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Model: |
Low
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: |
$36,000,000 |
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Annual Local Expenditures by Firm: |
$1,000,000 |
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New Jobs: |
250 |
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Average Wage per Job: |
$33,000 |
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Average Value of Home Purchased: |
$160,340 |
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Total New Households in City and County: |
164 |
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City Revenue per Firm Employee Household: |
$0 |
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Additional Jobs in City and County: |
107 |
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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: |
$8,711,742 |
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Value of All Incentives Offered: |
$8,711,742 |
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Value of All Incentives per Job: |
$34,847 |
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Returns for Jurisdictions: |
City |
County |
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Revenues |
$19,999,508 |
$17,822,653 |
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Costs |
$16,655,074 |
$12,062,728 |
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Revenue Stream, Pre-Incentives |
$3,344,434 |
$5,759,925 |
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Value of Incentives Offered |
$1,967,855 |
$2,413,799 |
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Revenue Stream with Incentives |
$1,376,579 |
$3,346,126 |
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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 |
($258,717) |
$1,331,292 |
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Benefit/Cost Ratio, Before Incentives |
0.97 |
1.17 |
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Discounted Cash Flow, After Incentives |
($1,473,361) |
($158,608) |
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Benefit/Cost Ratio, After Incentives |
0.87 |
0.98 |
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Lawrence Discounted Cash Flow |
Pre-Incentives |
Post-Incentives |
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Years 1-5 |
($2,739,558) |
($3,029,628) |
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Years 6-10 |
($147,824) |
($709,474) |
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Years 11-15 |
$614,641 |
$336,467 |
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Years 16+ |
$1,908,691 |
$1,908,691 |
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Douglas County Discounted Cash Flow |
Pre-Incentives |
Post-Incentives |
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Years 1-5 |
($1,920,199) |
($2,276,003) |
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Years 6-10 |
$285,675 |
($403,253) |
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Years 11-15 |
$693,474 |
$355,247 |
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Years 16+ |
$2,153,498 |
$2,153,498 |
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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 |
8.8% |
15.6% |
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Property tax from Firm |
42.4% |
58.3% |
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Sales Taxes from Residents and Employees |
17.2% |
5.9% |
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Sales Taxes from Firm |
4.1% |
1.2% |
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Franchise Fees, Households |
4.5% |
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Franchise Fees, Firm |
5.8% |
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Other |
17.2% |
19.0% |
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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 |
1.9% |
0.3% |
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Capital Costs, Firm |
26.5% |
24.1% |
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Operating Costs, Residents |
25.8% |
22.7% |
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Operating Costs, Indirect Employment |
8.0% |
6.0% |
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Operating Costs, Firm |
20.2% |
14.0% |
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Infrastructure on the Firm's Property |
0.0% |
0.0% |
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sub-total, costs |
82.5% |
67.1% |
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Abatements |
9.8% |
13.5% |
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Other Incentives |
0.0% |
0.0% |
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| Total,
Costs as Share of Revenue |
92.3% |
80.6% |
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