100 7.2260
$573,100 3.2126
$573,100 17.0200
2015 - Current Year
Dauphin County
Susquehanna Twp
Susq Twp School Dist
$573,100
$573,100
$573,100
$573,100
27.4586
7.2260
3.2126
16.4300
$15,737
$4,141
$1,841
$9,416
$23,500
$23,500
$23,500
$23,500
$549,600
$549,600
$549,600
$549,600
$15,091
$3,971
$1,766
$9,030
1.00
1.06
1.06
1.06
$15,091
$4,210
$1,872
$9,572
2014 - 1 Tax Year Prior
Dauphin County (2014)
Susquehanna Twp (2014)
Susq Twp School Dist (2014)
Dauphin County (2013)
Susquehanna Twp (2013)
Susq Twp School Dist (2013)
2013 - 2 Tax Years Prior
(Prorated 9 mos.)
Dauphin County
Susquehanna Twp
Susq Twp School Dist
$573,100
$573,100
$573,100
$573,100
$562,000
$562,000
$562,000
26.8686
7.2260
3.2126
16.4300
7.2260
3.2126
16.4300
$15,398
$1,035
$460
$2,354
$3,046
$1,354
$6,925
$23,500
$23,500
$23,500
$23,500
$16,800
$16,800
$16,800
$549,600
$549,600
$549,600
$549,600
$545,200
$545,200
$545,200
$14,767
$993
$441
$2,257
$2,955
$1,314
$6,718
1.06
1.12
1.12
1.12
1.12
1.12
1.12
$15,653
$1,112
$494
$2,528
$3,309
$1,471
$7,524
$562,000
$562,000
$562,000
$562,000
26.8686
7.2260
3.2126
16.4300
$15,175
$4,061
$1,805
$9,234
$16,800
$16,800
$16,800
$16,800
$545,200
$545,200
$545,200
$545,200
$14,678
$3,940
$1,752
$8,958
1.12
1.18
1.18
1.18
$16,440
$4,649
$2,067
$10,570
2012 - 3 Tax Years Prior
Dauphin County
Susquehanna Twp
Susq Twp School Dist
$562,000
$562,000
$562,000
$562,000
26.8686
7.2260
3.2126
16.4300
$15,100
$4,061
$1,805
$9,234
$16,800
$16,800
$16,800
$16,800
$545,200
$545,200
$545,200
$545,200
$14,649
$3,940
$1,752
$8,958
1.18
1.24
1.24
1.24
$17,286
$4,885
$2,172
$11,107
2011 - 4 Tax Years Prior
Dauphin County (2011)
Susquehanna Twp (2011)
Susq Twp School Dist (2011)
Dauphin County (2010)
Susquehanna Twp (2010)
Susq Twp School Dist (2010)
2010 - 5 Tax Years Prior
(Prorated 6 mos.)
Dauphin County
Susquehanna Twp
Susq Twp School Dist
$562,000
$562,000
$562,000
$562,000
$562,600
$562,600
$562,600
26.8686
7.2260
3.2126
15.9700
7.2260
3.2126
15.9700
$15,100
$2,031
$903
$4,488
$2,033
$904
$4,492
$16,800
$16,800
$16,800
$16,800
$16,800
$16,800
$16,800
$545,200
$545,200
$545,200
$545,200
$545,800
$545,800
$545,800
$14,649
$1,970
$876
$4,353
$1,972
$877
$4,358
1.24
1.30
1.30
1.30
1.30
1.30
1.30
$18,164
$2,561
$1,138
$5,659
$2,564
$1,140
$5,666
$562,600
$562,600
$562,600
$562,600
26.4086
7.2260
2.4126
15.9700
$14,850
$4,065
$1,357
$8,985
$16,800
$16,800
$16,800
$16,800
$545,800
$545,800
$545,800
$545,800
$14,406
$3,944
$1,317
$8,716
1.30
1.36
1.36
1.36
$18,728
$5,364
$1,791
$11,854
2009 - 6 Tax Years Prior
$562,600 25.6086
$14,407
$16,800
$545,800
$13,977
1.36
$19,009
Total Rollback Taxes by District
Dauphin County
Susquehanna Twp
Susq Twp School Dist
TOTAL ROLLBACK TAXES
$28,614
$12,271
$64,881
$105,767
$27,655
$11,859
$62,703
$102,217
$32,624
$13,911
$73,836
$120,371
Pag e 26
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
Table 32 provides an estimated aggregate tax levy for each scenario isolated according to residential
and commercial uses. RPRG assumes that the market value for the new structures is equal to the
estimated construction costs of each scenario. According to the State Tax Equalization Board, the
ratio of assessed value to market value in Susquehanna Township is 84.93%. Property taxes levied
according to the millage per $1,000 of assessed value. The estimated property tax levies is applied
to both commercial and residential uses for each of the three taxing districts below and serves as a
revenue line item in the forthcoming fiscal impact analysis.
Table 32 Property Tax Levy by Scenario and Land Use
Market Value
Assessed Value (84.93%)
Tax
BOR Scenario
Residential
Commercial
$63,065,117
$18,759,538
$53,561,204
$15,932,476
TND Scenario
Residential
Commercial
$63,768,800
$42,710,108
$54,158,842
$36,273,695
Mills
County Real Estate
6.876
$368,287
$109,552
$372,396
County Library
0.35
$18,746
$5,576
$18,956
County Total
$387,033
$115,128
$391,352
Township Real Estate
2.598
$139,152
$41,393
$140,705
Fire Protection/Hydrant
0.6146
$32,919
$9,792
$33,286
Township Total
$172,071
$51,185
$173,991
Susquehanna Twp SD
17.02
$911,612
$271,171
$921,783
School District Total
$911,612
$271,171
$921,783
Sources: PA State Tax Equalization Board; Dauphin County Tax Assessment; RPRG
3.
$249,418
$12,696
$262,114
$94,239
$22,294
$116,533
$617,378
$617,378
Earned Income Tax
Revenue generated from the Earned Income Tax is dedicated to the budgets for the municipality
(Susquehanna Township) and the Susquehanna Township School District. The earned income tax for
Susquehanna Township residents is 1.0 percent, with half going to each jurisdiction. Based upon the
estimated employee wages generated by the proposed development scenarios, RPRG calculated the
estimated earned income tax under the assumption that only 6.737 percent of all jobs in the township
are occupied by township residents. Using this assumption, RPRG generated the basis for earned income
tax levy and subsequently distributed the revenue to the two jurisdictions (Table 33).
Table 33 Earned Income Tax Calculation
Earned Income Tax Revenue
A
B
C
D
Estimated Employee Wages
Proportion of Resident Workers
Estimated Local Wages (A * B)
Earned Income Tax Rate
BOR
Scenario
TND
Scenario
$20,930,286
$12,738,878
6.7370%
6.7370%
$1,410,073
$858,218
0.5%
0.5%
E
Susquehanna Twp Revenue (C * D)
$7,050
$4,291
F
School District Revenue (C * D)
$7,050
$4,291
Pag e 27
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
4.
Local Services Tax (LST) & Per Capita Tax
Local services taxes are levied on workers in a jurisdiction to cover the cost of government services
for non-resident workers. Employees who work in Susquehanna Township are liable for annual LST
of $47. The township adds this revenue or a pro-rata basis of at-place employees. The estimated LST
generated by the proposed scenarios are revenue line items in the forthcoming fiscal analysis table
for the township.
All adult residents of Susquehanna Township are required to pay a Per Capita Tax of $5 regardless of
employment status or place of employment. This tax is added on a pro-rata basis as a revenue line in
the forthcoming fiscal analysis table.
5.
Fiscal Impacts
The estimated Clean and Green Rollback Tax is the first entry in the calculation of fiscal impacts on
Susquehanna Township of the proposed development scenarios in Table 34. This, along with the
other local taxes and fees generated by the employees and residents at the proposed development
comprise the direct fiscal impacts to the revenue stream of Susquehanna Township. Additional
direct revenue impacts include the pro-rata increase in revenue for each onsite job and resident.
Combined, the estimated total direct revenue generated by the operations of the BOR development
scenario is nearly $574,000 in the first year that the site is no longer eligible for the Clean and Green
preferential assessments. As the indirect revenue impact is based on indirect/induced job impacts
or spin-off jobs created offsite, the impact per job includes a provision for property taxes. The total
revenue impact of operations for the BOR development scenario is estimated to be $579,000 the
first year that the without the Clean and Green benefit (Year 1). Year 1 revenue impacts for the TND
Scenario is estimated to be approximately $589,000. After Year 1, the Rollback Taxes will no longer
be levied. In Years 2 and beyond, total revenue for the BOR Scenario is estimated to be $565,000
and $575,000 for the TND Scenario. Expenditures are applied on a pro-rata basis reflecting the
estimated growth in jobs and residents in the township as a result of the development of the
subject.
In Year 1, both of the development scenarios are estimated to produce a net fiscal surplus for
Susquehanna Township. The BOR Scenario is estimated to produce a net fiscal surplus of
approximately $217,000 and the TND Scenario is estimated to produce a net fiscal surplus of
$283,000. After the Rollback Taxes have been remitted, the BOR Scenario is estimated to have an
annual fiscal impact of $203,000 on the Township while the TND Scenario is estimated to have a net
fiscal impact of approximately $270,000 annually.
A separate fiscal impact analysis for Susquehanna Township School District is presented in Table 35.
The BOR and TND Scenarios would produce an estimated annual fiscal surplus between $1.01
million to $1.28 million during Year 1 based upon student generation estimates. After satisfying the
Rollback Taxes, the BOR Scenario is estimated to produce an annual fiscal impact of approximately
$937,000, while the average annual TND Scenario would produce as a net fiscal surplus of
approximately $1.2 million.
Pag e 28
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
Table 34 Fiscal Impacts to Susquehanna Township
Source
per Unit
Amount
Basis
REVENUE
Direct Revenue Impacts
Clean and Green Rollback Taxes
see calc
Susquehanna Twp
Real Estate Taxes
see calc
Susquehanna Twp
Earned Income Tax
see calc
Susquehanna Twp
Local Services Tax (Per Worker)
$47
x Direct Jobs at Stabilization
Per Capita Tax
$5
x New Adult Residents
Township Revenue impact per direct job*
$71
x Direct Jobs
Direct Revenue impact per resident**
$445
x Project Residents
SUBTOTAL Direct Revenue contribution
Indirect Revenue Contribution
Revenue impact per indirect/induced job
$105
x Twp Indirect/Induced Jobs
Local Services Tax (Per Worker)
$47
x Jobs at Stabilization
SUBTOTAL Indirect Revenue contribution
Total Revenue Impacts
* Not including property tax **Not including property tax or income tax
EXPENDITURES
Direct Expenditure Impacts
Expenditure impact per direct job
$102
x Direct Jobs
Expenditure impact per direct resident
$511
x Project Residents
Subtotal Direct Expenditure Impacts
Indirect Expenditure Impacts
Expenditure Impact per indirect/induced job
Subtotal Indirect Revenue Impact
Total Expenditure Impact
Surplus / (Deficit) to Local Government
$102
x District Indirect/Induced Jobs
BOR
---497
551
497
603
TND
---368
472
368
520
31
31
BOR
Scenario
TND Scenario
BOR
Scenario
TND Scenario
A
Year 1 w/
Rollback
Year 1 w/
Rollback
PostRollback
PostRollback
$13,911
$223,255
$7,050
$23,359
$2,757
$35,293
$268,371
$573,997
$13,911
$290,524
$4,291
$17,285
$2,361
$26,116
$231,431
$585,920
-$223,255
$7,050
$23,359
$2,757
$35,293
$268,371
$560,087
-$290,524
$4,291
$17,285
$2,361
$26,116
$231,431
$572,009
24
16
$3,247
$1,460
$4,707
$578,704
$2,524
$746
$3,271
$589,190
$3,247
$1,460
$4,707
$564,794
$2,524
$746
$3,271
$575,280
497
603
368
520
$50,587
$308,288
$358,875
$37,433
$265,854
$303,287
$50,587
$308,288
$358,875
$37,433
$265,854
$303,287
31
24
$3,161
$2,458
$3,161
$2,458
$3,161
$2,458
$3,161
$2,458
$362,036
$216,668
Pag e 29
$305,745
$283,445
$362,036
$202,757
$305,745
$269,535
Vartan Group – 2615 Linglestown Road | Fiscal Impacts
Table 35 Fiscal Impacts to Susquehanna Township School District
BOR
Scenario
Source
per Unit
Amount
REVENUE
Direct Revenue Impacts
Clean and Green Rollback Taxes
see calc
Residential Real Estate Taxes
see calc
Commercial Real Estate Taxes
see calc
Earned Income Tax
see calc
Other Local Revenue*
$46
Non-Local Grant Revenue
$2,967
SUBTOTAL Direct Revenue contribution
Total Revenue Impacts
* Not including property tax or income tax
EXPENDITURES
Direct Expenditure Impacts
Expenditure impact per Student
$15,136
Total Expenditure Impact
Surplus to Taxing District
Year 1 w/
Rollback
Basis
Susq Twp School District
Susq Twp School District
Susq Twp School District
Susq Twp School District
x Project Residents
x Projected Students
x Projected Students
BOR
----603
23
TND
----520
30
23
30
TND Scenario BOR Scenario TND Scenario
Year 1 w/
Rollback
Post-Rollback Post-Rollback
$73,836
$911,612
$271,171
$7,050
$27,511
$68,246
$1,359,426
$1,359,426
$73,836
$921,783
$617,378
$4,291
$23,724
$89,017
$1,730,030
$1,730,030
-$911,612
$271,171
$7,050
$27,511
$68,246
$1,285,590
$1,285,590
-$921,783
$617,378
$4,291
$23,724
$89,017
$1,656,194
$1,656,194
$348,128
$454,079
$348,128
$454,079
$348,128
$454,079
$348,128
$1,011,298
$1,275,950
Pag e 30
$937,462
$454,079
$1,202,114
Vartan Group – 2615 Linglestown Road | Underlying Assumptions and Limiting Conditions
V. CONCLUSIONS ON IMPACTS
CONSTRUCTION OF DEVELOPMENT SCENARIOS
Construction of the TND Scenario would produce greater overall economic impact than the
construction period of the BOR Scenario due to the greater diversity of uses that would need to be
constructed. Land development and construction costs for four separate types of residential
structures will be different from those dedicated to a single multifamily structure on a single parcel.
Additionally, the variety of different commercial structures and uses associated with the TND
Scenario will be more labor intensive than the limited number of structures and uses associated
with the BOR Scenario. In light of this, each scenario will produce similar overall wages as the
construction of multifamily structures and multiple story commercial buildings tend to require more
higher-skilled tradesman than single-story commercial construction which utilizes more unskilled
labor.
COMMERCIAL & RESIDENTIAL OPERATIONS
Commercial operations in the BOR Scenario will be more intense than commercial operations in the
TND Scenario. Stabilized operations of the BOR Scenario will be more focused upon the general
occupancy office tenants than the diversity of retail uses in the TND Scenario. The BOR Scenario’s
75,000 square feet of office space is the primary commercial driver, producing approximately onethird more total jobs than the TND scenario.
Estimated household income per TND residential household is expected to be 40 percent higher
than the average estimated household income in the BOR residential units. Approximately 65
percent of the TND residential units are expected to be owner occupied, whereas all 408 multifamily
units in the BOR Scenario are expected to be renter occupied. The 96 multifamily units in the TND
Scenario are dedicated to senior independent living households, which tend to be “renters by
choice” and therefore generally produce household incomes than the overall average income of
renter households.
FISCAL IMPACTS ON TAXING DISTRICTS
The net fiscal surplus that the Township and School District would enjoy from either development
scenario relies upon the revenue generated from the increased intensity of commercial uses,
residential household incomes, and the limited number of school aged children that are expected to
attend the public schools due to the structure types and age restrictions in the proposed
developments.
Pag e 31
Vartan Group – 2615 Linglestown Road | Underlying Assumptions and Limiting Conditions
APPENDIX 1 UNDERLYING ASSUMPTIONS AND LIMITING CONDITIONS
In conducting the analysis, we will make the following assumptions, except as otherwise noted in
our report:
1. There are no zoning, building, safety, environmental or other federal, state or local laws,
regulations or codes which would prohibit or impair the development, marketing or operation of the
subject project in the manner contemplated in our report, and the subject project will be developed,
marketed and operated in compliance with all applicable laws, regulations and codes.
2. No material changes will occur in (a) any federal, state or local law, regulation or code
(including, without limitation, the Internal Revenue Code) affecting the subject project, or (b) any
federal, state or local grant, financing or other program which is to be utilized in connection with the
subject project.
3. The local, national and international economies will not deteriorate, and there will be no
significant changes in interest rates or in rates of inflation or deflation.
4. The subject project will be served by adequate transportation, utilities and governmental
facilities.
5. The subject project will not be subjected to any war, energy crisis, embargo, strike, earthquake,
flood, fire or other casualty or act of God.
6. The subject project will be on the market at the time and with the product anticipated in our
report, and at the price position specified in our report.
7. The subject project will be developed, marketed and operated in a highly professional manner.
8. No projects will be developed which will be in competition with the subject project, except as
set forth in our report.
9. There are neither existing judgments nor any pending or threatened litigation, which could
hinder the development, marketing or operation of the subject project.
Pag e 32
Vartan Group – 2615 Linglestown Road | Underlying Assumptions and Limiting Conditions
The analysis will be subject to the following limiting conditions, except as otherwise noted in our
report:
1. The analysis contained in this report necessarily incorporates numerous estimates and
assumptions with respect to property performance, general and local business and economic
conditions, the absence of material changes in the competitive environment and other matters.
Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events
and circumstances may occur; therefore, actual results achieved during the period covered by our
analysis will vary from our estimates and the variations may be material.
2. Our absorption estimates are based on the assumption that the product recommendations set
forth in our report will be followed without material deviation.
3. All estimates of future dollar amounts are based on the current value of the dollar, without any
allowance for inflation or deflation.
4. We have no responsibility for considerations requiring expertise in other fields. Such
considerations include, but are not limited to, legal matters, environmental matters, architectural
matters, geologic considerations, such as soils and seismic stability, and civil, mechanical, electrical,
structural and other engineering matters.
5. Information, estimates and opinions contained in or referred to in our report, which we have
obtained from sources outside of this office, are assumed to be reliable and have not been
independently verified.
6. The conclusions and recommendations in our report are subject to these Underlying
Assumptions and Limiting Conditions and to any additional assumptions or conditions set forth in
the body of our report.
Pag e 33
Vartan Group – 2615 Linglestown Road | Analyst Resumes
VI. APPENDIX 2 ANALYST RESUMES
Robert M. Lefenfeld
Managing Principal
Mr. Lefenfeld is the Managing Principal of the firm with over 30 years of experience in the field of residential
market research. Before founding Real Property Research Group in February, 2001, Bob served as an officer
of research subsidiaries of the accounting firm of Reznick Fedder & Silverman and Legg Mason. Between 1998
and 2001, Bob was Managing Director of RF&S Realty Advisors, conducting market studies throughout the
United States on rental and for sale projects. From 1987 to 1995, Bob served as Senior Vice President of Legg
Mason Realty Group, managing the firm’s consulting practice and serving as publisher of a Mid-Atlantic
residential data service, Housing Market Profiles. Prior to joining Legg Mason, Bob spent ten years with the
Baltimore Metropolitan Council as a housing economist. Bob also served as Research Director for Regency
Homes between 1995 and 1998, analyzing markets throughout the Eastern United States and evaluating the
company’s active building operation.
Bob oversees the execution and completion of all of the firm’s research assignments, ranging from a strategic
assessment of new development and building opportunities throughout a region to the development and
refinement of a particular product on a specific site. He combines extensive experience in the real estate
industry with capabilities in database development and information management. Over the years, he has
developed a series of information products and proprietary databases serving real estate professionals.
Bob has lectured and written extensively on the subject of residential real estate market analysis. He has
served as a panel member, speaker, and lecturer at events held by the National Association of Homebuilders,
the National Council on Seniors’ Housing and various local homebuilder associations. Bob serves as a visiting
professor for the Graduate Programs in Real Estate Development, School of Architecture, Planning and
Preservation, University of Maryland College Park. He has served as National Chair of the National Council of
Affordable Housing Market Analysts (NCAHMA) and is currently a board member of the Baltimore chapter of
Lambda Alpha Land Economics Society.
Areas of Concentration:
Strategic Assessments: Mr. Lefenfeld has conducted numerous corridor analyses throughout the United
States to assist building and real estate companies in evaluating development opportunities. Such analyses
document demographic, economic, competitive, and proposed development activity by submarket and
discuss opportunities for development.
Feasibility Analysis: Mr. Lefenfeld has conducted feasibility studies for various types of residential
developments for builders and developers. Subjects of these analyses have included for-sale single family and
townhouse developments, age-restricted rental and for-sale developments, large multi-product PUDs, urban
renovations, and continuing care facilities for the elderly. In addition, he has conducted feasibility work in
conjunction with Hope VI applications for redevelopment of public housing sites and analyses of rental
developments for 221(d)4 insurance and tax credit applications.
Information Products: Bob has developed a series of proprietary databases to assist clients in monitoring
growth trends. Subjects of these databases have included for-sale housing, pipeline information, and rental
communities. Information compiled is committed to a Geographic Information System (GIS), allowing the
comprehensive integration of data.
Education:
Master of Urban and Regional Planning; The George Washington University.
Bachelor of Arts, Political Science; Northeastern University.
Pag e 34
Vartan Group – 2615 Linglestown Road | Analyst Resumes
Patrick J. Dieter
Analyst
Patrick Dieter brings a background in statistical analysis and research methods to RPRG and its clients. Patrick
conducts rental market analysis for a variety of clients and development types. Additionally, he leads the
firm’s practice of economy and community development analysis related to investments in low-income and
distressed communities financed through the New Markets Tax Credit (NMTC) program. The NMTC studies
generate comprehensive illustrations of the economic, fiscal, and social impacts related to new capital
investments in underserved areas.
Patrick has authored studies for residential, commercial, medical, educational, and industrial developments in
communities located throughout the United States, with extensive experience in Maryland, Virginia, Delaware,
and Michigan.
Prior to joining RPRG, Patrick served as a research analyst for a joint-study between the Environmental
Protection Agency, Federal Highway Administration, and Graham Institute of Sustainability to develop
innovative statistical methods for measuring the effectiveness of transportation and land use mechanisms on
regional development.
Areas of Concentration:
 Regional Rental Surveys: Patrick has served as the lead analyst for comprehensive rental housing surveys
to illustrate jurisdictional and regional market trends for multifamily and scattered site rental housing, market
demographics, supply and demand of rental units, and impediments to fair housing. Most recently, Patrick led
the comprehensive rental survey and analysis of the rental housing market for Howard County, Maryland in
2014.
 Low Income Housing Tax Credits: Patrick prepares rental market studies for submission to lenders and
state agencies for nine percent and four percent Low Income Housing Tax Credit allocations. Studies include
analysis of new construction as well as the feasibility of renovating existing family and senior rental
communities.
 FHA Section 221(d)(4): Patrick prepares comprehensive feasibility studies for submission to HUD regional
offices as part of a lender’s application for Section 221(d)(4) mortgage insurance. These studies strictly adhere
to HUD’s Multifamily Accelerated Processing (MAP) guidelines for market studies.
 Market and Product Advisory Analysis: Patrick provides insightful analysis of existing markets, product
and pricing recommendations, and targeted marketing suggestions for developers and land owners in the
preliminary stages of development.
 New Markets Tax Credits: Patrick leads RPRG’s community development and economic impact analysis
practice to illustrate the impacts of development projects that utilize federally-regulated New Markets Tax
Credits. Components of these reports include employment projections, local and regional economic impacts,
and fiscal impacts on local governments.
Education:
Bachelor of Arts – Fordham University, New York, NY
Master of Urban & Regional Planning – University of Michigan, Ann Arbor, MI
Pag e 35