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Transcript of 1 Contents Background and IntroductionPage 2 Consideration of the Airport SitePage 10 Comparative...
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ContentsContents
Background and Introduction Page 2
Consideration of the Airport Site Page 10
Comparative Site Analysis Approach Page 14
Comparative Site Analysis Results Page 19
Conclusions and Next Steps Page 34
Appendix - Finalist Site Descriptions and Photographs
Page Number
3
Background and Introduction
4
Project BackgroundProject Background
The Jefferson Parish Economic Development Commission (JEDCO) has identified the need for a higher-end business park to support the retention, expansion, and attraction of technology investment and jobs in the Parish. An audit of Parish technology resources indicates that local technology companies are
unable to find space to suit their expansion needs and/or desire for higher-end facilities.
The Parish currently lacks available sites that can compete effectively on a national level for the types of technology investment that will raise the area’s effective wages.
Ideally, the new Park will target technology-oriented companies; however, JEDCO’s vision for the Park is broadly inclusive, so as to include: Facility types that could range from high-end office to light manufacturing;
Centers for technology development and learning (e.g., an incubator or academy); and,
Operations / offices of companies in traditionally less-technical industries that are leveraging technology in innovative ways (e.g., manufacturing, logistics, and service-sector companies).
It is JEDCO’s intent to maintain a high-end park image through specific building and landscaping codes, covenants and restrictions (CCRs) as opposed to strict limitations on the kinds of operations permitted.
5
Project Background (continued)Project Background (continued)
Deloitte & Touche’s Fantus Group and JEDCO have completed Phase I of a search for the optimal site within Jefferson Parish for the new park.
Of 19 sites evaluated in Phase I, three West Bank sites were selected as having the best overall potential to meet JEDCO’s stated objectives and support efficient development of the park: Churchill Farms;
Marrero Land Site A; and,
Marrero Land Site B.
The goal of Phase II is to identify differences in the costs, timing, and other factors associated with developing these finalist sites, and to recommend a preferred site for JEDCO to move forward with the project.
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Phase I Evaluation Process & FindingsPhase I Evaluation Process & FindingsIn Phase I, 19 sites were evaluated using several suitability screens corresponding to criteria necessary for the Technology Park’s successful development.
Three Finalist SitesThree Finalist Sites
Development ConcernsDevelopment Concerns
Road AccessRoad Access
Image / Surrounding Land UsesImage / Surrounding Land Uses
Usable Acreage / Expansion PotentialUsable Acreage / Expansion PotentialA minimum of 25 acres, with preference given to sites with greater expansion potential.
Overall suitability of the site to support a higher image distinct from, yet compatible with, its surroundings.
Issues that might inhibit development, such as: environmental, restrictive layout, easements, ownership, etc.
Site is located in a less congested area, and has the potential for multiple entrance roads.
7
Sites Evaluated in Phase ISites Evaluated in Phase I
8
Finalist Sites: Marrero Land Sites A and BFinalist Sites: Marrero Land Sites A and B
Site A
Site B
Of the two Marrero Land sites, Site A is the preferred option due to its rectangular, larger, and more flexible configuration.
9
Finalist Site: Churchill FarmsFinalist Site: Churchill Farms
US 90
Lapalco Blvd.
Nicole Blvd.
The Churchill Farms Site includes roughly 3,700 acres.
10
Phase I ConclusionsPhase I Conclusions
Due primarily to the scarcity of developable East Bank land, the compelling sites for the Technology Park development are located on the West Bank. Just three East Bank sites were identified as candidates in Phase I, all of which
are adjacent to the New Orleans International Airport.
In their present configuration, none of the East Bank sites presents 25 developable acres (within 1 year timeframe).
At the conclusion of Phase I, The Jefferson EDGE Technology Committee and Deloitte & Touche Fantus elected to perform additional Phase II due diligence on the North Airport Site (north of I-10) due to: The site’s strategic location near the airport and Interstate; and,
The site’s status as the best potential location on the East Bank for new office development.
The finalist West Bank sites offer similar access to the overall technology resources of the Parish (companies, universities, labor, etc.). Thus, selection of
a preferred site is driven primarily by real-estate considerations.
The finalist West Bank sites offer similar access to the overall technology resources of the Parish (companies, universities, labor, etc.). Thus, selection of
a preferred site is driven primarily by real-estate considerations.
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Consideration of the Airport Site
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North-of-Airport Site MapNorth-of-Airport Site Map
13
Consideration of the Airport Site Consideration of the Airport Site
To better understand the site’s development potential, and the process required to realize it, we met with the leadership of the Airport and the City of Kenner.
Key obstacles to developing the site as a technology park that will meet JEDCO’s objectives include: Land control – Portions of the site are controlled by 14 private owners who have
turned down multiple buyout offers from the Airport Commission.
Land consolidation – Once the land is controlled, several roads will need to be closed in order to consolidate the site into a single, contiguous parcel.
FAA restrictions – The Federal Aviation Administration places limits on the proximity of “schools” to an airport, possibly prohibiting the development of a technology academy within the Technology Park.
Total acreage – The site’s total size has been estimated at 20.6 acres. However, restrictions on closing California Avenue and the I-10 exit ramp would likely limit the maximum contiguous site size to 15 acres or less.
Jurisdictional complexities – Ownership, administration, and governance over the site is divided among at least four entities: the Airport, the City of New Orleans, the City of Kenner, and the private land owners.
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Consideration of the Airport Site (continued)Consideration of the Airport Site (continued)
Although the North of Airport Site is not well suited for the Technology Park, it holds great potential for retail, commercial, or in-fill office development to support economic and community development in the City of Kenner and Jefferson Parish.
From our discussions, it is clear that the stakeholder groups associated with the site share a common belief that the site’s potential remains untapped. They also share a desire to develop the site to its full potential.
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Comparative Site Analysis Approach
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Comparative Site Analysis ApproachComparative Site Analysis Approach
Our analysis of the finalist sites was guided by several key questions, and based on a comparison of key real-estate factors. Which site has the greatest potential to attract prospects and support long-term
economic-development success for the Parish? Image and surrounding land uses
Configuration
Expansion potential
How do the sites differ with respect to the effective cost and time required to develop and operate them? Land costs
Utility service levels and extension requirements
Wetlands mitigation
Site preparation requirements
Overall development timeframe
These factors are not equally weighted in terms of their influenceon the long-term success of the Technology Park. The sites’
image, configuration and land costs are the key determinants oftheir ability to attract prospects, locally and nationally.
These factors are not equally weighted in terms of their influenceon the long-term success of the Technology Park. The sites’
image, configuration and land costs are the key determinants oftheir ability to attract prospects, locally and nationally.
17
Comparative Site Analysis MethodologyComparative Site Analysis Methodology
Our analysis of the relevant development issues in Phase II was facilitated by detailed discussions with various private- and public-sector entities. Utility Service Providers – to evaluate the feasibility, cost and timeframe
required to provide the necessary level of service to each site. Jefferson Parish Department of Engineering (water and sewer) ATMOS Energy (natural gas) Entergy Louisiana Corporation (electric) Cox Communications (full-service telecommunications)
Planning, Zoning and Permitting – to determine the steps / timeframes required to obtain appropriate zoning, and to assess each site within the context of the Parish’s master land-use plan.
Drainage & Environmental – to further assess any issues that might differentiate the development potential of finalist sites.
Site owners / representatives – to explore asking prices for land and potential scenarios for partnership on the project, and to further convey JEDCO’s overall vision for the park.
Other area business parks – to assess prospects’ alternate location options for technology investment / establishments within the greater New Orleans metropolitan area.
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Site Development Factors and AssumptionsSite Development Factors and Assumptions
Ultimately, several factors were identified as having the greatest impact on the cost / timing of development, and are expected to vary between the sites: Land costs;
Utility extensions (sewer and water only); and,
Wetlands delineation / mitigation.
Based on our evaluation, we believe the following factors can be expected to be roughly equal for each site: Extension of natural gas, electric and telecommunication services to the site, and
installation underground;
The cost and timing of landscaping and road / parking-area construction;
The time required to modify zoning classifications;
Environmental, geotechnical and other condition assessments (excluding wetlands); and
Engineering and architectural design efforts.
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Additional Site Development ConsiderationsAdditional Site Development Considerations
The following factors may also influence each site’s development timing / costs, but can not be evaluated without additional condition assessments, conceptual design, and engineering studies: Clearing;
Grading;
Filling;
Wetlands mitigation; and,
Storm water management.
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Comparative Site Analysis Results
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Comparison of Site Image and ConfigurationComparison of Site Image and Configuration
Because the image, configuration and expansion potential of a site largely determine its suitability for technology park development, these factors are heavily weighted in our analysis. Appropriate surrounding land uses enable a new park to achieve an attractive
and distinct image.
Large sites provide greater layout flexibility, both short and long term, along with the opportunity to incorporate mixed-use development that may not be possible on smaller sites.
While the Marrero Land Site’s image is acceptable for a higher-image development, we believe the Churchill Farms Site offers a superior setting for the Technology Park’s initial phase and long-term growth. The area surrounding Churchill Farms is largely undeveloped, while the image of
the Marrero Land Site A is influenced by nearby industrial, commercial and residential development.
The Churchill Farms Site’s size and road access allow flexibility with respect to park layout as the development evolves, and should accommodate mixed-use development in response to prospects’ diverse needs.
22
Land CostsLand Costs
The owner of the Marrero Land Sites is willing to lease 25 acres for the project’s initial phase at rates ranging from $7,850 to $10,900 / acre / year. The midpoint of this range ($9,375 / acre / year), represents an annual lease cost
for all 25 acres of approximately $234,000.
These lease costs would be paid by future tenants, or possibly subsidized to some extent by JEDCO in order to attract tenants to the park.
By comparison, the owner of the Churchill Farms Site is willing to donate to JEDCO, at no cost, 25 acres for the initial phase of the Technology Park.
Therefore, at the Churchill Farms property, JEDCO would retain greater control over potential lease rates, and / or the opportunity to capture rental income from tenants over the life of the park. JEDCO could also possibly sell land in response to particular prospects’
requirements.
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Land Costs (continued)Land Costs (continued)
This scenario illustrates the potential long-term lease income from the initial 25 acres of the Churchill Farms Site. Under this scenario, the initial acreage is absorbed at a rate of 20% per year
over the first five years.
The actual land cost benefits realized by JEDCO could be lower or higher than those below, depending on the actual absorption and lease rates realized.
YearYear% %
AbsorbedAbsorbedAnnual Annual
RentRentCumulative Cumulative
RentRent
1 20% $46,827 $46,827
2 40% $93,654 $140,841
3 60% $140,841 $280,962
4 80% $187,308 $468,270
5 100% $234,135 $702,405
6 100% $234,135 $936,540
7 100% $234,135 $1,170,675
8 100% $234,135 $1,404,810
9 100% $234,135 $1,638,945
10 100% $234,135 $1,873,080
Note: Analysis assumes annual lease rate of $0.215 psf (or $9,375 per acre) - the mid-point of lease rates provided by Marrero Land. The rents in the table are not discounted for NPV, nor adjusted upwards for potential future rent increases. Assuming a discount rate of 7% and a 2% annual lease-escalation rate (after year 5), the 20-year Net Present Value of lease income is approximately $2.3 million.
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Site Development TimeframeSite Development Timeframe
To compare the sites’ relative development timeframes, we developed rough estimates of the duration of primary development tasks for the sites.
Although the necessity and duration of some tasks (e.g., wetlands permitting) will vary between sites, the overall timeframe to develop both sites is largely determined by utility extensions – estimated to require 1 year at both sites.
Hypothetical Technology Park development schedule:
MonthMonth
ActivityActivity 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Phase I Assessment
Preliminary Wetlands Assessment
Wetlands Permitting
Conceptual Design
Geotechnical Assessment
Change Zoning
Clear & Grade
Road & Landscaping
Sewer Line Extension**
Water Line Extension**
** Time estimates provided by Jefferson Parish Department of Engineering.
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Utility Extensions – Gas, Electric and TelecomUtility Extensions – Gas, Electric and Telecom
ATMOS Energy states that it can extend natural gas service to either site within JEDCO’s development timeframe.
Per Entergy Louisiana, electric service to the site would be provided at 13.8 kV. Considerable electric infrastructure is in place at the Marrero Land Sites, while it
will need to be extended to Churchill Farms along Nicole Boulevard from the Avondale residential development.
Entergy suggests that the Marrero Land Sites might experience slightly better service-response times given the greater infrastructure and service requirements of the area’s industrial users.
Differential costs to bury electric lines on either site will be borne by JEDCO / developer ($1.5 million per mile).
Cox Communications expressed its willingness to extend full-service telecommunications infrastructure to either site.
Natural gas, electric, and telecommunications services can be brought to the sites within the development timeframe, at no cost to JEDCO and / or the site developer.
26
Utility Extensions – Water and SewerUtility Extensions – Water and Sewer
Neither site is presently served by both water and sewer: The Marrero Site lacks water service, while Churchill Farms lacks sewer service.
The estimated time to complete engineering studies and install infrastructure is the same for both sites (1 year), but the cost for Churchill Farms’ installation could be as much as $1 million** more.
** Estimates provided by Jefferson Parish Department of Engineering.
Churchill Farms: 11,500-foot sewer line and lift station installation
Time Cost
Engineering study 9 months $100,000
Line installation ($75/foot) 3 months $862,500
Bore under Lapalco Boulevard — $50,000
New lift station $375,000
Total 1 year $1,387,500
Marrero Site A: 4,100-foot water line extension
Time Cost
Engineering study 5 months $100,000
Line installation ($75/foot) 7 months $307,500
Bore under US 90 — $55,000
Total 1 year $462,500
27
Utility Extensions – Water and Sewer (continued)Utility Extensions – Water and Sewer (continued)
The true cost differential for utility extensions to the Churchill Farms site for the project may not reach $1 million, however, because: The length of the sewer-line extension can be reduced if the line is run through
portions of the Churchill Farms Site as opposed to solely along Nicole and Lapalco Boulevards.
Because sewer-line extensions will ultimately be required to support growth in this area, the Parish might not allocate the entire cost of these extensions to the Technology Park project.
State and federal economic-development grant funding should be easier to obtain for water and sewer infrastructure versus other project costs such as gas/electric extensions, land acquisition, etc.
28
Water-Line Extension Map – Marrero Land SiteWater-Line Extension Map – Marrero Land SiteExisting water lines need to be extended to the site from the east and west along Highway LA-18.
29
Sewer-Line Extension Map – Churchill Farms Site Sewer-Line Extension Map – Churchill Farms Site To connect the site to existing infrastructure, a new lift station is needed along with a significant line extension.
30
Wetlands Delineation & MitigationWetlands Delineation & Mitigation
Timing for a successful 404 Permit application to dredge and fill wetlands can be generalized as follows: Preliminary site assessment: 1 week;
Delineation study and permit application: 1 month; and,
U.S. Army Corps of Engineers (USACE) review: 4 to 6 months.
In 1999, the USACE determined that the Marrero Sites did not contain jurisdictional wetlands. This status remains in effect until July 21, 2004, at which time the sites would
need to be reassessed.
Development prior to this date can proceed without additional studies or permit applications.
A wetlands delineation has not been performed for the Churchill Farms Site. However, the site may be expected to contain wetlands given its proximity to the
TPC Golf Course site, which contained significant wetlands.
31
Wetlands Delineation & Mitigation (continued)Wetlands Delineation & Mitigation (continued)
If mitigation is required, its impact on the development timeline will be minimal if the Parish initiates utility-extension studies prior to receiving the 404 Permit.
Careful parcel selection for the initial phase of development may reduce or eliminate the need for wetlands mitigation.
The additional development costs associated with wetlands delineation, permitting and mitigation include: Professional fees for the delineation studies and permit application; Additional earth moving / fill; and Land banking acreage for mitigation.
With the possible exception of the earth-moving costs, these costs are not expected to be significant in terms of the entire development budget. Earth-moving costs associated with wetlands mitigation at Churchill Farms
could be significant. These costs can not be reliably estimated without additional site-assessment
and design work.
32
Future Land Use PlanFuture Land Use PlanThe candidate sites are designated “Corporate Research Park” and “Community Mixed-Use” under the Parish’s proposed future land use plan.
Low Density ResidentialLow-Medium Density ResidentialMedium Density ResidentialMedium High Density ResidentialHigh Density ResidentialLow Intensity CommercialHigh Intensity CommercialCorporate/Research ParkNeighborhood Mixed UseCommunity Mixed UseRegional Mixed UseLight IndustrialHeavy IndustrialPublic/Quasi-Public/InstitutionalResources LandsRecreationArea Under Study
FUTURE LAND USE
Churchill Farms Site Future Land Use designation: Community Mixed Use
Marrero Land Site Future Land Use designation: Corporate/Research Park
33
Zoning and Land-Use Planning ConsiderationsZoning and Land-Use Planning Considerations
Representatives from the Jefferson Parish Planning Department indicate that development of a Technology Park at either site is consistent with the Parish’s proposed Future Land Use Plan. If circumstances required it in the future, the Land Use Plan could be amended
so as to facilitate development of the Technology Park.
Both sites would likely need to be re-zoned prior to development. This process is reported to be straightforward, and could be completed within 90 days.
In addition to an appropriate zoning classification, detailed codes, covenants and restrictions should be the primary means to govern the characteristics of the development, such as: Allowable industry types;
Facility operating guidelines;
Building construction specifications; and,
Landscaping.
34
Summary of Comparative AnalysisSummary of Comparative Analysis
FactorFactorMarrero Marrero Land Land Site ASite A
Churchill Churchill FarmsFarms
CommentsComments
Image The Marrero Land Site’s surroundings convey a more industrial image, and could limit the overall image attained by the Technology Park.
Configuration The Churchill Farms Site’s large size and nearby road configuration provide greater flexibility and expansion potential for long-term, mixed-use development.
Land Cost 25 acres of donated land at the Churchill Farms Site may enable JEDCO to offset up-front development costs with future rental income.
Utility Extension Cost Less costly utility extensions are required to serve the Marrero Land
Site.
Wetlands Initial development of the Marrero Land Site can proceed without wetlands delineation/permitting. Churchill Farms’ wetlands issues have not been assessed, and may affect its development requirements.
Development Timing Utility-extension timeframes are similar for both sites, and largely
determine the overall project timeframes.
Site Preparation Requirements
Clearing, grading and fill costs are expected to be less at the Marrero Land Site A. These costs, however, can not yet be quantified for either site.
Zoning and Land-Use Planning
Development of a Technology Park at either site is consistent with the Parish’s proposed Future Land Use Plan. Both sites may need to be re-zoned prior to development.
Pri
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eThe following chart summarizes the comparative advantages and disadvantages of each finalist site.
35
Conclusions and Next Steps
36
Overall ConclusionsOverall Conclusions
JEDCO’s plan for a new Technology Park can be successfully realized at either finalist site. No fatal flaws were found for either property during our Phase II evaluation.
While each site offers distinct strengths, the Churchill Farms property offers compelling advantages in the factors most critical to the long-term success of the project: Image – Churchill Farms offers better opportunity to create a higher-image park
to compete on a local, regional, and national level for technology prospects.
Site size and configuration – The Churchill Farms Site offers a greater opportunity for long-term expansion and flexibility in the development of the park.
Land costs – Land cost savings at Churchill Farms will allow JEDCO to offer prospects more attractive lease rates, and / or capture rental income to offset Churchill Farms’ higher initial development costs. These savings will extend through the life of the project, and will continue to benefit
JEDCO as land values rise in the area. Additional evaluation of development costs at Churchill Farms is needed to determine the
extent to which land cost benefits offset its higher initial development costs.
Over time, these factors combined should outweigh the lower potential up-front development costs offered by the Marrero Land Site.
37
Preliminary Next Steps Toward Park DevelopmentPreliminary Next Steps Toward Park Development
Further assess Churchill Farms’ site-specific development requirements Develop a conceptual design / layout for the park’s initial phase
Perform preliminary wetlands assessment for a broad area of the site
Identify optimal location for the initial-phase acreage (25 acres)
Refine development budget estimates to confirm project feasibility and support funding requests Additional site assessments may be needed to support defensible project cost estimates
Pursue cooperative agreement(s) with site owners and / or developers Roles and responsibilities
Codes, covenants and restrictions (CCRs)
Initiate pursuit of funding sources
Initiate development process, focusing on rate-limiting steps such as utility-extension studies
38
Appendix
Finalist Site Descriptions and Photographs
39
Marrero Land Sites A and B – Site DetailsMarrero Land Sites A and B – Site Details
Site Size / Configuration Site A: Approximately 102 acres in a roughly rectangular configurationSite B: Approximately 67 acres in a long, somewhat narrow configuration
Location LA Hwy 18 and LA Hwy 541, Bridge City
Owner Marrero Land & Improvement Association, Ltd.
Asking Price Estimated at $1.25 - $1.50 psf (or $55,000 - $65,00 per acre) sale price for a 25-acre parcel; Marrero Land would prefer to lease the property to JEDCO at an estimated price of $0.18 to $0.25 psf (or $7,800 - $10,900 per acre).
Highway Access LA Hwy 18 to US 90 (less than ¼ mile)
Current Use Pasture for cattle grazing; no permanent facilities on site other than barns, stables, and sheds
Surrounding Uses Avondale Shipyards (west); US 90 (east, south); Rail yard (south); Church, school (north)
Former Use Pasture
Zoning Site A: R-1A (Residential) / M-1 (Industrial); Site B: M-1 (Industrial)
Utilities Water: 4,100-ft extension of 12” main required to serve the site; Sewer: Site gravity system can be run to nearby lift station; Gas: Line runs along east side of US 90 (approximately 1600’ from site); Electric: Adjacent to site along LA 18 and LA 541.
Environmental / Wetlands No environmental site assessments have been completed. Property was designated as a non-wetland area by USACE in 1999.
40
Marrero Land Sites A and B – Site PhotosMarrero Land Sites A and B – Site Photos
Facing south toward Site B from LA 541Facing east toward Site A from LA 541
Facing west toward Avondale from Site A Facing northeast toward Site A from LA 541
41
Churchill Farms - Site DetailsChurchill Farms - Site Details
Site Size / Configuration Property includes approximately 3,700 acres.
Location Primary access road to the property is Nicole Blvd. via Lapalco Blvd. The property extends southwest to the edge of the hurricane protection levee system.
Owner Joseph Marcello
Asking Price The owner is willing to donate 25 acres for the project.
Highway Access Lapalco Blvd. to US 90 (approximately 1 mile)
Current Use The majority of the property is currently vacant and undeveloped. Some portions are being used for agriculture or pastureland.
Surrounding Uses TPC golf course currently under construction along Nicole Blvd. Most land adjacent to the site is vacant and undeveloped. The Avondale subdivision is close to a remote portion of the site.
Former Use Agriculture, pasture, or undeveloped
Zoning The majority of the property is currently zoned U-1 (Unrestricted District).
Utilities Water: 16” main runs along Nicole Blvd.; Sewer: 11,500-ft extension of 12” main, along with a new lift station, is needed to serve the site; Gas: Line location is not known; however, ATMOS Energy indicates the site can be adequately served within the project timeframe; Electric: Transmission line will need to be extended along Nicole Blvd. from the Avondale residential subdivision.
Environmental / Wetlands No environmental site assessments or wetlands delineations have been reported.
42
Churchill Farms – Site PhotosChurchill Farms – Site Photos
Intersection of Lapalco Blvd. and Nicole Blvd.
Facing south along Nicole Blvd. toward property
Facing west along Lapalco Blvd. from Nicole Blvd.
TPC Golf Course property along Nicole Blvd.