HomeMy WebLinkAbout05272014 City Council Work Session Notes - Friends of the Jesse Lee Home . ..
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Friends of the Jesse Lee Home Completed and Proposed Improvements
Completed Site Improvements- Actual Costs
Investment
Project Management
$79,172.00
Structural Stabilization, Roof Protection 2011
$57,680.00
Roof Protection & Repairs 2012
$17,000.00
Architectural Design Services & Surveying through March 1, 2013
$389,099.00
Phase 1 Environmental Report & Study
$20,160.00
Hazmat Study
$4,220.00
Surveying
$8,745.51
Structural Analysis
$14,045.26
TOTAL $59.0__121.77
Proposed Site Improvements- Estimated Costs
Hazmat Abatement (both buildings per environmental report)
$216,000.00
Clearing, Grubbing, Site Preparation to Sub-grade
$105,797.00
Site Utilities - Mechanical (Water, Sewer, Storm, Fuel Oil Tank) Electrical (Service,
Telecom, Transformer, etc.)
$335,223.00
Exterior Foundation Stabilization (Expose exterior, add drain, waterproof, epoxy
inject cracks. Interior — FRP inside of foundation wails (includes exposing footing,
FRP application top to bottom)
$150,000.00
Design: Completion of Design
$705,374.00
Water Utilities: 270+/- feet 8" main @ $200 per foot and 2 hydrants @$10,000 each
$74,000.00
Sewer Utilities: 220+/- feet 6" main @ $150 per foot, 100+/- feet 4" main @ $125 per
foot, 3SSMHs@ $10,000 each
$75,500.00
Soft Costs (Project Management, Permits & Fees, Reporting)
$75,619.00
TOTAL $1,737,139.00
Completed and Proposed Site Improvements
TOTAL $2,327,260.77
NOTES
*Proposed costs are estimates
** City Appraised value for the Jesse Lee Home Appraisal was $470,000.
*** Property appraisal does not include the added costs of demolition, hazmat abatement,
permitting and other costs associated with the existing structures.
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Executive Summary.
The Balto SchooI The Balto School is an Alaska Statute 14.03.250 authorized residential charter school
Economic Impact Analysis of Construction and operating as a part of the Kenai Peninsula School District under the guidance of a
p �/ specific board of directors. It is housed at Seward's Jesse Lee Home.a nationally
Annual Operation recognized historic site that operates under the governance of the Friends of the Jesse
p Lee Home,a 501(c)(3)not-for-profit organization.
Steven Hamilton, C&S Management Associates Anchorage, Economic Impact Analysis estimates the economic impact on a region of any change in
Alaska a particular industry. In this case,we want to estimate the economic impact on the
Kenai Peninsula Borough of the proposed Balto School.
In this document,we examine the impact of both the construction component of the
project and the annual operations. For the construction component,we examine the
;p impact as it will occur in both the combined Anchorage metropolitan and the Kenai
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Jesse Lee Hom•
e e Peninsula regions as well as a separate analysis that examines impact only on the
}` Kenai Peninsula.
For the annual operations,we examine the impact of the initial model,using 75-student
capacity as well as the long-term intended model.150-student capacity. For these
+ii,w fi, • ,' ;w wr,.' analyses,we use IMPLAN®2012 data sets for both the Kenai Peninsula and the
t't Anchorage metropolitan areas with the IMPLAN®V3 software. Key results are reported
11"( y rt 'i in terms of:
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r• ; : F ' i • Direct Effect—the direct impact of the project,its spending,employment
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;p. „iirin4. Indirect Effect—the impact of the project on the economic activity of other
businesses in the region;and
', , ., r• 13‘" r " �°° - Inducted Effect—the impact of the project(both direct and indirect)on
. j household economic activity
+y • .ro r f . ' k During the construction phase,the project will support total employment of 127 jobs.
•fir many of which should be local and$21.2 million in economic output in the combined
m•Aa Kenai Peninsula and Anchorage Metropolitan areas. When looking at the impact on the
Kenai Peninsula alone,it supports local 78 jobs and$9.9 million in economic output.
7
Annual operations at the 75-student level will support 21 local jobs and$2.9 million in
economic output in the Kenai Peninsula region. Operation at the 150-student level will
support 31 local jobs and$4.1 million in economic output.
S Management Associates Friends theAll figures are reported in 2014 dollars assuming that the construction and initial
C Jesse Lee H•,..., .,
PO Box 1 nge0 PO Friends
x of operation will occur in 2014. The 150-student operation analysis assumes a 2018 start-
PO date and all results are discounted to 2014 dollars.
Anchorage,Alaska 99514 Seward Aiasr a 99664 g
(907)277-1088 (907)422-0660
stevejid csmgt.com jesseieehome, gci.net .
www.csmgi.com www-iesseleehome net' --- ._ ____ ___
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Table of Contents Introduction,Purpose,and Methodology.
Executive Summary. 2 The Balto School is an Alaska Statute 14.03.250 authorized residential charter school
Introduction,Purpose,and Methodology. 4 operating as a part of the Kenai Peninsula School District under the guidance of a
Purpose of this Analysis 4 specific board of directors. It is housed at Seward's Jesse Lee Home,a nationally
Methodology 5 recognized historic site that operates under the governance of the Friends of the Jesse
Definitions 5
Lee Home,a 501(c)(3)not-for-profit organization.
Impact of Construction Project. 7
Impact of Construction on Combined Areas_...................._. ........ 7 The Balto School will be a unique educational facility that offers a one-semester
Impact of Construction on the Kenai Peninsula..._..._..._._..._.__..._.__._.._.............._._.____ 7 residential educational program for a cross-section of Alaska high school students and a
Impact of Annual Operations y limited summer program,which also serves national and international students. The
Impact of Operations at 75-Student Capacity 9 school will be located in the Jesse Lee Home,a facility with strong ties to Alaska history.
Impact of Operations at the 150-Student Capacity y The Jesse Lee Home is currently on the National Register of Historic Sites.
Summary io The curriculum for the school will be a place-based STEAM model:sciences,
Appendicesii technology,engineering,arts and design,and mathematics with a strong undercurrent
Appendix A: Impact of Construction Project(Combined Anchorage and Kenai Peninsula) 12 of developing Alaskan leaders. A special emphasis will be placed on natural resource
Appendix B:Impact of Construction Project(Kenai Peninsula alone) 13 management and hands-on vocational training. A limited summer program will be
Appendix C: Impact of Annual Operations at the 75-Student Capacity 14 offered that provides a mix of educational exposure,real world application,and outdoor
Appendix D: Impact of Annual Operations at the 150-Student Capacity 15 experiences taking advantage the unique resources Seward has to offer.
Purpose of this Analysis.
Economic Impact Analysis estimates the economic impact on a region of any change in
a particular industry. In this case,we want to estimate the economic impact on the
Kenai Peninsula Borough of the proposed Balto School.
This modeling is based on the notion that economic activity at the Balto School will have
a ripple effect through the economy of the Kenai Peninsula both as a result of
purchases in the region and earnings. This analysis reflects the extent to which this
increase in economic activity also drives increased earnings and jobs in other
industries.
In this series of analyses,we will examine the impact of the construction project that will
renovate the historic Jesse Lee Home as well as looking at annual operations both at
the 75-student capacity and the 150-student capacity. For the construction project,
understanding that there will undoubtedly be importing of both labor and materials from
the Anchorage bowl area,we first examine the impact on the combined areas of
Anchorage and the Kenai Peninsula. We will also isolate through separate analysis,the
impact of the construction project on the Kenai Peninsula alone(assuming that 50%of
the costs will be incurred in the Kenai Peninsula economy).
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Value Added. Value added is the combination of labor income,other property type
For these analyses,we used the 2012 IMPLAN®data sets for the Kenai Peninsula and income,and indirect business taxes. Other property type income includes profits,
the Anchorage area. Analyses were conducted using the IMPLAN®V3 software. interest income,and rental income. Indirect business taxes are taxes collected by the
Analysis inputs for the construction project were taken from the 65%review documents business on behalf of the government,such as sales tax,excise tax,property tax,fees,
from the project architect. The inputs for the annual operations analyses were taken etc.
from the latest revisions of the projected income statements at both the 75-student
capacity and the 150-student capacity. The projected event years were all set to 2014
with the software making the necessary adjustments from 2012 dollars for the 75-
student model and the construction. Since movement to the 150-student model is
further into the future,we assumed a 2018 implementation with the software discounting
values to 2014 dollars.
In Appendices A through 0 we provide the impact of the project components to the ten
industries in the area ranked by the impact on employment in those industries.
Definitions.
The following definitions are taken from Principles of Impact Analysis and IMPLAN®
Applications,the technical manual that accompanies the IMPLAN®software and data.
Direct Effect. The direct effect reports the impact of the Balto School only. It consists
of employment(number of jobs),labor earnings,value added,and total revenue of the
school.
Indirect Effect. The indirect effect reports the impact of spending and employment by
businesses that are themselves impacted by the Balto School. It reflects the additional
jobs supported in those businesses,the labor earnings associated with those jobs,the
value added,and their total change in revenues or sales.
Inducted Effect. The induced effect reports the impact of household earnings and the
additional business activity that they generate as a result of the both the direct and
indirect effects.
Employment. Employment is measured in jobs(not full time equivalents but rather all
jobs both full and part time). An important distinction is that these should not
necessarily be considered"new jobs"but rather jobs supported by this activity. We
make this distinction because there are many economic changes occurring
simultaneously and the set of jobs in any industry may be increasing or decreasing due
to any number of drivers. It is more accurate to say that,whatever changes may be
occurring due to other drivers.the employment metric here describes those jobs that
are supported by this project.
Labor Income. Labor income consists of the employee compensation(wages and
benefits)as well as proprietor income.
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V
Impact of Construction Project.
The construction project associated with the Balto School will renovate the historic Employment Labor Income Value Added Output
Jesse Lee Home. Because of the scope and scale of the renovation,it is probable that Direct Effect 50.8 $2.622.163 $2.437,186 $6,396,180
labor and materials will be drawn from both the Kenai Peninsula and the Anchorage Indirect Effect 14.3 $574,290 $1,013.418 $1,975,837
metropolitan areas. For the analysis of the construction impact,we have conducted two Induced Effect 13.2 $486,622 $976,265 $1,564,711
different analyses. The first examines the impact of the construction project on both Total Effect 78.2 $3,683,075 $4,426,868 $9,936,727
areas combined. In the second analysis,we make an assumption that about 50%of the
cost of the project can be assigned to the Kenai Peninsula area and so we run the From this table we can see that this project should support about 51 local jobs on the
analysis for that region only using adjusted inputs. This analysis assumes 2014 Kenai Peninsula directly associated with the construction and another 17 local jobs
construction. resulting from the indirect and induced effects. The total economic output for the Kenai
Peninsula will be approximately$9.9 million.
Impact of Construction on Combined Areas.
The following table provides summary impact information related to the construction
project on the combined Anchorage metropolitan and Kenai Peninsula areas.
Table 1-Impart or ro:utrur,ion on r un'Iuj,
' Employment Labor Income Value Added Output
Direct Effect 71.7 $7,528,146 $7,267,258 $12,792,359
Indirect Effect 20.8 $1,431,568 $2,308,210 $3,691,691
Induced Effect 34.9 $1,779.424 $3,165,781 $4,774.651
Total Effect 127.3 $10,739,138 $12,741,250 $21,258,702
In this table we can see that the construction will support about 72 jobs directly
associated with the project and another 56 from indirect and inducted effects in the
combined Anchorage and Kenai Peninsula regions. The approximately$12.8 million in
direct output for this project will result in a total of over$21 million in economic output
for the combined regions.
Impact of Construction on the Kenai Peninsula.
In assessing the impact of the construction project on the Kenai Peninsula,we must
adjust the inputs to recognize that not all of the activity will be relevant to the Kenai
Peninsula. For this analysis,we assume that 50%of the activity will be relevant for this
area and adjust inputs accordingly. With this adjustment,the table below reflects the
impact under these assumptions of the construction project to the Kenai Peninsula.
- - .. . alysis 2014 7 5 The Salto School—Economic Impact Analysis 2014
Impact of Annual Operations. Summary.
For the analyses of annual operations,we first consider the 75-student capacity model The project to renovate the historic Jesse Lee Home and utilize it as the site of an
since that is the level at which the school will begin operations. Subsequently,we will innovative educational program will have economic impact on the region both from the
analyze the impact of 150-student capacity operations,which is tentatively scheduled construction/renovation and the annual operations. The construction component will
for implementation in 2018. For these analyses,we assume all economic activity, impact both Anchorage and the Kenai Peninsula since labor and materials will be
including employment,occurs within the Kenai Peninsula. acquired in both areas. When considering both areas,we note 127 jobs,many of which
should be local,supported with$21.2 million in total economic activity increase. When
Impact of Operations at 75-Student Capacity. considering the Kenai Peninsula alone,the project will support local 78 jobs with total
P P P Y change in economic output in the region of$9.9 million.
The operation of the Balto School will begin with 75-student capacity. This phase will
support local 21 jobs along with$2.9 million in increased economic output. With the
Employment Labor Income Value Added Output estimated 2018 implementation of 150-student capacity operations.a total of 31 local
Direct Effect 13.0 $1069,294 $1,239,297 $1,984,439 jobs will be supported and$4.1 million in increased economic output(stated in 2014
Indirect Effect 3.6 $104,590 $266,033 $452,662 dollars).
Induced Effect 4.8 $177,169 $355,693 $570,084
Total Effect 21.4 $1,351,053 $1,861,023 $2,980,185 Finally,prior to implementation of the 150-student capacity operation,an additional
construction renovation project will be required. The impact of this project is not
Annual operations at 75-student capacity will support 13 local jobs directly associated included in these analyses as the estimated costs have not yet been developed.
with the school and another 8.4 jobs in region resulting from the indirect and induced
effects. Economic output of$1.9 million from the direct effect will produce$2.9 million
in total economic output in the region.
Impact of Operations at the 150-Student Capacity.
Table 4-Impact or 150-Student ration
Employment Labor Income Value Added Output
Direct Effect 20.0 $1,478,078 $1,716,056 $2,777,190
Indirect Effect 5.1 $146,372 $372,309 $595,707
Induced Effect 6.6 $245,183 $492,241 $788,935
Total Effect 31.7 $1,869,694 $2,580,606 $4,161,832
In considering this table,it is important to note that the currency values have been
discounted from the projected 2018 event year to 2014 dollars. With this caveat,we
can see 20 local jobs directly associated with the operations and another 11 supported
through the indirect and induced effects. There is a total economic output of just over
$4.1 million.
Appendices. Appendix A: Impact of Construction Project(Combined Anchorage and Kenai
Peninsula)
The appendices to this analysis consists of a series of tables each showing the impact
on employment numbers for the highest ten affected industries for each of the different The following table details the impact on employment(number of jobs)from the
sets of analyses presented in the body of the report. construction project on the combined areas of Anchorage and the Kenai Peninsula.
Appendix A: Impact of Construction Project(Combined Anchorage and Kenai Table S-Impact of Construction(Anchorage/Kenai Peninsula)on top ten industries ranked by impact on
Peninsula) employment
Appendix B: Impact of Construction Project(Kenai Peninsula alone) Industry Employment Labor Income Value Added Output
Non-Res.Construction 72.1 $7,570,430 $7,308,076 $12,864,211
Appendix C: Impact of Annual Operations at 75-Student Capacity Food services/drinking places 5.0 $162,733 $215,514 $347,738
Architect/Eng.Services 4.1 $386,133 $389,928 $580,990
Appendix D: Impact of Annual Operations at 150-Student Capacity Private hospitals 2.5 $198,676 $211,733 $368,851
Health Practitioners 2.4 $210,521 $214,095 $320,996
Retail-General merchandise 2.2 $85,970 $119,255 $144,353
Real estate establishments 2.2 $61,193 $336,879 $406,228
Retail —Food/beverage 1.9 $73,383 $83,238 $114,390
Retail-motor vehicles/parts 1.6 $99,571 $106,081 $147,853
Wholesale trade business 1.5 $108,435 $247,301 $351,682
Note that the rank ordering of industries impacted is based on the number of jobs
supported as a result of this project.
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S
Appendix B:Impact of Construction Project(Kenai Peninsula alone) Appendix C: Impact of Annual Operations at the 75-Student Capacity
The following table details the impact on employment(number of jobs)from the The following table details the annual impact on employment(number of jobs)from
construction project on the Kenai Peninsula. annual operations at the 75-student capacity on the Kenai Peninsula.
Table I'-impact or Construction(Kenai Peninsula)on top ten industries r.1- bV 111111,1(1 on employment Table 7-Impact of annual operation+at 75-student level00 lop ten industries ranked by impact on employment
Industry Employment Labor Income Value Added Output Industry Employment Labor Income Value Added Output
Non-Res.construction 51.1 $2,637,192 $2,451,154 $6,432,838 Elementary/secondary schools 13.0 $1,069,972 $1,240,099 $1,985,870
Architect/Eng.Services 4.3 $132,386 $136,378 $333,790 Food services/drinking places 1.0 $21,266 $31,941 $58,621
Food services/drinking places 2.2 $45,662 $68,583 $125,871 Real estate establishments 1.0 $13,121 $133,393 $163,463
Retail -Food/beverage 1.3 $46,466 $53,169 $74,392 Other private educational 0.8 $11,709 $13,402 $27,389
Retail-General merchandise 1.1 $38,663 $55,269 $67,830 Services to buildings/dwellings 0.4 $6,050 $8,293 $17,928
Private hospitals 0.9 $71,100 $76,045 $135,450 Private hospitals 0.3 $26,114 $27,930 $49,748
Health Practitioners 0.9 $46,082 $47,456 $87,895 Health Practitioners 0.3 $16,925 $17,430 $32,282
Auto repair/maintenance 0.8 $35,507 $36,364 $61,266 Retail-Food/beverage 0.2 $8,574 $9,811 $13,727
Retail-Miscellaneous 0.8 $12,995 $24,685 $31,862 Retail-General merchandise 0.2 $7,272 $10,395 $12,757
Scenic/sightseeing transport. 0.8 $57,730 $60,812 $96,661 Civic/social/pro.organizations 0.2 $5,055 $3,907 $6,910
Note that the rank ordering of industries impacted is based on the number of jobs Note that the rank ordering of industries impacted is based on the number of jobs
supported as a result of this project. supported as a result of this project.
,
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Appendix D: Impact of Annual Operations at the 150-Student Capacity
The following table details the annual impact on employment(number of jobs)from
annual operations at the 150-student capacity on the Kenai Peninsula.
Table 6-Impact of annual operations at 15U-student level on top ten industries ranked by Impact on
employment
Industry Employment Labor Income Value Added Output
Elementary/secondary schools 20.1 $1,479,078 $1,717,165 $2,779,171
Food services/drinking places 1.4 $29,554 $44,390 $81,468
Real Estate Establishments 1.3 $18,332 $186,375 $228,387
Other private educational 1.0 $16,353 $18,718 $38,252
Services to buildings/dwellings 0.5 $8,458 $11,595 $25,065
Private hospitals 0.5 $36,139 $38,652 $68,846
Health Practitioners 0.5 $23,422 $24,121 $44,675
Retail—Food/beverage 0.3 $11,867 $13,579 $18,999
Retail—General Merchandise 0.3 $10,064 $14,386 $17,656
Civic/social/pro.organizations. 0.2 $7,024 $5,429 $9,602
Note that the rank ordering of industries impacted is based on the number of jobs
supported as a result of this project.