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Model: |
High
Value Firm |
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| Assumptions
for All Models: |
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Projects are a 2 phase investment |
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The first phase begins
operation in January 2010, and is completed in 2011. |
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The second phase begins
in January 2015 and is completed in 2016. |
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The same tax abatement is
offered for both phases. |
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Land is sold, not
donated, to investing firm. Proceeds
go to City. |
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| Project
Summary: |
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Capital Investment in Plant: |
$63,750,000 |
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Annual Local Expenditures by Firm: |
$2,625,000 |
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New Jobs: |
400 |
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Average Wage per Job: |
$50,000 |
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Average Value of Home Purchased: |
$240,491 |
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Total New Households in City and County: |
350 |
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City Revenue per Firm Employee Household: |
$0 |
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Additional Jobs in City and County: |
391 |
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Tax Abatement/s Offered: |
80% |
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Length of Tax Abatement/s: |
10
Years |
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Number of Abatements: |
2 |
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Value of Tax Abatements, Total: |
$15,436,416 |
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Value of All Incentives Offered: |
$15,436,416 |
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Value of All Incentives per Job: |
$38,591 |
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Returns for Jurisdictions: |
City |
County |
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Revenues |
$39,528,807 |
$33,382,488 |
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Costs |
$25,918,086 |
$17,836,474 |
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Revenue Stream, Pre-Incentives |
$13,610,721 |
$15,546,015 |
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Value of Incentives Offered |
$3,486,860 |
$4,277,033 |
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Revenue Stream with Incentives |
$10,123,861 |
$11,268,982 |
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Returns for Jurisdictions, Discounted: |
City |
County |
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Discount Rate |
6.25% |
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Discounted Cash Flow, Before Incentives |
$5,578,075 |
$6,894,849 |
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Benefit/Cost Ratio, Before Incentives |
1.42 |
1.76 |
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Discounted Cash Flow, After Incentives |
$3,425,425 |
$4,254,378 |
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Benefit/Cost Ratio, After Incentives |
1.22 |
1.36 |
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Lawrence Discounted Cash Flow |
Pre-Incentives |
Post-Incentives |
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Years 1-5 |
($114,511) |
($629,427) |
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Years 6-10 |
$444,247 |
($550,810) |
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Years 11-15 |
$1,227,180 |
$727,728 |
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Years 16+ |
$3,810,854 |
$3,810,854 |
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Douglas County Discounted Cash Flow |
Pre-Incentives |
Post-Incentives |
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Years 1-5 |
$537,526 |
($94,077) |
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Years 6-10 |
$922,396 |
($298,155) |
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Years 11-15 |
$1,270,808 |
$669,751 |
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Years 16+ |
$3,946,336 |
$3,946,336 |
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| Appendix 1: Sources of Revenue and Costs as a Share of
Revenue |
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| Revenue
Source |
City |
County |
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Property tax from Households |
9.9% |
18.0% |
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Property tax from Firm |
38.0% |
55.2% |
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Sales Taxes from Residents and Employees |
24.5% |
8.9% |
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Sales Taxes from Firm |
4.3% |
1.3% |
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Franchise Fees, Households |
4.6% |
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Franchise Fees, Firm |
4.3% |
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Other |
14.3% |
16.6% |
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Total, Revenues |
100.0% |
100.0% |
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Costs as Share of Revenue |
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Capital Costs, Households |
2.2% |
0.4% |
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Capital Costs, Firm |
7.5% |
6.4% |
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Operating Costs, Residents |
26.4% |
24.3% |
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Operating Costs, Indirect Employment |
14.0% |
11.0% |
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Operating Costs, Firm |
15.4% |
11.3% |
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Infrastructure on the Firm's Property |
0.0% |
0.0% |
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sub-total, costs |
65.4% |
53.4% |
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Abatements |
8.8% |
12.8% |
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Other Incentives |
0.0% |
0.0% |
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| Total,
Costs as Share of Revenue |
74.3% |
66.2% |
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