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272209 M�H17E - CITV CLERK ��2��9 PINK -.FINANCE COUIICll CANARV - DEPARTMENT � GITY OF SAINT PALTL � �� BLU'L - MYYOR File NO. a�'t�y Council Resolution � Presented By Referred To Committee: Date Out of Committee By Date WHEREAS, the City Council has received a report entitled "Draft DPM Financial Plan Framework" , dated December 4, 1978, which report was approved by the Downtown People Mover Steering Committee on December 11, 1978; and WHEREAS, said report, among other things , contained a proposal for private and public sharing of DPM operating deficits up to $1,200,000, with public participation of $400,000; and WHEREAS, the City Council has been requested to approve the concept of this operating deficits sharing proposal. NOW THEREFORE, BE IT RESOLVED that the Council of the City of Saint Paul does hereby approve in concept City participation up to $400,OQ0 in the Public Sector portion of DPM operating deficits in accordance with the attached Schedule A statement and formula for DPM operating deficits sharing. AND FURTHER BE IT RESOLVED that the Council of the City of Saint Paul does hereby approve in concept City participation up to $9,000,000 of capital cost, of which a maximum of up to $5,600 ,000 would be CIB bonds, and the remainder being non-cash credits. �:. I COUNCILMEN � Requested by Department of: Yeas Nays � Butler Hozza In Favor Hunt L,evine __ Against BY — �4��• Showalter Tedesco 197a Form Approved by City Attorney Adopted by ncil: Date ��C � 4 / Certi ' d Passe ouncil Secretar� BY �/�` �lppro ed :Navor: Da � �� 7 (1 1978 Approved by Mayor for Submission to Council BY - – — BY �ueus�m OEC 3 0 j978 �.. � � �� .: _ �"��9 . _ ::�:*� � - =.��-��. The private sector financial support would be a maximum of_ 5800,000 and �:::. be applied in the following manner: 1) The private sector will accept the first 5400,000 of the operating deficit; 2) The private sector will split:, on a 50-50 basis, the deficit with the public sector between 5400,000 and $1,200,000. Under this proposal, the private sector co�itment totals $800,000 accommodating a potential deficit of S1,200,000. All amounts are expressed in 1978 dollars. Private Sector Public Sector To'-�.al 5400,000 $ -0- $ 400,000 . 450,000 50,000 500,000 500,000 100,000 600,000 550,000 150,000 700,000 � 600,000 200,000 800,000 650,000 250,000 900,000 700,000 300,000 � 1,000,000 7�O,UUu 350,QC0 �,700,000 800,000 - 400,000 1,200,OD0 s SCHEDULE A - �i � � � �� " CITY OF SAINT PAUL r '�....Bg..e OFFICE OF THF. CITY COUNCI�� 84B@BBm !9!�f�BB DEG 1 �. 197� Council President RON MADDOX pa�jd H,� HOZZ� KARL NEID. JR. Councilman Legislative Aide December 14, 1978 Mr. David Hozza Council President Room 719 City Hall Dear Dave: I am sorry that I will be unabl.e to attend the City Council today. Please submit this letter as my intention to go on record supporting the financial plan for the operating deficit of the Downtown People Mover as presented in the reso�.ution before the Council. Thank you for your assistance in this ma.tter. Sincerely, \� Ron Maddox Councilman RM:daj CITY HALL SEVENTH FLOOR SAINT PAUL, MINNESOTA 55102 612/298-4475 �O � OPERATION ' 85 � FINANCIAL ADVISORY COMMITTEE to the � DOWNTOWN PEOPLE MOVER Robert Davis , Chairman Richard Kastner � The St. Paul Companies Commercial State Bank Geor e Benz James Kenad � g Y American National Bank Burlington Northern � Franklin Briese Eugene Kraut Minnesota Mutual Life The Saint Paul Port Authority � Insurance Company James Lindell � William H. Clapp West Publishing Company Clapp-Thomssen Company Robert McPherson ' Lin Deardorff Donaldsons Oxf ord Properties, U. S. Ltd. Gordon Mosentine � Richard Dreher Minnesota Federal Savings & Loan Daytons � Gerald Mueller William Eiden 3M Company Donaldsons � John Nagel William Faulkner Carlson Companies � American Hoist & Derrick Kenneth N. Stensby � Joseph Grundtner United Properties The Webb Company Robert Van Hoef, Secretary � Thomas Holt The First National Bank of The North Central Companies Saint Paul � � � � '�� a � T A B L E 0 F C 0 N T E N T S - - - - - - - - - - - - - - - Page Development Forecasts 1 & 2 Ridership 3 . Fares 6 • Operating Cost � Private Sector Participation in Operating Cost 8 - City of St. Paul Participation in Operating Cost 12 Cash Flow Analysis - Operating Cost 1� - Intermediate Development 19 - "Worst" Case 20 - "Best" Case , 21 rITC Share of Capital Costs 22 City Share of Capital Costs 23 APPENDIX: Evaluation of the Potential "GNP" Multiplier Effects of the Constxuction of the St. Paul DPM System, Robert J. Harson & Associates, Inc. , November 29, 1978 .e DEVELOPMENT FORECASTS The following table outlines the 1978-1990 development projections and lists the 1978-1990 development that is projected to be the result of the DPM: 1978-1990 Total I978-1990 Growth Use Forecasted Growth Related to DPM Office Space 2,450,000 sq. ft. 1,040,000 sq. ft. Retai.l 1,033,000 sq. ft. 450,000 sq. ft. Housinq 3,300 units 1,350 units Hotel 1,500 rooms 675 rooms The specific reasons the DPM is expected to cause the above identified develapments are listed below by land use category and followed by _ some general system consideratians. - Office Development . Fringe parking tie--cheaper for employees . Link business services and activity nodes . Efficient communications, reduce travel time and cost among courts/ State/financial/professional functions . Get employer out of transportation business . Get employer out of food service business . Improve work environment--more amenity, personal contacts, shopping and personal business appointments . Less employee time lost on shopping and personal business Retail Development . Improv� access of many downtown employees to the retail core . Induce shopping trips not otherwise made . Aggregate masses of pecple at key locations . Create market for new thresholds of size, mix, and quality of stores . Provide a unique attraction to expand weekend shoppi,ng Housing . Open up development sites . Provide cheap convenient com�nute . Save expense of second car „ . Reduce operating expense of primary car . Provide all-weather, convenient access to cultural and social activities Hotel . Link smaller hotels, can be marketed as a single unit for larger con- ventions . Provide all-weather link from hotels to Civic Center . Unique exciting element to pramote City for regional and national conventions 1 . Link hotels to other amenities and visitor attractions--increase visits by spouse and families of business travelers and convention delegates General System . Substitute for campactness found i.n hiqher density cities . Expand number of "prestige" sites . Expand effective "pedestrian domain" . Instill private market confidence through public commitment . Instill private ma�ket confidence through "fixed" nature of guideway . Improve national financial community image . Cumulative impact of one sector upon another . Improve circulation, less noise, congestion and pollution . Create development opportunities with direct tie into system 2 RIDERSHIP Table 1 shows the 1990 and 1983 partronage forecasts for the DPM.System. The values placed on key input parameters and the major assumptions include: . The fare is 18� in 1978 dollars and 25G in 1983 dollars. . $1.50 per hour is value that the patronage model assumes riders place on their time when detersnining whether to ride the DPM, walk, use a car, or ride the bus. � . The alignment and stations axe as shown on Figure 1. . The fringe parking program is assumed to be partially implemented by 1983 and fully implemented by 1990. . � The development will be as previously discussed. . The transfer between the bus and the DPM will be "free" to the user. Not included in the ridershig forecasts are the following: . Any visitors or other people who come to St. Paul for the primary purpose of seeinq and riding the system. - . A change in weekend shopping patterns. . A change in MTC operating policy that "turns-back" certain buses at the frinqe of downtown versus penetration in the downto�n. 3 TABLE 1 1990 DPM RIDERSHIP--PARTICIPATION IN REGIONAL AND INTERNAL TRIP MARKETS Daily Trip Daily Percent Market DPM�Trips DPM of Mkt Regional Trip Market Auto driver/passenger work 58,770 3,430 5.8 Auto driver/pass. non-urork 143,635 3,195 2.2 Transit passenger work 39,605 6,955 17.6 Transit passenqer non-work 40,645 5,330 13.1 TOTAL REG'L. MARKET 282,450 18,910 6.7 Intra-Study Area Trip Market 344,055 22,505 6.5 TOTAL TRIP MARI�T 626,505 41,415 6.6 1983 DPM RIDERSHIP--PARTICIPATION IN REGIONAL AND INTERNAL TRIP MARKETS Daily Trip Daily Percent Market DPM Trips DPM of Mkt Regional Trip Market Auto driver/passenger work 52,490 2,135 4.1 • Auto driver/pass: aon-work 135,310 2,805 2.1 -- Transit passenger work 34,680 5,380 15.5 Transit passenger non-�rk 37,770 4,900 13.0 TOTAL REGL. NlARKET 260,250 15,220 5.8 Intra-Study Area Trip P3arket 274,235 18,925 6.9 TOTAL TRIP MARI�T 534,485 34,145 6.4 4 FARES The DPM Steering Committee set the 1983 opening day fare at 25C. The fare would be held constant for the first few years of operation, but because of inflation, assumed to be 7$ annually, the real value of fare revenues would decline. A fare increase is therefore assumed in 1986 and 1988. This increase is set at an even coin amount (a nickel and a dime) and scheduled at a point when the increase c�ould return the value of tlze fare to approxi.mately that which existed on opening day. The fare, and its value in '78 and '83 dollars is shown in the table below. Value in Value in Year Fare 1983 Dollaxs 1978 Dollars 1983 25C 25.00 17.8� 1984 25� 23.4fi 16.7C 1985 25� 21.8� 15.6C 1986 30� 24.5fi 17.5� 1987 30C 22.9C 16.3� - 1988 35� 25.0� 17.8� 1989 35C 23.3� 16.6� 1990 35� 2?..8� '� °� _�..,- DPM fares would be paid by all non-transferring riders, and those passenqers who begin their trips on the DPM and transfer to buses. Those who transfer in the opposite direction, from buses to the DPM, would pay no DPM fare, as the transfer would be free. Thus, fares would be collected from non-transferring riders and half �f those who transfer. It is assumed that the MTC would credit the DPM with revenues equivalent to the fare for the DPM for those who transfer frons buses to the DPM. Such a policy would be comparable to the present procedure used for the Q.T. operation in Minneapolis. Social fare amounts have not been calculated for the DPM. Under the current soeial fare program for the bus system, fares for certain groups have been lowered by legislative action. The amount of the revenue lost because of the lower fares is reimbursed by the state. Thus, from a revenue standpoint, the MTC receives an amount equal to a full fare for each passenger. If the social fare program were to be extended to the DPM, the following results would occur. First, the total system revenue per passenger would remain the same, but a portion of the revenue would come from the state rather than fares. Second, the lower fare could attract a greater ridership, increasing total DPM revenues above those estimated. . . 6 i w - - I 'I ;�� i FSGURE 1 . ; �! � A . . . . i�� 'I�I . \V� ' � I.f • . �J �� I� � , � � �� \\\ '� � ��/ �`-��I ��1 , � �— . . J \� ii i:� f"� -�� '�1.,\� O � ,�' ,� � ` �7'" \�� 'i � _ � ,j ' �, '� �. � �r----�� . ��.`.� /� � �\\��lu .' 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' � � �� .� - '-'_J , � � , � i� � ��T� .w / ��jy — �--^�) ) �� II I �---� � �?I�i i '� I� � � : � , !1 h� / I �� /��`�i� '�.� ��'`�'�j�` �� l �� `_. �� ' � �� (��'�Ii�� N �' � � �, �, ) ,�� .., ; /-n ;� �I ��I;�' �� ,J '' � '//��r��//yyy\. „✓ ,- /1 /� 1 G� �I, � \ �� 4�� // ,�` /�/ ,O I II � � / . \�/\` � �/," // �. i�I i' ; �� a' ��J� �/ =� ,�) I � � `.�7/ �� ' ��; `�V" ;� % �� I J \ o � � ,,.;/-� �� ' � ' �'� � "� ' � d' , ;,� � ,�.� c ;�' � �:.I C� / � � i� �, _�, � � � �'��G� ! ��. � �' ,� � �A �', = ,/� �� fi � , � ✓ � /� ,! � I��11 ��`� � °�'+ r � �'i , � f ✓' �,a i.� � �� i �-- ^^ � I� �� '�---��,' � � �� %� . � � � o ,,�� a ° ------ �� ,�': / //", - ,� ' � , �� . W a ' �` ' � ��1�J� ��`�� ', �``'� ��`` �� i � - � �� . �� , , � , � � �� '�,C�i��, � �... ,;�--,' 1, �� i �� l� ..J � � , � �y'�.� /1,' � ` �1 �,��-�"r �� C� , , � / �;".^ •,/ �`Q'`-"�,( � ;1\ ; ��/ I W� ! �� " �� ,�// �' �� ,, ✓ �.� . ��` ;j �� , � t Z � i' �/ / �� _ ��1 ` ��,,�1, t '� , � ,. — �\ �„ ,, \,,��-',,,� � W � -�,, � �"" v � � ��A '� `�� W a'U � , �r � , w p� IS N � �� '�' � �� ,'�, �Z C �� , �' � , , � ��.: � � r i � {�J � � / i. � � ��/''i��, , ',� W d � !, ; , o�o � tJ) a `° � � ;��J c`7S I�-�� e c T � y � �ca �\ l 11� �1, /�,. �, .� � Z '� � yr �O � 3 ; � � � � � � � , �'\' , \ aZ � O a °% � N m ` a� � ��i � � d � � ; ;----. - � l ,:' ,' �� j ; H � = � .. � 3 p .. � > �' �� - a a a � � , � m � � � � � � � � ��- _ ; � �� .�� o�� ,� UU — QNJ m -1 (,/� � N M tt tt! tD f� � C1 O *' N lY! .. \\� \'" f�� Q � � r � ��.. -�. . `\ - . _..__ .. _ _ _.__ __ _ . ---- - S _ OPERATING COST Outlined below is the escalated and unescalated operating and maintenance cost of the DPPd system. The chart shows very small increase due to additional riders and the more significant increase in cost due to inflation. Inflation is assumed to average 7� over the 1983-1990 time period. Year Daily Annual DPM Operating & Operating & Ridezs Vehicle Miles Maintenance Cost Maintenance Cost 1978 Doll-ars Escalated 1983 34,145 820,000 S2,594,000 $3,632,000 1984 35,180 820,000 2,598,000 3,892,000 1985 36,215 820,000 2,603,000 � 4,170,000 1986 37,250 820,000 2,607,000 4,468,000 1987 38,285 820,000 2,612,000 4,788,000 1988 39,315 915,000 2,637,000 5,171,000 1989 40,355 915,000 2,642,000 5,543,000 - - 1990 41,415 915,000 2,646,000 5,938,000 It is assumed that a sinking fund will be established to periodically refurbish the stations and rebuild the vehicles. The sinking fund will provide the local funding share to match federal funds. The sinking fund is a fixed amount annual annuity of $150,000 in 1978 dollars, which is equivalent to $210,000 per year starting in 1983 (assuminq 7� inflation) . 7 PRIVATE SECTOR PARTICIPATION IN OPERATING COST After evaluation of many and varied participation techniques, the Financial Advisory Committee of Operation '85 has selected a program of special assessments on benefited properties with credits for maintenance and operation of DPM stations. The speci.al assessments would be applied to three benefit zones described as follows: � A. All commercial space in buildings located one block (400 feet) by skyway or sidewalk from a DPM station; B. All conm�ercial space in buildings located one to two blocks (401 to 800 feet) by skyway from a DPM station; C. All commercial space in buildings located in blocks witli skyway system access more than two blocks (800 feet) from a DPM station. The relative level of assessment varies according to land use and location. - _ The proposed assessment levels (1978 dollars) are: Zone A Zone B Zone C Office 10� 7.5� S.00 Hotel 15� 11.00 7.54 Retail 10-20� 7.5-15fi 5-10� Assessments for retail space will be scaled according to size. Stores of 100,000 square feet or more will be assessed at the low end of the ranqe.for each zone. Stores of less than 1,001 square feet wi.11 be assessed at the high end of the range for each zone. Assessments for store sizes between 1,000 and 100,00� square feet will be scaled inversely according to size. The revenue generated by the above rate structure is outlined in Tables 11A and 11B. The important features of the program include: . Stated in constant 1978 dollars, the averaqe per square foot benefit assessment for all land use cateqories/ geographic zones is approximately lOC per square foot. • . This overall average rate is between 50 to 60 percent of the average annual cost now paid by tennants for the annual maintenance and operating cost of the elevators3.� in theix respective buildings. •. . In all three tiers (i.e. benefit assessment zones) the average annual increase in rental rates per square foot would average one percent or less increase over today's prevailing lease rates. . In all instances retail facilities that would realize higher direct profit potentials, would be assessed at a rate which is 50 percent higher than co�nmercial office space. 3/ The average annual operational/maintenance cost of elevators in St. Paul's commercial buildings is 18 cents per square foot. 8 TABLE 11A (Optioa 6) Three Tiered Beaefit Assessment Combined Multiple Land Use Approach I. Revenue Requirements 1983 Space Allocation A. Coaercial/Public a� Space Located With3n One B1ock Skyway Access � 1) 2.91 million-sq. ft. office space @ I0� _ $ 291,000 2) 1,36 millioa sq. ft. retail space @ 15C b� = 204,000 3) 800 hotel rooms �� equal 360,000 sq. ft. @ IS� = 54,000 Subtot�l $ 549,000 $. Co�ercial/Pub13c Space a� Located Withia 1�ao Block Skyesy Access 1) 3.08 million sq. ft. office space @ 7.5� _ $ 231,000 2) .86 million sq. ft. retail space 11C . = 95,000 3) .No hotel rooms @ 11� _ -0- Subtotal . $ 326,000 C. Co�ercial Space Located ia Skyway System Beyond Two Blocks of DPM Station _ 1) .58 millioa sq. ft. . office space @ 5� _ $ 29,000 2) 500 hotel rooms �� equal 225,000 sq. ft. @ 7.SC = 17,000 Subtotal $ 46,000 Total Revenue Capacitq e� _• $ 921,000 a/ Iacludes 360,000 sq. ft. of State owaed office space. b/ Retail space includes restatu�ants. The rate reflects an averaga. Future allowance may be nade for differences .in sales per square foot volum�e for large versus small space tenants. -- c/ Estimate based on 450 sq. ft. facility space per room. d/ Includes 411,000 sq. ft. of Federally owaed office space and 210,000 sq. ft. of Citq owaed office space. In additioa, it assumes that the 250,000 sq. ft. of office space owned by the St. Paul Companies and the 120,000 sq. ft. of office space owned by West Publishing Campany are conaected by skywaqs. � e/ All space estimates are based on a definition of aet leasible space equals 80X of gross floor area. Sourca: Robert J. Harmoa .� Associates, Inc. 9 - TABLE 11B . ., - (Option 6) Three Tiered Benefit Assessmeat Combined Multiple Land Use Approach I. Revenue Requirements 1990 Space Allocatioa A. Co�ercial/Public Space a� Located Withia Oae Block Skyway Access 1) 3.59 m�l].ion sq. ft. office space @ 104 = $ 359,000 2) 1.49 m3.11ioa sq. ft. retail space @ 15C b� = 224,000 3) 800 hotel rooms equal �� 360,000 sq. ft. @ 15� = 54,000 . Subtotal � $ 637,000. B. Commercial/Public Space a� Located Within Two Block Access 1) 3.08 mfllion sq. ft. office space @ 7.SC = $ 231,000 2) .90 million sq. ft.. retail space @ 11C . = 99,000 ; 3) 400 hotel rooms eQual �� 190,000 sq. ft. @ 11� = 20,000 - Subtotal $ 350,000 C.. Com�ercial Space Located In Skyway System Beyond 1�o Blocks of DPM Station 1) .58 mill3oa sq. ft. office space @ SC = $ 29,000 ' 2) 500 hotel rooms aquals �� 225,000 sq. ft. @ 7.54 = 17,000 Subtotal $ � 46,000 Totai Reveaue .Capacitry e� _ $1,033,000 a/ Includes 360,000 sq. ft. of State owaed office space. b/ Retail space includes restaurants. The rate reflects aa average. Future allowance maq be made for differences in sales per square foot volume for large versus small space tenants. c/ Estimate based on 450 sq. ft. facilitq space per room d/ �Includes 4I1,000 sq. ft. of Federally owned office space and 210,000 sq. ft. � of City owned office space. In addition, it assumes that the 250,000 sq. ft. of office space owned by the St. Paul Compan3es and the 120,000 square feet of office space owned by West Publishing Company are coanected by skyways. e/ All space estimates are based on a definition of net leasible space equals 80X of gross floor area. Source: Robert J. Harmon � Associates, Inc. 10 The private sector financial support would be a maximum of $800,000 and be applied in the following manner: 1) The private sector will accept the first $400,000 of the operating deficit; 2) The private sector will split, on a 50-50 basis, the deficit with the public sector between $400,000 and $1,200,000. Under this proposal, the private sector commitment totals $800,000 accommodating a potential deficit of $1,200,000. Al1 amounts are expressed in 1978 dollars. Private Sector Public Sector Total $400,000 $ -0- $ 400,000 450,000 50,000 500,000 500,000 100,000 600,000 - 550,000 150,000 700,000 600,000 200,000 800,000 650,000 250,000 900,000 700,000 300,000 1,000,000 750,000 350,000 1,100,000 800,000 400,000 1,200,000 ' 11 CITY OF SAINT PA[7L PARTICIPATION IN OPERATING COSTS An analysis of potential revenue sources which could be used by the City of Saint Paul to fund part of the DPM operating costs was carried out by Robert J. Harmon and Associates. This analysis first identified DPM-created monetary benefits to the City resulting from DPM operation, since costs should be funded by the resulting benefits. Five such benefits were identified, as follows: 1) property tax/land or lease value gains, 2) retail sales profit/tax gains, 3) utility franchise tax gains, 4) hotel tax qains, and 5) income/retail sales tax gains relating to GNP multiplier/ business activity increases. Based upon a number of public F+olicy considerations, the third and fourth of these benefits have been determined to be appropriate for use. Their characteristics are described on the following pages. 12 sharing program dollars, this revenue will be looked to as � supplemental revenue source to meet ongoing existing program requirements . Necessary Steps to Guarantee Availability: Initially a base- line estimate of utility franchise fee revenues that would accrue to the City of St. Paul under the "without" DPM conditions would need to be formally adopted. Incremental annual revenues above this baseline would then have to be dedicated to the syst�m. � This dedicated fund would require an independent annual audit. Any surplus revenues should be invested in a "sinking fund" to further ensure against the effects of inflation. * � � . . 14 ?E�JENUE SOURCE PROFILE �3 Name: LTtility Franchise Feas Primary Beneficiary: The City of St. Paul Ger.eral Descri tion: The City of St. Paul currently collects an 8 . 6-7$�ranchi�e -ee on all NSP revenues derived from St. Paul residents and building owners. Similar to property tax revenues, the City based assessment on utility revenues derived from all DP�i-indLCed development would be directly attributable to the system. In add'ition, the electric power requirements of the DPM system operations would also be subject to this franchise tax fee. Relationshi to the• DPM S stem: The increase in utility franchise f�es attributa le to t e DPM system would be in direct proportion �o the energy requirements of the DPM-induced development. Ar_nual 1990 Revenue Potential: In 1990, the St. Paul DPM system would produce between $.2-. million dollars in incremental utility franchise fee revenues to the City of St. Paul. " Basis of Estimate: In order to derive these estimates RF.A con- ducted actual surveys of existing St. Paul CBD oftice, retail; residential and hotel building owners to determine the current levels of utility franchise fee payments. The results of these surveys indicated that the NSP currently derives: $75 per square foot of commercial office space, $1. 00 per square foot of retail space; $400 per hotel room; $290 per apartment unit on an annual basis. The estimated amounted of DPM-induced retail development was discounted at 50� to reflect a high portion of refurbished space. To be conservative only lighting, and air conditioning revenues were� taken ,into account. If heating revenues from non- electric fuel sources were taken into account, the incremental 1990 revenue to the City of St. Paul would equal appraximately $400, 00�. � Future Growth Potential : Stated in discounted 1978 dolZars the incremental utility franchise fees generated by the DPM system �vould minimally amount to $250 , 000 dollars . This estimate re- flects the fact that the NSP revenue base would keep pace with or eYCeed the annual cost of inflation. Advanta es/Disadvanta es: One of the major advantages o� the utility franchise ee as a candidate revenue source to support the St. Paul DPM system is that the base is sustainable (i .e. able to keep pace with inflation) . Secondly, since only non- � heating utility revenues were used to calculate the revenue fore- casts, it has additional capacity for growth. Another considera- tion is that the administration costs would be minimal . The major disadvantages to utilizing this revenue source is that it is one of the few inflation proof tax revenues available to the City of St. Paul . With a continued decline in Federal revenue 13 REVE�IUE SOURCE PROFILE #4 Name: Hotel Room Tax Primary Beneficiary: City of St. Paul General Description: Currently the City of St. Paul collects a room tax on all commercial accommodation revenues at the rate of 3$ . All increases in hotel business volume attributable to the DPM system would provide approximately $1 per rcom night in new rev�r�ue to the City. Relationship to LY:e DPM: The implementation of the DPM system would provide direct climate controlled pedestrian access between the existing/planned major hotels in the Civic Center, the Conven- tion Center, th� Capital Area and the major retail entertainment centers of St. Daul. This direct linkage would greatly increase . the cenvention holding capacity of the City. The increased comr�er- cial office devel�pment and retail development will enhance the appeal of the City for over-night stops by businessmen, tourists and convention delegates. The complete, climate controlled linkage of the ma�or activity centers in the St. Paul CBD, would also extend the seasonal periods during which St. Paul could compete for national/inter-regional convention business. Finally, with the DPM system, it is more Iikely that the current Civic Center ex�ansion plans would proceed. This event would further enhance the future expansion of the St. Paul hotel business activity. Annual 1990 Revenue Potential: By 1990, the City of St. Paul would r�ceive between $ 00 , 000-$300,000 in incremental annual hotel room tax levies as a result of the implementation of the DPM system. Basis of Estimate: The incremental 1990, hotel room tax levy estimate assumed: (1 a 75$ occupancy; (2) an average room rate of $30-35, and (3) continuation of the existing 3$ tax rate. The volume of new hotel business was estimated from the "induced hotel development" estimates prepared by Hammer, Siler George Associates. Future Growth Potential: The annual revenue potential from this revenue source vrould be able to keep pace with inflation. There is also an additional revenue potential from increased occupancy levels in existing or ��mmitted hotels, constructed pri.or to th� operation of the DPM system. Therefore (stated in 1978 dollars) , the DP:� sys- tem would by 1990 minimally provide $200, 000 in incremental hotel room tax levi�s to the City of St. Paul. Advantages/Disadvantages : The potential utilization of incremental hotel room tax levies to support the operational cost of the St. Paul DPM offers three advantages . These are: (1) the revenue source is sustainable (i.e. able to keep pace with inflation) ; (2) a major portion of the revenue is "new money" to both the city of St. Paul and the Twin Cities region; and (3) the revenue gains are directly attributable to the cumulative c1e�.relop�nent impacts of the St. Paul DPM system. , 15 The only disadvantages of utilization of this resource involve the administration requirements to establish bas e line estimates and comp�tition from other municipal service revenue needs of the City. Necessary Steps to Guarantee Availability: In order to ensure the availability of this resource a baseline forecast of hotel room tax levies would have to be established for the "without DPM" con- ditions. The proportion of incremental revenues received by th? . City that would be utilized to support the operation of the DPyI system would have to be dedicated. To further ensure against inflation these monies should be invested in a "sinking fund" under independent audit requirements. * * * 16 CASH FLOW ANALYSIS - OPERATING COST Tables 2 - 4 outline the cash flow for 1983-1990 for three cases: . CASE 1: Intermediate development forecasts and no adjustments to the patronage forecasts. . CASE 2: Worst Case. Low on baseline development forecasts and a reduction of the projected patronage by 15�. . CASE 3: Best Case. Opportunity development forecasts and an increase in the projected patronage by 15�. Discussed below are each line item in the three tables. Ridership The patronage model was used to forecast 1983 and 1990 riders for the intermediate oor market levei development forecasts. The table below shows these vlaues. Previous forecasts were developed using the low or baseline development forecasts and the opportunity forecasts. Usinq the relationship established with these computer forecasts, values for the low and high development situation were estabiished. The last step was to decrease the low development prcjections by 15$ and to increase the opportunity forecasts by 15$. The results are listed below for both 1983 and 1990: 1983 Low development Intermediate CQpor. Development and -15� Development and +IS$ Regular Riders 19,237 23.865 29,064 Bus Transfers 8,287 10,280 12,519 TOTAL 27,524 34,145 41,583 1990 - Regular Riders ° 23,481 29,130 35,476 Bus Transfers 9,902 12,285 14,961 TOTAL , 33,383 41,415 50,437 To estimate the patronage in each year the values were projected on a straight-line basis between 1983 and 1990. Fares Fares were previously discussed. 17 Operating Costs - The operating costs associated with the intermediate. level forecasts were previously presented. The operating costs associated with the "worst" case and "best" case forecasts are based on the i.ntermediate level operating costs adjusted for the lower and higher number of riders. The sinking fund annuity is assumed a constant for all three cases. Fares - Regular Riders The income from the regular riders is obtained by multiplying the ridership (regular riders) tiraes the appropriate fare times 300 days per year. The 300 days per year recognizes the anticipated reduced patronaqe on holidays, Saturdays, and Sundays. Bus Transfers The income from bus transfers is similiarily obtained by multiplying the ridership (bus transfers) times the appropriate fare times 300 days. The income is divided between the revenue from the farebox and - the revenue credit from the MTC. This concept was discussed under the previous section, Fares. Advertising Advertising revenue is estimated at $63,000 (1978 dollars) per year; this amount is escalated at 7� per year. �eficit The deficit is obtained by subtracting the various sources of income from the total operating cost and sinking fund. In 1978 dollars, using 1983 characteristics, the deficit ranges include: DEFICIT (1978 Dollars) WORST CASE $ 1,141,000 INTERMEDIATE CASE 836,000 BEST CASE 485,000 Commitments --- ' The private sector commitment of $800,000 (1978 dollars) was previously presented. For the purposes of this draft financial plan, the maxi.mum public sector commitment is set at $400,000 (1978 dollars) . 'Both of these commitments are escalated at 7$ per year in the cash flow analysis. Coverage The last line divides the deficit into the sum of the public sector and private sector commitments. The only case where the deficit is not covered is in the early years of the "worst" case development. Even in this situation over 95� of the deficit is covered. 18 - — -- - - — - - oZ- _ � �3 5 'n r fT < fpA � % n� Up1 C 01 m r"1 Np 7 N R R Cr O�. � . �1 � S Q M � 't P 8 �!G Q C �t •3 y 0� S W 0' � h+R n . O�i p � �,� ff . `O 0 � i r 'r R hl R rr 7 rr �v � N . R O �►O m 1 O �O �+ �D �f r d tro9 a m � R � � er W 7 7 rr 7 h r r r m s �o a .• m m s d ��o a�o �o - a � � ~ � e ~i° ►`°inc ~ co a m � � ~o � R W m 0~i tmr � i+.G m R � Z \ � m I 1 R �0 01 t0 • � � � R Q � �'I G W q . . � � � R . R O 7 � K . � SO . . , K � V O C� j � m R ry� . y . y� � � � m m n • r R < � r" . n R � ' • T2 �7 1 � . . R . . . . . _ . . . 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O O 00p0p0 Op10p a' NmW tIDi� b r N � a� o o �N.+ o0 0 0 0000 o p�o0 o t~iipv�i � O g ° .� � w+ r r i., N ,p a � � D w t� a� tr t,n w p� n>a ` {.+ h+ 0+ m v N O+O O.O tn �t f+ O+ W►+N h+ t" i O n� r .a i. m O Oo r+ h+O 6'�I O W J►+C+ t0 7y 7 � JQ1 ✓ 00 O 00 O 00 w NV►+ p�i y � � � �oo � oo g o ogo � o gr$s � o �� $ ; � � r o � _ n� �. r � w ,p .r � n> .� a a in r ui �n a ip n� .r v w � Ow �f y,i O� rrrr ' � N.id t7� tJi O 0� N O�.p a m m O�m m r O+ 10 I\ � .p�O� C O t7i O O O O O O O O � � � N o O v ! �, S o � 000 g �� o� ; o�� .. w r r �.o. n� N ��tn - ` . . W t+ N�� v N iJ� NN ►�+ p � ��Y - � . . � . A .> 10 W J d�tl�lTO � O�' {DF+ �i � � . � J N OOO �O OOOOp QQp 'W WNQ+ m I rNtn O O O O 0�0000 pp0 t7i �-'p r . A .100 �D O O O 00000 pp0 A V�O Vi � � v O o n� r r a n� �n .tn 1J P+ N m G 01 W N N i1 !J�N {T . - 'O��'tT � .fa W y {D W.{D 10 m 47�O�� O h+m �p .. v+ o� oo �w.+ o °o c °o °ogg °o �° °oo° � �� tD . 8 00000 $ oo � �nov� N �p � � � N F+ F' 0 W p� Vi �i G1 0� A h+O+ 01 O ✓ N N . . . �.+«r o o v� �o a a a �n ,� ,.. i., a r n> «+ t0 01 h+ 1�+ �I h+ N(T ll� 10 ID p � F+N 1p � N �'tD II+ O O O 00000 � � D w aN ~ O . t7� 000 �.+ O C O 000 00 np O +�a t�i�t�n0 � Q1 N � N MTC SHARE OF CAPITAL COSTS Ten percent of the capital costs, about S9 million, are to be provided by the Metropolitan Transit Commission, the. region's public transit agency. Two financing methods exist through which this could be accomplished. One option is a direct appropriation of state funds to the MTC by the Nlinnesota Legislature. This means of fi.nancing would be justified by the increased tax revenues to the state which would result from DPM construction. The expenditure of $90 million on the project would create a stimulus to 'the local economy through increased payroll and material purchases. These expenditures, in turn, create second and third order increases in business activity, as the additional monies are circulated through the economy. This phenomenon produces an economic benefit qreater than the original investment, and is known as the GNP multiplier effect. It is estimated that DPM construction would result in a $110 ma.11ion boost to the economy of the State of Minnesota. The additional economic activity would generate higher income tax revenues and sales tax revenues to the state. Attachment A traces the GNP multiplier effect, and estimates the increase in state revenues resulting from DPM construction to be between $8.1 and 59.7 million. Because much of the cost of the.DPM would be federally funded, this increase in state revenues represents a net increase resulting from an inflow of funds to the region. It would not occur if the project is not implemented. If the DPM is not constructed those federal funds would not be available for other transportation improvements in the reqion. Since the funding is tied to DPM use, it would go to one of the other cities planning DPM systems. , The second option would be for the MTC to fund its share of the capital costs through the issuance of bonds. This a�thod would require action by the Minnesota Legislature to extend the MTC's bonding authority. Under the existing bonding mechanism, revenues to retire bonds are derived from ad valorem property tax levy, which is in addition to the 1.72 mill levy established for operating purposes. This tax is levied in the Transit Taxing District, which is based upon areas served by transit in the metropolitan area. The amount by which that tax levy would have to be increased to retire $9 million in bonds is difficult to predict, as it would depend upon the life of the bonds, prevailing interest rates, and the value of the property being taxed. However, based upon past experience, an increase of about an eighth of a atill might be expected. ' 22 . , . . . � : � �, � N �O �O .�py1� t� O 00 OQOO QOO O 000 � � 000 �l1 � Q O� C� � O 00 O OOOS O O00 � parN , C N a� O e' O a� iA u'� in eV 1� n .r O .•� �O O� '� r� .r t!1 � .ti N � N Ca C! �! �'7 CD O O O � en � � N N 1� r n ti V' f� N 01 h . I 10 �0 � 1fl rl N . �. 1(1 U1 C1 N aN �D ir O 00 000p00 Op 000 � OOpN � � u�f � .�-� e��+ o 00 0 0000 O o0o a nm � � � s a�o� o o co t�n r vi v� a� �i.+e vi�o P1 nl V' �i �I N N �O �O �+1 01 P1 m Q N .M P7 � �0 NIfD l0 l� 1� r�l lY tfl �O m ffl �f1 tfl M 1A .d N . 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' a �y � O� .� O � �n O 00 000p O O 000 m epO ,•y f � tEA. fa N � e`1 O 00 00000 O 000 � O .r M r�l � i rA O�ns o 00 � �0�0.�+0 O ve+� �o e� m � �p � ,� ^'� o� .� v v .��t1 r1 a O+ O.r v aD a� e� .r ev � � � () N N e t+1 V R^I Q O N �0 O� � H n� � v �n w� � .r ,.� � � N n ! • � � n oe°+ � g °o� $ °oo° o°OO °o °o ° � � �°o�`�' i � a m m �am e� o 00 00000 0 0 � � N �v ,•i � . V � �.�i N �.Niv � °� a W o�o � O °o0 :N i � W 01 N w�/ N Q Q P1 O N �O m E iA Q P'1 e N P�1 nd nM i W � �� i S MZ a� O� en <r Op 00 0p000 O C 00 0� OONnf � C 7 A+ Ou7�n N O OIO 00000 O O 00 � � �� a �+ o+.ev.+� o 0 0 0 0+o�m �p s ni.+r+ `,' o a � O n/ fV .�1 V O .�1�.�1 m t0 �0 O t7 O N �a1 O ry N � G 1+ N O1 �! Q Q N f� nr 1l1 �O ' Qeq eq N �P1 ,.1 � - . __ __._ '. . . � . - p IpA O m � �'m m S SS 8So8S o 00o e goaN �. ou+ �o .+ o 00 00000 0 00o N +n �i '~ N .� V� Q t� 0� �D � � �OO CO OOO n � f1 � �O ry P N Pf P1 P1 d' m R fV � .. . . � �N� �.lV .� - .!'1 � .d . � . _ - . ' . . . . - . ' ' i ' � . ' ' .' .. . � j� C L �r 1 Gg1 C . �1 � C � y$ 4 � L W Q� � � S T � Gt ►r U ' � a C aMi � au .y�i 0 w 0. .p.� F s 4a. S m o�i m ^ - 0�1 7�.�i y � i t am+ U � � . GG Gi t� 'C O 'O 7 L 4 > �+ . � '� � 1 I 4 +a U ^ O� 01 � D� +V L � L � � 7 .� C! W W G �I M 7 ^+ m �p �p +,��al.��i+al 4 C� L � C C m a�i � � L m +�i � � � � C�L1 m RI m Q Y J � F E � � �C�1 � 6 � � @ � ,Ui p 67 �O 'p L 4 Cl C f!! 4 0 (0 > W W Xt� % W > L .�M W � 4 C F H. O N W m m R O S 1� U ' � N O .i �+I 21 ' ---' --_ ' CITY SHARE OF CAPITAL GOSTS Ten percent of the capital costs, approximately $9 million is to be provided by the City of Saint Paul. The City expects to provide a maximum of 55.6 million of its portion of the local share from the sale of General Obligation Bonds*, with the remainder to be provided by inkind contributions including publicly owned right-of-way and participation i.n the construction of some system elements or portions thereof. ., * The annual bonding authorization of the City of Saint Paul is $6.5 million per year. It is anticipated that the bond commitment will be spread over a three year period from 1979 to 1982. 23 APPENDIX - Evaluation of the Potential "GNP" Multiplier Effects of the Construction of the St. Paul DPM System .. TECHNICAL MEMORANDUM . TO: �Richasd Wolsfeld November 29, 1978 Director BRW/Raiser Joint Venture FROM: Robert J. Harmon & Assaciates, Inc. SUBJECT: Evaluation of the Potential "GNP" Multi lier Ef ects o the Construction of the St. Pau DPM Syste'm . � ��i��r.��.��...��r��.��.�w� INTRODUCTION The construction of any large transportation or public works project with Federal -funds provides an economic stimulus to the local . - economy. The "outside money" that is spent in the local area pro- duces increases in payroll and material purchases. In turn, these expenditures generate sales and •income tax revenues which .produce second and thi.�d "order" increases in busincss activity. In this me.�norandum, RHA traces this cycle of economa.c stimulus to evaluate the "order of magnitude" economic effects of the construc- tion of the St. Paul Downtown People-Mover Project. The cost es- timates used as the basis for this analysis are the most recent $90 mi.11ion cost figures prepared by Raiser E�agineers. 1/ This analysis of the "GNP" multiplier effects of the St. Paul DPM Project represent an updated evaluation of a similar effort com- pleted in August 1978 . 2/ I ANALYTICAL APPRQACIi In order to determine the cumulative economic impact of the Down- town People Mover System. proposed in the City of St. Paul, a six step analytical approach was undertaken. These six steps are pre- sented� in chronological sequence on the following page. Subsequently the key assumptions, results and conclusions of each step are des- cribed in detail. This basic methodology has been utilized for large scale UMTA sponsored transit projects in ten other major U.S. cities. 1/ Reference Kaiser Engineer System Cost Estim3tes prepared for the MTC and the City of St. Paul, July, 1978 which was updated and revised in September, 1978. 2/ The previous "GNP" multiplier analysis was conducted for the preliminary upper range cost estimate prepared in July of I978. _2� Step 1. Initially, the most current construction cost estimates were analyzed by individual eiement. Step 2. The labor (payroll) components were further examined to verify manpower requirements. � Step 3 . In turn, the geographic distribution of ' construction experiditures was estimated to identify the focus of new income and sales expenditures. � Step 4. Applying natio�ally established 3/ self-sufficiency indices (economic rnultiplier relationships) the cumulative Gross National Product (GNP) effects � were estimated. Step 5. The indirect and induced employment gains asso- ciated with the GNP e�fects were determined. Step 6. The cumulative income, retail sales and employment � impacts were examined to estimate tax revenue gains associated with the DPM system construction pha�se. PERTINENT OBSERVATIONS � The relevant scale of a $90 million public infrastructure invest- " ment is difficult to comprehend. By way of economic comparison�� to other locally sponsored projects, the St. Paul DPM system represents the equivalent of ten Science Museum buildings o= nine �Mears Park. apartment buildings. 4/ From the standpoint of economic � impact, the labor component (i.e. , engineering, craftsmen and laborers) of the total const=uc- tion cost is the most significant. Current engineering estimates indicate that 45$ of the total St. Paul DPM system construction, engineering and administration. costs are spent for wages, salaries, . and fringe benefits 5/. This would mean that approximately $40 million of the total project costs would be directly spent for employment. The importance of this fact to the local construction trades is examined in the next step of the overall economic evalu- ation. � .. 3/ See. the Economic Base of the American Cities, the University of Washington Press 1971. 4/ The Science Museum building cost approximately $8.5 million and the Mears Park apartment building approximately $10.0 million at the time of constsuction. 5/ It is estimated the common laborers receive approximately $15,000 plus fringe benefits and skil�ed craftsmen $22 ,000 - $26 ,000 plus fringe benefits. o �� o x o m n � ro ro m � � c�e c�a � w n c�u � a . •• x �r � a � ►� �c rt n a�► r o � � w � o a o �v �� , n K � rt � K � � m b � � ' K a . . � � n � � r�n . o �� c�e m �* a . � rt � � rt a r- . a � . m °' o � � � � t~-+ t�"� O 3 m c� r* � ro �a c o �u � � � x s � a �n n � N crtD � � w t-� r N tn t� w N rn I� o► e� p� H G. � o 0 0 0 �t • � o � � � *zd � . � � � a r � � -. � a r �� b � N b m � � 0 N ►C C ' � aa � � � PI' �'i F"� � � c� a z - �G C w �\tyn ft C � fi �p O fD dp � 3 cr p� O 7 . M Q O ►� n � cu . � c�t o (o 0 o rwt � � o 0 0 0 � w � cu rt rt t� h+- C . G O N- fD � K � O A f�D rt a' � a c� rt � a� � � �\ c� . . •abEd buzMOTto� a� uo ur�oqs Z aTqEs uT pa�uasaid asp sis�TEUE siu� �o s�Tnsaz aus •uoissa�ozd so �3ES� ZgnpinTpui �q apE� aq TTtM sa�E�i�sa soqQZ STS�TEUp dt19 TEUT3 a� uI -s��aCozd �TSUE=� �QMapinb zo� spi�perQ�s �Lz�snpui �oz3 panisap asaM sa�QU��sa TSOT�2�T3TSSE'r� =oqQt TEiauab aus •��aCo=d au�. 3o uot�ESnp at� zo3 �a��iaP�n aq o�. X.zoM 3o sxpa�I upiu ani�pTnum� TE�o� (£) P� spaau sEa� �ad (Z) �LTOT�2�T3TSSPt� soq�t TB,zauab (Z) �Tq pauiu�xa asaM �ua�s�S �IdQ Tnpd '�S pasodo=d au� �o s�ua�uasznbas �ar�od�ui auS uia�s S t�IdQ '[nQd '�S au� �o s�uaivasin ag zaMO upy� a� a�gnTEng -- Z da�S ' 8L6T �aquza�.dag 'TnEd '�S �o ��T� a� P� ,ZHt au� �o� pa=Eda�d a�.Earz�.sa �.so� T2uz� uta�s�g sza�utbu3 iasz2x :a�=nog s�so� uot��tTQ�.sui a�is-uo sapnTaul %E 0' 0 6 'IKZOZ 8' L . ��uabu�r�uo� uoz�.�adsul p� . " 0'L uot��uTp�oo� �uot�EZ�.szutmp� 0' OT �EM-�o-s�.ubzg � bu-riaau-rbu� Z' t� sattddng � sTgiia�Ey� O'6Z /E (TTo��Ed) =oQ�Z - � �unou� �uaivaT� �so� {SNOIZZI1nT $) sa�QUii�s� troz��ns�suo� WdQ TnEd '�S �o �op�a=g T �'ISKZ � :Ma a ur,o s ' ui pa�uasaid si �.uaivaTa �so� Tpnpzntput �qTa�EUrr�sa si��o uMOp�asq � •�uatuaTdurr o� uoztTz� 06$ �Ta�p�o.zdd� a=inbaz 'rtTM ani�QU�a�TE pa��aTas a� �e� a�Q�ipuz WdQ TnEd '�S pasodosd aq� so3 sa��uT�.sa �so� uoz��ni�.suoa pa�szTqnd �TT�ua�az �sou� aus uoi�p�T�T�uapl �.uauiaT� �so' -- t da�S _ £ _ � � - 5 - . Additional direct employment would be generated by system construc- tion related expenditures for final engineering and design, con- struction management, and project administration and coordination. A large portion of these work items are subcontracted to local and national consultant engineering firms. Contractual requirements of the MTC/City of St. Paul will emphasize local project offices and local firm associations. These policies ensure that a high propor.tion of these payroll monies will be recycled in the local Twin Cities Metropolitan Area economy. These elements of the first increment of the rapid transit system construction will require approximately 350 man years of professional effort. In summary, the total direct employment impact of this project would be approximately 1,250 cumulative man years of work. A breakdown of this estimate of the cumulative direct employment impact is provided in Table 3 shown below: TABI,E 3 . Cumulative Direct Employment Impacts St. Paul DPM System Type of Employment Cumul.ative Man Years a/. Skilled C=aftsmen 400 Laborers (coimnon) 400 Construction Managers 100 Professional Enginesrs/ 350 . Administration TOTAL 1,250 a/ Rounded Estimate Source: Robert J. Harmon & Associates . •' - 6 - , . . PERTINENT OBSERVATIONS Local construction, architectu�al and engineering firms and the trade unions will be the greatest beneficiaries of the direct employment gains attributable to the St. Paul DPM system con- . struction. It is also reasonable to expect that the predominant share of the general laborers will be drawn from the Twin Cities Metropolitan Area work force. Certai.n highly specialized construction skills, construction management and system control work will necessitate hiring indi- viduals now residing outside the State of Minnesota. Due to the fact that the vast majority of these professionals will reside in the Twin Cities Metropolitan Area during the construction period, the indirect and induced economic �impact of their salaries will be retained within the region. A complete examination of the geographic distribution of the payroll and material purchase ex- penditures associated with this project is presented in the next step of the overall economic evaluation. � Step 3 -- Determine the Geographic Distribution of Construction Expenditures , The most probable geographic distribution of the construction ex- penditures of the St. Paul DPM System Project was estimated for _ the Twin Cities Metropolitan Area, the 5tate of Minnesota, outside _ of Twin Cities Area, and 'outside the State of Mi.nnesota. These - estimates were based on factors derived from: (1) the expenditure profiles of large scale construction projects completed in the Twin Cities Metropolitan Area since 1970 and (2) the recent exper- ience of Raiser Engineers. The results of this analysis are pre- sented in Table 4 and indicate that: • Nearly 65$ (i.e. , $58 million) of �the total con- struction expenditures related to the St. Paul DPM would occur within the Twin Cities Metropolitan Area. • Approximately 10$ (i.e. , $10 million) of the total system construction expenditures would occur within the S tate of Minnesota but outside the Twin Cities Metropolitan Area. • The remaining 25$ (i.e. , $22 million) of the tota�, system construction expenditures would occur out- • side the S tate of Minnesota. The predominant share (85$.) of these expenditures would be in the form of materials and supplies purchases {vehicles, other system hardware items, etc.�) • Overall, nearly 90$ of the labor, professional engineering, management, and related fees and taxes - and 50$ of the materials, supplies and right-of-way expenditures will be directly captured by the State � of Minnesota. � � - 7 - PERTINENT OBSERVATI�ONS Stated in GNP economic ternts, the construction of the St. Paul DPM system would directly infuse approximately $55 mi.11ion of new income 6/ into the economy of the State of Minnesota during the three year construction• period. In addition, nearly 90$ , or approximately 1,100 man years of the direct employment require- ments would be generated within the Twin Cities Metropolitan Area. Because these potential income and employment gains are net incremental (direct) impacts, the additional expenditures in the local economy induce further job creation, business develop- ment and savings. In the next step of this overall economic ` evaluation, the GNP multiplier facto=s for this type of public works i.nvestment in the State of Minnesota are derived to deter- _ mine the indirect and induced economic impact of the St. Paul DPM system construction. ' TJIDLE 4 GEOCRAPHIC DISTRIBUTION OF TliE CONSTAUCTION EXPENDITURES , a/ (Millions) Geoqraphic 1►rea f Labor c/ Matezials Sn inaeria i Admiaistrstion, Continqeacy f/ ?otal L Supp sea d/ Ra4 t-o -Nay � Coos ination i nspeCtion �rin Cities Meuo- 522 518 $7 $5 S6 $58 iolitan Asta . Outsids of Missne- 1 6 1 1 1 10 sota T++in Cities � Ar�a Outside the State oi esinaesots 1 17 2 1 1 22 TOT112. S2� 5�1 S10 S7 $i $90 a/ 1111 e:timat�s rounded to nuzsst S1 million. b/ Estimstes baaed on expaaditure protiles on larqe saale construation projscis eomplated in 'ilin Citiss M�tropolitan Area. c/ 2ncludes vagss ai►d frinqe benefits. Represents �St of th� total coastruction coata of $81 million. d/ Ineludea local utility modificatioas. _/ Ineludes approximat�ly 53.5 millioa ia righes-of-way acquisitioa coats. � Estimaud at lOt of total syat�m construction costs of $81 millioa. •. Source: Robert J. Harmon i I►ssociatss 6/ The estimate of $55 million reflects the fact that 20$ of the total DPM construction expenditures captured by the State of Minnesota (i.e. , $68 iaillion) are paid �for by local share matching funds . � - 8 - . Step 4 -- Calculate the GNP Multiplier Effects The evaluation of the economic impact of the St. Paul DPM must in- clude the analysis of the successive round of expenditures of goods, materials and services and the reinvestment �and savings by local firms, employed individuals and governmental agencies receiving direct income from the income from the initial construction ex- penditure. The economic multiplier effect (measured in GNP terms) of new income infused into a regional economy, such as the Twin Cities Metropolitan Area, is calculated through the application of a self-sufficiency index 7/, In 1960, the Twin Cities self- sufficiency was calculated to be approximately 60$ which was the median for the twenty largest metropolitan areas in the United States 8/. • At this level of reqional economic self-sufficiency, new income is recycled through ten separate repurchases of goods, material and services before the net income available for repurchase is effect- ively diminished. The cumulative sum of the total expenditures - (i.e. , direct, indirect and induced new .income) generated by the original expenditure (i.e. , regional investment) is compared in a ratio termed a GNP multiplier. For example, if the total direct, indirect, and induced expenditures associated with a $1 billion project were $2 .4 million, then the GNP multiplier would be 2.4. In the case of the Twin Cities Metropolitan Area, the GNP multiplier for "net" sales or investment in the local �economy was estimated to be approximately 2.0 in 1960. By 1980, it would be reasonable : to expect that the GNP multiplier for "net" sales or investment in the Twin Cities Metropolitan Area would be between 2.2 and 2.3. 9/ R8A is currently having the Economic Research Divisian of the U.S. Department of Conanerce make a special run of the RIM (Regional Industrial Multiplier) System to confirm the current GNP multiplier ratio for the Twin Cities Metropolitan Area. To maintain a conservative posture in the overall economic evalu- ation, GNP multiplier of approximately 2.0, not 2.2, was applied for both the �'win Cities Metropolitan Area and the State of Minne- sota, to the estimates of the geographic distribution of the con- struction expenditures of the St. Paul DPM System. 10/ The results of this analysis which are presented in Table 5 inda.cated that: 7/ These indices are derived from employment data that established the minimum necessary to support the local labor force .market. . Excess de:riand is assumed to be export factor, the relafi�ionship between the two is calculated as the self-sufficiency index. See The Economic Base of American Cities, the University, of Washington Press, 1971. 8/ Ibid as presented by Edward L. Ulman, Michael E. Dacey, and . Harold Brodsky. . 9/ The Metropolitan Council's report on the Twin Cities Economy, 1977. -.�__-��- -a-.-- -�- prepared by the University of Minnesota indicates a 1.53 GNP muTti- � plier on local. construction projects. The . RHA analysis alreac�y ie�ed the� $72.0 i.n Federal grant monies to 55.0 of "net" local payroll or material purchase. Therefore the equivalent MTC calculated multiplier would be 1.53 x 1.31 = 2. 0043. 10/ See Table 4. - 12 - PERTINENT OBSERVATIONS The total direct and indirect employment that will be generated by the first increment of the St. Paul DPM System would be at least 3,410 maa years of work (i.e. , 1,250 direct plus 2,160 in- direct) . On an annual basis, 14/ the total employment impact of . the system's construction represents between 800 and 900 full time jobs within the State of Minnesota. Approxiniately 700 of these new job opportunities would be in the Twin Cities Metro- , politan Area. Step 6 -- Determine the Tax Revenue Gains Attributable Directly . or Indirectly to the First Phase System The tax revenues that would result directly or indirectly from " the construction of the St. Paul DPM System were analyzed by: (1) individual tax base (i.e. , source) and (2) geographic area on a cumulative basis ove= the duration of the construction period. These estimates were derived utilizing average per capita expen- " diture factors and personal income rates for residents of the State of Minnesota. The results of this evaluation which are presented in Table 7 indicate that: . • The State of Minnesota would receive between $4.6 - 5.8 nullion in sales and income tax revenues frcm the payroll expenditures and supply and material purchases of the St. Paul DPM System. • The indirect and induced eccnomic activity gener- ated by these original expenditu=es would generate an additional $3.5 - 3 .9 million in sales and income tax levies between 1979 - 1984. • In total, the State of Minnesota would receive betweeri $8 .1 - 9.7 million in tax xevenues from an original investment of 10$ (i.e. , $9.0 million) (local share) in the system capital costs. .. 14/ During the approxi.mate three year construction period. The indirect impacts would continue for about one year afterwards. . - 11 - ' • The total potential direct salary payments to individuals that would be generated by the estimated GNP niultiplier impact of the system in the State of Minnesota would be nearly $40 million. • Nearly. 85$, os approximately 33 mi.11ion of the � total $39 million would cccur in the Twin Cities Metropolitan Area. • This level of new payroll income in the State of Mi.nnesota represents the potential for over 2.200 mau years of employment. • Again, nearly 85$ of this total or approximately . 1,900 potential man years of work would be gener- ated in 'the Twin Cities Metropolitan Area. T]►8LE 6 IHDIRE�T AHp INDUCED EMFlA1[1�tENT IMP1►CTS OF THE FS]tST INCRLM�iT Qp THE ST. PJ1I7L RAPID TRJlMSIT SYSTLM - (19�9 - 1983) a/ ' Geoazaphic Asaa 2ndizeet i Total Potsntial !!an Years ot . In u�eed EeonomiC Oireet Sa a r a ents FIO�T Generated d/ Jlctivitv to In v na s c (mi2lions� (millions) lvin Cities 547.0 ;33.0 1.833 Metropolitan 11raa !linn�sota - Outsidt 8,0 6�� 333 21+in Citiss ]lrea TOT11L SSS.O $39.0 2,160 a/ all estimates rounded to nearest millioa. b/ Sae Table 5. -� cf Esei,mated at 70 perc�nt o! cotsl nKr income generated indireatly or induc�d from oriqiaal construction exp�adiivses. df averaqe salary assumed to be $18,000 ia 19B1 (mid-year of impact). Souree: Robert J, Harmon i ]lssociates ,• I � � � � - 9 • The economy of the State of Minnesota will receive twelve times (i.e. , $116 million of) an original investment of 10$ of the total costs of $90 million . in cumulative economic activity, measured in GNP � terms. � • Approximately 85$, or nearly $95 million, of the economic� activity gains generated -directly or in- directly by the system construction expenditures will occur in the Twin Cities Metropolitan Area. • In dollar ratios this means that over $12 in new� economic activity will be generated in the State of Minnesota for every $1 invested by a 10$ support of the total capital costs of the system. • The Twin Cities Metropolitan Area will receive the equivalent of $10 for every $1 invested by . - the State of Minnesota (assuming a 10$ capital contribution) . TASLE S TOTAL ECONOMIC IMPACT � OF TSE ST. P1WL DPM SYSTEM COHSTRUCTION EXPENDITURES (S i�lillions) Ceoqraphic Ar�a Direct Impaci af Indirect i Total Impsct f �n u�3'maact bf SVin Cities 547.0 547.0 S 9�.0 Metropolitaa Area Stats oi Mian�sota 8.0 8.0 ' 16.0 • TOTJIL SSS.O 555.0 ;110.0 � S�e distribution o! construction eapeaditures » Tabls �. Totsl impaci vould oecur beeween 1980 - 1994 (oa�,year aitez systm eompletionl. � It should be not�d that a 2.2 multipliar was estimated froa th� self-sufficieacy assalysis of the Metropolitan Area but th� lower multipliez of 2.0 ras utilized to be oonservative. - c/ St .th� •gross' GNP multiplier of 1.53 for local construction projeete, calculated by the Oniversity of Minnesota in 197�, was applied to th� 572 million in Pedesal qranL dollars, tl�e saem result of $110 miilioa would b� reached. Source: Aobszt J, xasmon i Associat�s, tnc. ,• - 10 - • PERTINENT OBSERVATIONS The foregoing analysis outlines the positive economic gains to the State of Nlinnesota and the Twin Cities Metropolitan Area if the ' City proceeds with the decision to build the St. Paul DPM System. Conversely, if the City would decide not to build the System, these .pot�ential economic benefits would be lost and £rom an eco- � nomic standpoint should be viewed as "opportunity costs" . 11/ In other words, the federal money is only available to the City of St. Paul for the sole gurposes of constructing a DPM System. Fu=thermore, the opportunity to receive additional economic benefits from the future receipt of discretionary funds for eco- nomic development would be considerably delayed or foregone to other metropolitan areas 12/ of the United States. The indirect and induced employment impacts of the construction expenditures of St. �Paul DPM are examined in the next step of� the overall economic evaluation. Step 5 -- Determine the Indirect and Induced Em loyment Impacts � � The indirect and induced employment impacts of new income gener- ation in a regional economy can only be validly estimated on an "order of magnitude" basis. The state-of-the-art af econometrics has advanced to the point where regional income expenditures can be traced throuqh each cycle by segment of the economy, however, due to time limitations, for the purpose of this economic analy- - sis, it was deemed suitable to simply apply an estimate of the - percentage of cumulative new income that results in direct salary payments to individuals. Based on a review of the most recent results of the econometrics models of the University of Michigan and the Wharton School of Business, it was estimated that approximately 70$ 13/ of new i.n- come generated in a reqional economy takes the form of direct salary payments to individuals. This percentage of direct salary payments to individuals was applied to the estimated levels vf indirect and induced economic activity resulting from the St. Paul Downtown People Mover System. The results of this analysis _ ___ which are presented in Table 6 shown on next page indicate that: 11/ Opportunity costs are defined as a benefit or gain that is forgone and therefore viewed as a cost of a null decision. 12/ Currently there are over seven second tier Metropoli�an areas seeki.ng capital grant monies froRn UMTA for DPM 'projects. These include: Miami, Jacksonville, Norfolk, St. Louis, Indianapolis, Atlanta, and Baltimore. . 13/ Recent estimates by Stanford Research Institute indicated ?2$ of new income generated in a regional economy take the form of direct payments to individuals. - � �� s��stxssY ! aomseR 'f zzsqo� esase►os •�oa�osd WdG ir4d '3S �Y� 3o uoT3r�asmstdacr s�s 30 �tnsss e se s�s�S at{� v�Sn ps3�s'us6 t�nvs� ssav�snq/uoi�vsnuoa p��vas�v� oz sLqQ3nQts;3e xr3 saTes P+� �o= Ta�oq T�uaassavS uj s:sd ssd uoTTTTm C- 0 LS ,V3 �pni��T 3ou op s�aemc3s3 %P •�ocaruu�yt ;o s�:aS �YS vtt�tn p�seqomd tpoo6 aso� dTvo so; sj a3�3sa woj scry •auaassd ► 3o xsy ssivs s3e�s o� =��qns sq TiFw s��Tddns pv� cjiFsv�sm Tr�o3 aNa 30 �b��uaossd 3*V� uwoux �ov •s �� '�� sstfa s1f /a io �3=35 �tt3 c3 (�issdosd b 's�naP�s+s TsaoT .tq •�aoisusi;� �bessn4 i t+TPntax�) rsxo; snwveTT�orjm ptt* wTos �moou� v; psed t� y� vo tamoavT Tevoasod ssosb ;o �va�sod OT-6 ��asq z�q3 psepveas �st3 uo p�seg %q 'yoF;e=scTu?mPe pete buFs�svTbva •uof�anszsnoo s�pntavi /e . 6'BS 39Y1[3A1� L'6 - i'BS TYJ.OS =3o�aWjFT ;O i3T�5 . 6'E - 5'ES I1CS0.L8f1S 6'£ - S'fS 6ES s3�smdtg dssteS P��PvI Qtto z�ssTPuI 'H B'S - 9'fS T1fSQLHAS L't - 6' � Lf - ZL s�FTddrg pt�s t*Fss�sW uo xs= ssT�g j t'f - L'E5 TtS j tT��sd t�oFaansasuo� i�asTC •1i �� 3S1fH X1tS 1t1AS3NNIM d0 3S�'i5 (saoFitTK S) � waa zn�ra •zs awL ae rsosa� io �,tras asJ, xoa aasrr�axa� snNanax ms c �arrz � . . _ - _____ . - _._. � �-- . �.:: � - ST. PAUL �1NNT4�II�N REQ��.� Il�f� PRt��I� , ' t�A�' IS A DO�NTQi�' FEOPLE M�VER? . A simpl.a, sutomsted, small vehicle trari�it syat�. . Fuuctions ats a horizonal alenator. . S}�ds up to 30 m.p.�i. arith �ffici�nt e.lectric ProPulsica syst�s. . Passenger traiting tim�s cf 2 to 6 miautss. . Gl�te c��o]..Led vehicles aad stati.oas. . Servss a varie�r of pa��aqnqers typ+�s a�d needa. . Sa�e, r+sli:t�bls, Prc�vea tec�molo9Y• � ' � NSAT 'W�LL A D01�1t+1"1'C�0lt PEOPLE IrlOVE"R DO FOR ST. PAUZ? . Ca�ap3.a�aat tti� skyvraY �Ys'� bY l:�k#.ag th� �os! di�t�at a�i.�ri.� e�n ,, ` i.e. Stats C�pitc�l. Civia C�ater. Lc�ertawa tc S�ve�tth �1.ace. . Zntsg�r�ta the rsgioaal l�is ayste� by lffi�ientl� a�d cc�v�i.�ttl� d�ast`�i bntiag g�topl� w�£thin the dowrtts�n. . Interc�pt mauy autaamobiles at ae� parkinq �aci.l�ties �t t.is� �riaq� of • _ . ton+a. re�dizeiac3 do�'to�n Par'kinq Pcrablams. � . E'ncouzaq� 1i.viag ia or naar tha� dt�wnfi�wa sad g�mater u�s'of ttue do�taara , � a ms�o= c�a�r� in ths rsgioa. . St�utlate n�+�r prieste invest��ts with a�ahasis ou� c:o�e�c3.a1 aa�'i l�usi� ' de�velo�eat. _ _ IS A PEOPLE 1�3VER A NE� IDEA? � P=aseat�y 17' People Mpver systaens ar� op�ratir:q in tl� II.S, a�ct Ea�cops. " aystem� �ere de�igaed tor sinqle purpc�se trav�l. ar�as. As a �ss�lt, t3�tea�e s��as are predamiaate�ly ls�cats�i ia re�rsatioxi parks or a#.rpoz� today. When th�e gralimi.riary euqineering resnl.ts are cc�pl�t,ad a� if th� �tc�s iopla Mov�er is app�oved for pownt�wn St. Pau]., ths City Couuci.l sad l�ttape�l.�t�n �snsit Comamiss�ion will sel�ct a syst� �ra�a saversl w�.stiaq msaufs�turtra at�ich ' mr+sta� the do�amto�mr na�is. � . WSO EST3�18LISAED TFIE DOi�P4Tt79iTN PEOPZE MQVER PROGRAM3 . 7.n A'pril. 1976, �he Urban Mass Tzmaaportation Admi.t�.�tratioa {i�i) anaousc a � �. projec� to damos�trat� the ben�efit: of auto�►a�tad p�l.� mover s�st�s in •� dc�ratc�vrn area�. Cities frc�n t�rouqhout the couatxy ware ask�d to submi:t sals descsibiaq hc�+ ttuir do+�rYtowri araas could d�velog a daw::to� �evPla ma�sr � te�m. � St. Paul �as oae cf the �itisas selected for this pr.ogzam. In March. 1977 th� City of St. Paul and the Metrapolitan Tr��it-Coms�iss�ion �stab- 1.3.sh�ci a �rk proqram to compYete prelia�f.nary enqi�sring of ti�'daa�al�aan 1Q mc�var. A $te�riag Coam�ittee aras orqaniz�d, cvaiposed of city, �tste a�d `=s officials. Four advisor� Cc�anittees were also established: n . � ; f 1 €-! ��. Urban Deve�opaaer�t Co�ittee: Consists of property c�wners, . developers, and downtown � orqani.zation xepresentatives. Community Advisory Coam�ittee: St. Paul neighborhooc� and regional ' � representatives. , Technical Task Force: Regional and lxal governmez�t st�ff representatives. Financial Advisory Conenittee: Downtown busin�ss ccxmmuiity representatives. . - � The studiss began in October. 1977 to determine guideway anci station loca- - . - tions, benefits and costs, financial plans, syste� specifications, and environtnental impact. WHAT WILL THE ST. PAUL PEOPLE MOVER BE LIRE? A brief description of the St. Paul People I�over system: Lenqth: 2.S miles of double lane, 2 way guic2eway. Stations: 13 each with 2 lev�ls, total accessibility for. handi- � capped, complete security �yst�m, and clima�t� controlled. . Vehieies: 24 with speeds of up to 30 m.p.h., and�climate con- - trolled. Sours of Operation: 6:45 a.m. to 1Os00 p.m. daily and extended for special events. ; . E'ares: ' 25C on opening day - 1983 Travel Timesr , Capitol to 7th Place 5 minutes United Hospita.ls to 7th Place 5 minut�s � Lafayette Parking to 7th Place 4 minutes Developdnent Schedule: Final design and engineerirtg - 1979-80 Construction 1980-82 Public operation - �late 19$3 . WAO WILL RIDE TF� DOWL�TOWN PEOPI,E MOVER? Today approximately 300.,000 motor vehicle trips per day are made within the St. Pau1 downtown area by employees, shoppers, and visitors. By 1990, thi� ntsmber is eacpected `��; ta inc�ease to 550,000 per day because of additianal develap�nt and use of downtcvm facilities. There are approximately 67,000 employees in the c�owntown a,rea toda�y. - With •additianal develogment and expansion, this nwnber is exgected to :increase to 82,Qi00 en►ployees by-1390. More than a million people visited the Civic c�t�r i.zi 1977 and by 1990, dor�vtztown visitors ar� expected to number between 3 and 4 millfon. The mile lonq downtown skyway system is e�ccpected to davble, in size by 1983. Today, 30,000 to 40,000 da►ily pedestrzan trips are m,►de in its 10 blocl� ares. These are ma3or factors which will �.n�luence people mover ridexship. _ 2 � , . -- • � � �, H0�1 MANY R�DERS? � F � 4 Projected peop].e mover rider�hip by 1990 is expected to be approxi„�ately �5, . riders per day. Of this number, 55�► will be general riders frcm the dc��owsi (emgloyees, 'ahaPPers. and visitors) , 27$ frcm bus transfers �and 18$ fa�om fzin park�iq areas. j _ i People Mover riders will ntiove auaong activity centers in less titne a�id greater con- ve�nience than walking or ma3cinq at�to or bus trips. The people mover wi},1 als cause nev� trips to these centers ahich are aot bei.rig �c+de today. ; � . � HOA� �TL�, THE PEOPLE I�OVLR A�'FECT DEVEI�Oi�1�iT? . � i A People L�Sover sy�tem :tn dcawntc�wn St. Paul couid expand development of shogp � areas, cancentrate goode and service� at sp+eci.fic locations, gro�ride qv3.ck ac �s�a to ineupensive aitd convenient frinqe garkinq, r�duce street trs�fic and p�ll.u ` ' tion, connect n►ajar activity centers and stimulste ,other devela�rtent land� in!„ - - St. Paul. � Zn tlie 12 year period betweer► 1978 arsd 1990, the people mover coul.d be a $eci,�ive in�luence on a dowr�town denelap�ent expansion proq�am that cvuid groduce $3f�0�`�OO,Q00 to $375,000,000 in new pr�vate investment in Che followinq faailit�.es. DEVELOPMENT: 1978 t� ].990 . 2,450.000 sq. ft. of af�ice space (�3a� increa�se oner ta�Y) . . 1,030,000 sq. ft. of retail space (?��k increa►se); ; , . 3,350 hotel roans (96� inere�ase) . 3,360 housinq units • (136+� ir�crease) Of this potentia2., the people mover could directly �.n€luence the d�velop�nent �s � _ . 1,040,000 sq. ft. of o€fice space 1 . 450,OOfl sq. ft. of retail apace� ± . 975 hotel ro� tnaw or rehabilitated) � ` . 2,350 housinq units �, � � With this increased level of do�ntarm developnent 14,500 new pezataaent jrsbs �ld be added to the downtawn with 9,600 job�s directly attrib�u'kable to the people�over. �f these, Z,200 would be in new dev�lopment and �the b�lance i.n erxisti�ag taci ties. � ; HOW MUCH WILL IT COST TO BUILD? , � : _ . , The current capita2 cost estimate ta construct a DPM system is 90 million do ars.' The capital cost would }� 80$ UMTA cost, 10$ MTC c�st ar�d 10$ city cost. B . t�se of many "in place" investmants like streets and skyway bridqes, it is an�,ci ted that the city's share will be less than a l0� cash contribution. � . . HOW MUCH WILL IT �OST 3'O OPERATE? 1 - The current annnsi operating cost estimate is 2.8 a�illion dollars, of which, !� is direct labor costs. The�operating cost is the local area res�nsibilit� and' '-11 be . � 3 ,�_ . � funded by a combination af fares, advertising rev�mies, and other revanues fron� . benefitix�g praperty owners, . the City and the MTC, The £inal fi.nancial plan wil2 identify revenue sources which are prop�rtional to benefits received fram-the DPI�i WHERE ARE Wfl:WITI3 T13E PROJECT? � Since beginni.ng the studies last October, the Dow�tovvn People Mcver Cc�mmittees ,. , have held 58.public meetinqs and conducted 6 public workshops. The meetings have been hald t,o review all preliminary and fi.nai work c�mnpleted and to make deeisions � durinq. each pro�eat phase. Major P�roject Phases:' Pro�ect st�art through April Downtowri -people mover objectives and g�neral ro�tes aompleted. i�y through June . S�iection of the exact location of guide�ways and stations. July tYirough Octob�r .., ' . Ca.pital costs and operating costs prepared. October throe�qh Nov�nber � Fi.naneial plan prepa�ed. . Dscembex throu9h Julv, 1979 . . Enviranmental impact statement, financial p3an, and decis3,ons on next project phaae from: Downt� C�unity . City Council ' Metr�politan Transit Gam�nission - Metropolitan Cauncil State legislature UMTA DPM Cem�i�tee an�i Publi� Warkshvp meetings will conta.riu� throuc�� this study psrfod. Wstch far these meeting anr�,ouncements in city and. nefg�borhoc�d news- PaPers. . ' HQW D�ES THE DOWNTOWN PEOPLE MOVER FIT IN WITH SEVENTH PLACE? Qs� l�onda�►, �7uly 31. _a port�.on of 7th Street was pe�nanently close8 to auto and pedestrian traffic. This marked the first pltase of the 5eventh Phase Nlall Dev- _ elap�►er�t. By 1980, the fonser 7th Street a�ea between Cedar and Minneso�a Sts. will con�ir� a 55,000 sq. ft. encl.ased, cli.mate aontrolled retail shopp3ng ar- csde with direct ac�e�s to an enclosed park, 247,000 sq. ft. of .new_retail shops . � 4 , �. �� " �' ;:' � �! �r � �d 41�I ��. ; �' � �? f, ; I' r ', ' ��i q'�. I� ''��. „11t ��III, � y?t: � � *N�i . 4�ru jNr ; �f' � L �c: � ir;'�* �& r�4 ., �_ ,a ril �+r',�1�y ��. �^*m"a;`.,.ta�" t ° `- ;� , ,, � �� ''&,r-^"w`'' �� '' �'°�„ �,,;�tv . �. ..,rq+ ..i� " �� t `�'' +f:' I �i d . < € ,"'�- _ , � . J.: 'a4d P, .. �j� Yy��{ 7�; f.. � � '�.�,�'' 's y+ �' �-.� a ;�, r!�! 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PAUL DOWNTOWN � PEOPLE MOVER � � � i � � � � DECEMBER 1 , 1978 ' � ■ � � �� ; � � � � � � � � : � ' 588 VIIDWEST BUI�DING • SAINT PAUL, MINNESOTA 55101 � 224-5776 . � FINANCIAL ADVISORY COMMITTEE REPORT . , � To: Operation 85 Steering Committee Re: Downtown People Mover �� The Financial Advisory Committee for the Downtown People Mover � (DPM) was created by Operation ' 85 in order to carry out the following assignment: l. Study the proposed DPM from the capital and operating � points of view and in terms of its long term economic impact on the City of Saint Paul. � 2. Provide input in the development of the financial plan. 3. Identify the fairest available method by which the � private sector could provide revenue derived from the long term economic benefits of the DPM. 4 . Establish an acceptable level of financial support from � the �rivate sector toward the annual operating deficit. The Committee, which consists of twenty financial officers from � major Saint Paul corporations, initially studied the reports prepared by outside consultants with the assistance of City and Metropolitan Transit Commission staff people. Following this , � the Committee organized for more intensive study of the project, dividing itself into four sub-committees, each concerned with a basic element of the financial plan. Members of the Committee � did not have ihe opportunity to discuss the DPM project with Federal Government representatives (UMTA) and necessarily relied on the outside consultants concerning representations and attitudes. � It was, therefore, necessary to establish certain basic assumptions as to how the project would be jointly conducted. Included in the report is a "Summary of Project Conditions" , which states basic assumptions on capital and operating matters which the � Commiztee understands to be part of the DPM project. � � � i � � TABLE OF CONTENTS � � I. Letter of Transmittal . . . . . . . .. . .. .. . . .. . . .. .. . . .. . . . . . i � . .. . . . . . . . . . . . . . . . . .. . . . . . . .. .. . . . .. . .. .. . . . . . . . . . 1 II. Preface � III. Summar of Conclusions Y andRecommendations . .. . . . . . . . . . . .. . . . . .. . . . . .. . . . . . .. . 2 � IV. Summary of Project Conditions . .. . . . . .. ... . . . . . . . .. . . . 5 � - ts .. . . . . . . . . . 6 V. Sub committee Repor . . . .. . . . . . . . . .. . .. . .. . � (a) Downtown Development . . . . . .. . .. . .. . ... . :. ::: : : : : : : : 6 (b) Rid er s hi p . . . . . . . .. . .. . .. . .. . . . . ... . ..:. . . 11 (c) Ca pi ta 1 Co s ts . . . . . . . . . . . . . .. . .. ... . . . . . . . .. . .. . . 14 � (1) Operating Deficit & Revenues . . . . . . . . . . . . . . . . . . . . 16 � VI. Supporting Data & Reports . . . . . .. .. . . . . . . . . .. . . . . . .. . . 19 A. Map (DPM Route) B. Map (Benefit Areas) � C. Information Sheet-DPM Program Reports : D. Summary -"The Downtown People Mover � and Economic Development in Saint Paul" � • Hammer, Siler & George E. "Incremental Downtown People Mover � Development Impact" Hammer, Siler & George F. "Ridership Market Analysis" Barton-Aschman & Associates G. "1990 Ridership Projections" � Barton-Aschman & Associates H. "DPM Capital Cost Estimates" Kaiser Engineers � I. "DPM Operating Cost Esti.mates" Kaiser Engineers J. "Primary Benefits Associated with the � Saint Paul Downtown People Mover" Robert Harmon & F..�sociates K. "Benefit District Assessment Approach and Structuring the DPM Program" � Robert Harmon & Associates . � � � � � �� The final part of this report is a section entitled , Conclusions � and Recommendations" , which combines the essential conclusions of the four sub-committees which now has been adopted by the total Committee for recommendation to Operation ` 85 ar.3 to the private sector. If th�se are acceptable to both the public and private � sectors , they will establish the financial feasibility of the DPM. The members of the Committee brought to this project a variety of � � opinions and reservations regarding the DPM, as would have been true of any joint public/private undertaking of this scale. One of the expressed concerns is whether the project can be accomplished � within the $90 million of estimated capital cost. This particular reservation has been dealt with in the "Summary of Project Conditions': in which the Committee makes the assumption that this capital cost estimate is a maximum and can be contained by a fixed-price contract � which accommodates cost overruns, extras and contingencies. There is also a very real philosophical concern arising from the � fact that the Federal Government initiated the idea of the DPM for Saint Paul and that most of the capital cost would come from a Federal Government grant. Virtually all members of the Committee � f eel that the solutior� to the problem of the high current l �vel of inflation in this country depends heavily upon a substantial � reduction in Federal Government spending. � The conclusions and recommendations concerning the private sector financial support of the DPM are directed essentially toward the singular long range objective of strengthening the economic base � of downtown Saint Paul , even though it is recognized that the economic benefits to Saint Paul are highly leveraged by the large Federal Government contribution. �, This communication would not be complete without the expression of my personal appreciation for the willingness and dedication of each member of the Financial Advisory Committee to this assignment. , There have been eight meetings of the full Committee and more than twenty meetings of the sub-committees during the course of their study. While members of the Committee approached the subject with � varying degrees of acceptance and skepticism, we hope that the final report represents a reasonable consensus on a highly complicated subject. � Robert S. Davis � Chairman � � � ,� � P I2 E F A C E . � ' . � 1. The employment in the City of Saint Paul from 1972 to 1977 declined from 185 , 000 to 182 , 000 while the employment in the Twin Cities suburban area increased by 39. 20 or 150 , 000 � . jobs. � 2. The assessed value (in constant dollars) within the City of Saint Paul declined by 17. 6o from 1973 to 1977 ; meanwhile, public service costs (in constant dollars) have increased � over the same period. � 3. Economic development efforts to increase private investments and reinvestments in property, facilities , and business activities within the city is imperative. Because Saint Paul � is a "built-up" city, the downtowi� area presents the best opportunity to significantly increase assessed value. � 4 . The economic development efforts must respond to the compe- titive disadvantages of the downtown and build upon its � advantages. ,� 5. In the absence of major economic expansion in downtown Saint Paul, the prospects are for continued fiscal pressures � on City government as costs outrun revenues and for continued negative pressures in the City' s private business and industrial sectors. � � � � Source: "The Downtown People Mover and the Economic Development in Saint Paul ," Hammer , Siler, George, 1978. � � -1- �, � � � . � . � S U M M A R Y � ` � �CONCLUSIONS & RECOPU�IENDATIONS � OPERATION ' 85 � FINANCIAL ADVISORY COMMITTEE to the DOWNTOWN PEOPLE D'lOVER � � � � � � � � � � � • CONCLUSIONS & RECOPM�lENDATIONS (1) I1. There are specific and identifiable development benefits which will result from a DPM; the benefits include : � o substitutes for the compactness found in higher density cities; � o expands the effective "pedestrian domain" and the number of "prestige" sites ; � � o ties to cheaper fringe parking; o links business services and activity nodes; ,� o links smaller hotels into a single unit and provides all-weather connection to Civic Center; � o improves access of many downtown employees to retail core; � o aggregates masses of people at key locations , creating new thresholds; � o openti residential sites with all-weath�r , convenient access to jobs , cultural , and social .amenities; � o provides a cumulative impact of one sector upon another, not attained without the increased accessibility. � 2. The following downtown development forecasts for 1990 totaling $374 million are reasonable and possibly conservative : � 2,450, 000 square feet of office space � ' 1 , 033 , 000 square feet of retail sales area 3 ,300 additional housing units � 1, 500 additional hotel rooms � 3. Of the 1978 to 1990 development, the DPM could directly influence the development of : 1 , 040, 000 square feet of office space , 450, 000 square feet of retail sales area 1 ,350 additional housing units 675 additional hotel rooms � � (1) See individual sub-committee re orts for details. . P � � -2- � t 4 . The ridership estimates for 1990 are acceptabie as corrected by the committee: � , - DPP�1 Daily Trips 1990 1990 � Regional Trip IUlarket Study Committee � Auto driver/auto passenger � work trips 3 ,430 3 ,430 Auto driver/auto passenger non-work trips 3 ,195 3 ,195 � Transit work trips 6 , 955 6 , 955 Transit non-work trips 18 , 910 18 , 910 TOTAL REGIONAL MARKET ' � Intra-study 11rea Trip D�arket 22 , 205 17 ,163 � TOTAL TRIP A'IARI:ET 41 ,415 3 6 , 714 � 5. The local and state contributions to capital cost are conuner.�urate with benefits received assuming a $90 million total capital cost. i 6. Saint Paul , thP Metro Area, and the State will be substantially � benefited (in terms of jobs , sales , taxes , etc. ) by the new capital cost monies introduced into the local economy. ' � 7. The private sector should be prepared to provide more than fifty percent of an operating deficit in 1983 estimated at $850, 000. � (1978 dollars) 8. It is suggested that private sector financial support be applied � in the following manner : 1) the private sector will accept the first $400, 000 of the , operating deficit; 2) the private sector ��ill s�•lit, on a 50-50 basis, between � $400, 000 and $1 ,200, 000. Under this proposal , the private sector commitment totals $800, 000 accommodating a potential deficit of $1, 200, 000. All amounts are expressed in 1978 � dollars. . � -3- � ' . � � �� i , i Ili !! !� 1 . ��,;�,� , , �,. ► �'� i'� � �� • ��J� _ ..J �� ' ��_��.,. � ! J — _��. �� ,��-� .,�. . °------, � � � `� � ' ^ � �.- _ I� a' � � -�� :` '/ � ^� \�:� �/ rI�I(I �; I I�; l,'_ —1 ��` ="_A / � \).�� O �I�I��\.! ,� � I ,, .'. ��, � � �`�, ��\�A � A i< .._ � �� I� � � �-7 n �i / }, ; �� \\ .\!`��'i��r�`C.� Q�rL�� .��i�\� __ . � � � LJ. � � � �. 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I�p�' � �� ' �-:,,��' � � � c ' � � .� � 4-� � � ' � � �)�'i :� !F J� ...;� n� .� � � �� , �� ` ��// /�� ' i� p'� � i� �+�- �� % � �! � � � v- �� ; , � Z � O �[ � �-`-� � ��(� �-1 � � � � �, �,� ' o� O 00 �� ' ,�� rl � p (`��,/ �Q�Q� ° % ��'� = I � � \ � O y� , . . \..,', �il I� � � P� � T / /�/ O � �f /''�' !�� O � L. � � Uo � 1 �O / lS � Ll_ � �.�. � Q � �//, ��\ �� o !J �_ �� W i� Q � O -� ��'' -`'`��`�� `� r � 1, >� � � �% r,�� O ,� . � o d- o � .�' � �a°�, I� 1� , l _-�� r', � � �%-,�� \�V� ��`. ��- o'� � °' ' � �� ;� ` � \'� ��'" .� �' O� ��- � � , , co * � ��.. , W � � �: ��,`�, �� ,�'�� , � � 3 `,\ ; �� Z '`�� ,�� ; �,�.�� - - �` ' ,�� i ' �'�, 1 �� a ��W � I- - �, � ��` �_ ___�-�"� w� o ^ �, �i i � `;,r f� W U '� N . � � � � � , �� .� �� C�� . O W � � N N d 0 O :� N � � !� 1 1 �'� � W� � � � V U Z (/� 'a ` U �l l � ] C (9 <p � 1 I��' ' 1 I� a w O ..l � C C v� ,C; � 1 � � Z •� � •� a 3 � � y o c �c n- � �� n v)f- ?�� C _ ! � . C O o � � � c ° ° 3 � � Ua c __�' �L , %/ , �,�� Yz� Q. � � a�i � � a'� � 3 0 `w `' > � > ��i�� '�' i��J t� '��,//'//`` �� \� 'o � p � U U � Q (n J J m J � U � (n �/�\ I l �O � . � V� r- N M V �A (D t� 0� �1 O � N M �� -_-! � I� � \\C�1 m� Q� •- � '- � . ' � i � . , � , � � � � Private Sector Public Sector Total Deficit � 400, 000 , -0- 400, 000 450, 000 50 , 000 500, 000 � 500, 000 � 100, 000 600, 000 550, 000 150, 000 700 , 000 600, 000 200, 000 800, 000 650, 000 250, 000 900, 000 � ' 700, 000 300 , 000 1, 000, 000 750 , 000 350, 000 1 ,100, 000 800, 000 400, 000 1 , 200, 000 � 9. The privat� sector financial support would be funded by special � asses�ments on benefited properties and credits for maintenance and operation of DPM stations. � l0. Special assessment caould be applied to three benefit zones des- scr�bed as follows : � A. All c�mmer_cial space in buildings located one block (400 feet) by skyway or sidewalk from a DPi� station; � B. All commercial space in buildings located one to two blocks (401 to 800 feet) by skyway from a DPM station; � C. Al1 commercial space in buildings located in blocks with skyway system access more than tc�o blocks (800 feet) from a DPM station. � (See attached map) � " 11. The relative level of assessment should vary according to land � use and location. The proposed assessment levels (1978 dollars) are: � ZONE A B C Office 10� 7 . 5� 5. 0� � Hotel 15� 11. 0� 7. 5� � Retail 10-20� 7 . 5-15� 5-lOG Assessments for retail space will be scaled according to size. Stores � of 100, 000 square feet or more will be assessed at the low end of the range for each zone. Stores of less than 1 , 001 square feet will be assessed at the high end of the range for eacti zone. Assessments for • store sizes between 1 , 000 and 100, 000 square feet will be scaled � inversely according to size. � -4- i I SUMr2ARY OF PItOJECT COPIDITIONS � ' � I'ollowing are the conditions established Uy the various Financial Advisory Committee sub-committees. Inasmuch as , none of the com- mittee had an opportunity to work clirectiy with representatives of the federal government, their conclusions are predicated on the � following conditions. These canditions are consistent with prudent business pr_actice and help describe the relationship of the local community and the federal government in the conduct of the Downtown � People Mover project: � l. Triat a separately funded fringe parking program of approximately 10 , 000 car spaces will be developed in conjunction with the DPP�. � 2. That bus intercept stations will be established to provide greater efficiency and redu��e traffic congestion and pollution. � 3. That the $90 million capital cost estimate is a m�ximum and can be contained by a fixed price contract w hic h accomrno da t e s � cost ove.rruns , extras , and contingencies. 4. That the City of Saint Paul will be given credit for non-cash � contributions which will apply to its l0o share of capital costs. � 5. That the first year operating deficit (the difference between operating costs and fares) will be paid by the f�deral govern- � ment. � � 6. That first year revenues, both public and private, can be accumulated in a reserve fund. t 7 . That a fixed price contract for operating and maintenance can be negotiated with the system supplier for at least the first five years. � 8. That the MTC/State would reimburse the City for transfers and � social fares. 9. The xoute remains as approved by the Downtown People Mover � � Steering Committee on August 21, 1978. � -5- _ , �r. � e _ ,. , . ,,- `� . � ,. ,, . � - � . . � - k :� : < � • � �f; '�a� - ! 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W � ' z � w � � �' � � � ��' �/�� , �1 _ �� `� � y � p 0 � " , Z� � � U Z t� � � �/ ] �1 � a, (n � ' v `� c c °' °' t0 , � p,1 , 1 l� 4,._ °C�in . Z � 'v a 3 3 �^ a; � c �c �- � ��. �� 1 ',/' �� W F— Q � ° �� ti � .c o o S = a� � � f . � �I /�.� � N .n � '. � �s c � � � T � U cL c � i �_ '�t 1 ��, Q� .o a � �: -.- \ � ; � �— 'a c rn � a��i } 3 � � � � c°�i � �' ---) l, �;:.�� :�r``/',`, > c� v o '"a'� U U � Q (A J J m J � U � (n �� I; � \ `�1 7 O a C� V) � NM � N (0 � � � O � r � , � �� m0Q � 1 ,� , , � � WHAT IS A DOWNTOWN PEOPL� MOV�R? � � , . A simple, automated, small vehicle transit system, . Functions as a horizonal elevator. � , Speeds up ta 30 m.p,h, with efficient elect�'.ic propulsion systems, . Passenger waiting times of 2 to 6 minutes. . Climate controlied vehicles and stations, � . Serves a variety of passengers types and needs. . Safe, reliable, proven technology, , WHAT WILL A DOWNTOWN PEOPLE MOVER DO FOR ST, PAUL? � . Complement the skyway system by linking the more d�.:cant activity centers, � i,e. State Capitol, Civic Center, Lowertown to Seventh Place. . Integrate the regional bus system by effeciently and conveniently distri- � buting people within the downtown. . Intercept many automobiles at new parking fa�ilities at the fringe of down- town. � , Encourage livir? in or near the downtown and greater use of the downtown area. . Stimulate new private investments with emphasis on commercial and housing � development. IS A PEOPLE MOVER A NEW IDEA? � presently 17 People Mover systems are operating in the U.S, and Europe, These � systems were designed for single purpose travel areas. As a result, these systems are aredominately located in recleation parks or airports. When the preliminary engineering studies are completed and if the Downtown People � Mover is approved for powntown St, Paul, the City Council and Metropolitan Transit Commission will select a system which best meets the Downtown needs. � WHO ESTABLISHED THE DOWNTOWN PEOPLE MOVER PROGRAM? � In April, I976, the Urban Mass Transportation Administration ('TMTA) announced � a project to demonstrate the benefits of automated people mover systems in urban downtown areas, Cities from throughout the country were asked to submit proposals � describing how their downtown areas could develop a downtown people mw er system, St, Paul was one of the cities selected for this program. In March, 1977 the City of St. Paul and the Metropolitan Transit Commission est- � abli.slied a work program to complete preliminary engineering of the downtown people mover, A Steering Committee was oxganized composed of city, state and regional officials. Four advisory committees were also established: � 1 � Urban Development Committee: Consists of pro�1tY owners, developers, and d�wntown organization representatives. Community Advisory Committee: St, Paul neighbor;lood and regional � representatives. Technical Task Force: Regional and 1oca1 government staff representatives. Financial Advisory Committee: Downtown business community � representatives, The studies began in October, 1977 to dete nnine guideway and station loca-' tions, benefits and costs, financial plans and system specifications. WHAT WILL TH� STa PAUL PEOPL� MOVER BE LIKE? A brief description of the St. Paul People Mover system: Length: 2,5 miles of double lane, 2 way guide- way. Stations: 13 each with 2 levels, total accessi- bility for handicapped, complete secu- rity system, and climate controlled. . Vehicles: 24 with speeds of 0 to 30 m.g,h. , and climate controlled. Hours of Operation: 6:45 a.m, to 10:00 p.m, daily and ex- tended for special events. Fares: Low cost (10 or 25G to be dete�nined) Travel Times: Capitol to 7th Place _ ' 5 minutes United hospitals to 7th Place 5 minutes Lafayette Parking to 7th Place 4 minutes Development Schedule: Final design and engineering - 1979-80 Construction 1980-1982 Public operation - late 1983 WHO WILL RIDE THE DOWNTOWN PEOPLE MOVER? Today approximately 300,000 motor vehicle trips per day are made within the St. Paul downtown area by employees, shoppers, and visitors. By 1990 thiG number is expected to increase to 550,000 per day, There are approximately 67,000 employees in the downtown area today. With additional development and expansion, this num- ' ber is expected to increase to 82,000 employees by 1990. More than a million peo- ple visited the Civic Center in 1977 and by 1990, downtown visitors are expected to number between 3 and 4 million, T1ie mile long downtown skyway system is expect- ed to double in size by 1983. Presently 30,000 to 40,000 daily pedestrian trips are made in its 10 block area. These are major factors which will influence peo- ple mover ridership. 2 HOW MANY KIDLRS? , Projected people mover ridership by 1990 is expected to be approximately 45,000 riders per day, Of this number, 55% will be general riders from the downtown � (employees, shoppers, and visitors), 27% from bus transfers and 18% from fringe parking areas, People Mover riders will move amon� activity centers in less time and greater con- � venience than walking or making auto or bus trips, The people mover will also cause new trips to these cente�s which are not being made today. � HOW WILL THE PEOPL� MOV�R AFFECT DEV�LOPMENT? A People Mover system in downtown St. Paul could expand development of shopping � areas, concentrate goods and services, specific locations, provide quick access to inexpensive and convenient fringe parking, reduce street traffic and po11u- � tion , connect major activity centers and stimulate other development lands in St, Paul. In the 12 year period between 1978 and 1990, the people mover could be a decisive � influence on a downtown development expansion program that could produce up to $366,000,000 in new private investmen� in the following facilities, � DEVELOPMENT: 1978 to 1990 . 2,450,000 sq, ft, of office space (30% incre�se over today) � , 1,030,000 sq, ft, of retail space (27% increase) . 1,350 hotel rooms (96% increase) � . 3,360 housing units (136% increase) Of this potential, the people mover could directly influence the development of: � , 1,040,000 sq, ft, of office space . 450,000 sq, ft of retail space (new or rehabilitated) . , . 975 hotel rooms (new or rehabilitated) � . 2,350 housing units With this increased 1eve1 of downtown development 14,500 new permanent jobs could � be added to the downtown with 9,600 jobs directly attributable to the people mover , Of these 7,200 would be in new development and the balance in existing facilities. � HOW MiJCH WILL IT COST TO BUILD? The current capital cost estimate to construct a DPM system is 90 million dollars. � The capital cost would be 80% UMTA cost, 10% MTC cost and 10% city cost. Because of many "in place" investments like streets and skyway bridges, it is anticipated � that the city's share will be less than �: 10% cash contribution. HOW MIJCH WILL IT COST TO OPERATE? � The current annual operating cost estimate is 2.8 million dollars, The operating ' cost is the local area responsibility . Funding operating costs will be shared � by a combination of fares, property owners, benefiting the City and the MTC. 3� � WH�RE ARE WL' WITH TH� PI20JT � CT. � Since beginning the studies last October� the Downtown People Mover committees have held 52 public meetings and 5 publi.c workshops, The meetings have been held to review all preliminary and final work completed ai.1d to make decisions � during each project phase, Majar Project Phases : � Project start through Apri.l . Downtown people mover objectives and general routes completed. � May throu�h June � , Selection of the exact location of guideways and stations. July through August � , Capital costs and operating costs prepared, 5eptember through October � . Financial plan prepared. � November throu,;h December . Environmental impact statement and decisions on next project phase � from: Downtown Community City Council Metropolitan Transit Commission Metropolitan Council � State legislature UMTA � DPM Committee and Public Workshop meetings will continue through this study " period, tiTatch for these meeting announcements in city and neighborhood news- papers, � HOW DOES THE DOWNTOWN PEOPLE MOV�R FIT IN WITH SEV�NTH PLACE? � On Monday, July 31 a poltion of 7th Street was permanently closed to auto and pedestrian tratfic, This marked the first phase of the Seventh Place Ma11 Dev- elopment, By 1980, the forner 7th Street area between Cedar and Minnesota Sts. � will contain a 55,000 sq, ft, enclosed, climate controlled retail shopping ar- cade wi_th direct access to an enclosed park, 145,000 sq, ft, of new retail shops (including the new Dona�dsons) and � refurbished Dayton's store, By 1982, the � Seventh Place Mall that will connect this development to both Rice Park and Mears Park could be completed. If the Downtown People Mover System is approved in 1979, the Seventh P1ace Ma11 � shopping arcade would Ue extended to include an additional 300,000 to 600,000 sq, ft, retail space, The Seventh Place Mall would become the main people mover . station and the center of all transportation systems downtown, The system could � significantly expand the retail and public environment oF Seventh Place. � � 4 ; �� NEED ADDITIONAL INFORMATION! i � � � Downtown People Mover Public Information Center � � Location: 310 Bremer BuildiL:g 7th & Robert St, Paul, Minnesota 55101 � Hours: 8:30 to S :OO p,m, , Monday thru Friday �I � Tor additional information, please visit or call (612) 224-4886 � � • � � SEE REVERSE SIDE FOR ROUTING AND STATION LOCATION MAP � � � � � � � � � . � � � � DPri OFI'ICE: 9/15/78 � 5 '� � � � � . � . � THE DOtiti'NTOtidN PEOPLE �1GVER A..�D ECONOT�IIC DL=VELOPi�1ENT IN ST. PAUL �� . � � � Prepared as part of the economic studies �or � _ thc BR1�'/Kaiser �ngineers Joint Venture in the St. Paul Doti,mtown People Diover Demonstr2tion � � August 1978 1� . � � I� AMT4 � R , S I LER , GEORGE A. SSOC IATES � l9ASt�znc�ro�'/ATL�1'vT/1/CENV�I< 1140 Connecticut Avenue, N.tiV. iti'ashington, D.C. 2003b � • � . � � � ' � � I �� I � '� � f :�I 'i,��i ', . 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I ' , . � � � �� ° � � - � FOREti90RD � ' w of the otential role of the proposed This is a brief overvie p downtown people mover as an economic development tool in St. Paul. It � summarizes some of the economic consultant's findings that have been used as inputs into the DPbi planning process. It attempts to de�cribe how the introc'-�ction of a fixed-guideway circulation system might impact the � workings of a do�,mtoian economy. It also explores the potential importance of economic grov�th in the central area to the viability and stability of the economy of the City of St. Paul as a whole. ' � This document includes three parts. One is tne main paper covering the .range of topics mentioned above. The other two are background ap- pendices, one discussing trends in the St. F• ul and Twin Cities r.egional . �_ economies and the other surnmarizing the forecasts of do�+mtown development . potentials within the framework of market, real estate and other considerations. � As art of the BR�9/Kaiser Engineers consulting team, Hammer, Siler, P George Associates has the responsibility for evaluating the DPD1-sti:nulated � economic development potentials and for preparing a final financial plan far the project at the conclusion of the broad study process. The jc�int team of Robert J. Harmon and As_�ociates and 3ames B. NicComb and Associ- � ates is responsible for determining specific cos�-benefit and val.ue cap- ture techr.iques for financing the proposed system's capital an3 operating costs. The present paper does not deal Hith any aspects of system £inancing, per se. The focus is entirely on the DPM as it relates to the � workir►gs and prosp°cts of the local economic structure. � � . � . Hammer, Siler, Geor�e Associates � � August 1973 � N A M M E II.S 1 L E R.6 E 0 R B E A i a 0 C 1 II T E a � � � � � � � . � � ` SUhIMARY -- d � A. A major perhaps the ma�or -- part of the rationale for the propose � downtoi,m people mover (DPh1) in St. Paul is its potential role as an economic development tool. � 1. The 2.6-mile fixed-guide�aay system can expand access to retail • markets, aggregate patronage at specific locations, give quick � access to cheap and convenient parking, reduce street traffic and pollution, connect major activity centers, and provide the avail- ability of s'..�ategic private redeve�opment sites. � 2. In the 13-year period between 1977 and 1990, the people mover can � be a d�..;isive factor in an economic expansion program in c�ownto�,m � - St. Paul that can produce up to �366,000,000 in new private - investment in the following facilities: By 1983: � 1,100,000 sq. ft. of office space 500,000 sq. ft. of retail space 450 hotel rooms � 1,560 housing units Bet��een 1983 and 1990, another: 1,350,000 sq. ft. of office space � 530,000 sq. ft. of retail space 900 hotel rooms 1,800 housing units � B. Taking advantage of the development potentials of the downtown section of St. Paul offers the city's best opportunity to stabilize its � economy and strengthen its tax base. - 1.. Bet�aeen 1970 and 1977, employment within the City of St. Paul declined by 4,800 ��orkers in face of a gain of nearly 164 ,000 � employees in the rest of the Twin Cities economy. . � • � i i ;� N A M M E R.s 1 l E 11.0 E 0 II 8 E A t t 0 C 1 A T E i � � � � t 2, The central arca of St. Paul, in wllich the economy has more than held its own during the period of economic decline elsewhere in � the city, has the potential of adding a net of approximately 14,500 new jobs between 1977 and 1990 (with the people mover . providing a major stimulus and support to this growth) . � ma'or economic ex ansion in Downtown St. Paul, 3. In the absence of � P the prospects are for continued fiscal pressures on the city gov- � ernment as costs outrun revenues and for continued negative pressures on the city's private business and industrial sectors. � C. The potential development impacts of the St. Paul DPM have been esti- mated on the basis af detailed and objective evaluations of all rele- vant factors -- markets, competi*ion, site availability, existing conditions -- that affect invest�rient prospects for the major land ` uses. 1. Over and above funding for building the DPT1 system itself, match- � ing federal funds are available for creating development projects at or near DPb1 stations. � 2. To realize the dotiti�nto�an development potentials that the DPM can _ help generate and support, however, tliere must be a concerted public-private effort to ass:ire the creation of competitive con- � ditions favorable to the attraction of new private reinvestmeats. � . � � � � c � � � � . � ` iii M A M M E 11.t 1 L E P.6 f 0 R 8 E A 8 8 0 C t A T E S � � . . - DPM ST�ERING COMMITTEE MEETi �, y September 13, 1978 � ATTACHNIMENT B ' � � . . . � August 15, 2978 MET�ORANDUM � -�/ � . Pa � TO St ul DPM Study Team FROM Hammer, Siler, George Associates � SUBJECT Incremental •DPM Development Irrrpact . . . . . � r . _________________________________ . ________________________________________ � tiVe have fxom time to time transmitted to the study team forecasts of development potential in the downtown area and specific development � . "packages" at individual station locations along the proposed DPM ro� `.e. ti9e have now been asked to summarize the incremental impact of the DPTf -- � that is, the difference between what �ae would project to occur without the DPM system and that which has. been projected as the total level of � development in the downtown area with the DPDf in place. This is a difficult question to address quantitatively for there are several � vari:ables which cloud the issue. 1. There is a lot of development presently underway in � the downtown area and many other "imminent" projects. Even though the DPM is not in place, some of the � present devel�opment, and certainly much of the planned � development has been stimulated by the talk of and planning for the DPDi system. � It is not that con- . � struction would stop if a negative decision on the � . DPM were reached; but rather the planning for the DPHi is one aspect of the city's commitment to doiantown which has at�,:racted private investments � to St. Paul. � 2. Although the construction of the DPM is not likely � to affect the development program (in terms of floor � space) of the Oxford/Radisson complex and other.. • . ' � . M�MME11.t1 LE Il.O[ 0 � 0E ASt0C1ATEi � r ' � � , .. � • . projects now wndex�ray, it could affect the performance of the space in terms of occupancy levels, achievable ' rents and sales volume. 1Yhile this performance level. � could have a longer-term impact on additional invest- , ment decisions concerning neir construction, it is difficult to pinpoint differences in performance level of space that is not yet constructed. 3. There will also be differences in the perfozmance level of the existing space. Even if the total amount of new construction were the same with or without the DPT� . , . (tiahich probably will not be the case) there can be • drastic changes in the performan ce level of existing space. Tiost notably here would be the impact on '.he � redevelopment potential of older buildings in the � lowerto�,tn area and the St. Paul Hotel/St. Peter Street . complex. Such minor variations such as whether a given � retail sp- =e is a high fashion womart's shop or a second hand clothing store is important to the viability of , dowrtown St. Paul but is not predictable analytically. � ti9ith these qualifications in mind, we believe the best measure of impact with and without the DPM �aould be the difference between the base- � line forecast and the "market with DPN1" forecast we }iave previously � presented. To summarize, for the period 1977 through 1990, the differential � impact of the DPM on the market potentials will be as follows: 2,350 apartment imits 1,040,000 square feet of office space � . 450,Q00 square feet of retail space (new or rehabilitated) . 975 hotel rooms (new or rehabilitated) � We do not claim that these increments over the baseline forecast can only be brought about by the DPM. There may be other publi•� actions, policies and subsidies which could cause additional development to take place. Hoivever, assuming all other development policies, programs and resources are other►aise equal, the DPDi should induce the above level of • ' additional development in the downto►,m area. The rationale for the DPM's . -2- � N A M M E 11,i 1 l E 11.0 t O R 0 E�A I f O C 1 A i E T . • �----� � � � � impacts is contained in� our recent report "The Downtown People Mover � � and Economic Development in St� Paul" which has been transmitted to the study team. . � In that report we also projected that the total new development fore- � cast would result in an additional 14,SOO .jobs in the downtown area with the DPDS by 1990. Of this amovnt, approximately two-thirds or 9,600 jobs � would be directly attributable to the DPM impact -- 7,200 in direct employ- ment housed in the increment of new cevelopment described above and about 2,400 in praductivity changes in the existing space. This latter � figure amoimts to a difference of about five percent in offi�e occupancy and retail productivity levels in existing sp ace. The employment figures � also refer to permanPnt employment in the downtown area and do not in clude � consrruetion work associated with development projects or the DPM itself. � . � � . � . . . � . � . � � �. � � � ' ' � . • • , � -3- • � � N A M M E R. E 1 l E R.0 ! 0 II 0 E .A E 4 O C 1 A T E i � � � . . ST. PAUI, DOWNTOWN PEOPLE MOVER � . RIDERSHIP FORECASTING - PRELIMINARY WORK • � � . � � � . ' . - . . . ' - 1 1 . � BARTON - ASCHMAN ASSOC LATES, INC. � • � A ril 14 1978 P , � � � � � � . � . • � . � � . ✓ . � ' . . � . , . � TABLE OF CONTENTS � p—� � � � Suumiary of Findings 2 Intzoduction 4 � Results of Travel Su�eys 5 ' � Patronage Aspects of Existing People Mover Systems 17 St. Paul and Minneapolis QT and Dime Zone Services 36 �� Skyway Impact on Land Use and Travel 47 Downtown St: Paul: Special Events and Attractions SU - � � � � � � � � � � • � . � � • � • � � � . � Summa of Findin s � ' rY � The following is a summary of general findings as well as of findings which are relevant input to the ridership estimation process. �� 1. �avel Surveys • - The average walk trip length in do�vnt�wn St. Paul is 1,450 feet � � approximately. �e median trip length is 1,000 feet for sidewalk trips, and ' 1,400 feet for skyway trips. The longer median skyway trip supports the assumption used in the models that time spent walking out-of�oors is �� perceived as being 40 percent more than time spent walking indoors. _ � � - The primary internal market for DPM trips are work, shop, eat and personal � business trips during the noon period. T�ese trips constitute 81 percent of all noon-hour trips. During the afternoon period, the majar trip markets are work, personal business trips, and trips to bus stops and parking lots. I 'IY�ese make up 78 percent of trips in the p.m. period. - 'I�ip generation rate in the Selby area is 1.5 trips per household per day. � Forty-six percent of the employed residents 16 years or older work ir. downtown St. PauL - 'I�ip produetion rates to be used in the intt;nal trip models were obtained � from fhe pedestrian counts as follovrs: 10 trips per day for public office � space, 17 trips per day for private offices, and 52 trips per day for retail space (space is measured in I,000 ft2 of leasable area). Other rates: 4 trips � per day for residences, 9 for hotel rooms and 3 for hospital beds. . - Peak pedestrian traffic occurs between 12:15 and 1:15 p.m. during the noon � period, and betsveen 4:15 and 5:15 during the afternoon period. 2. People Mover S�stems � - Ridership figures on the systems examined vary widely. Airport systems exhibit patronage leveLs that are between 17,000 and 40,000 riders per day; � . non-airport AGT systems carry between 8,000 and 13,000 passengers per day; one system, Ta.nc�y Corporation, carries between 12,000 and 13,000 passengers daily; ridership on the Washington Metrorail system reached � • about 30,000 passengers per day during the first phase operation. . • � ' - T�e best data on induced ridership is provided by the Washington Metro �� system. Surveys conducted during Phase I indicate that 12.8 percent of the total �idership was induced. When non�iscretionary trips such as work and school are excluded, the resulting internal trips are increased by 25 percent � due to induced travel. lfiis level will be used as a basis to estimate DPM induced ridership. � ' . � �� 2 � . � , � - �he'two systems which are predominantly associated with retail business � � (Fairlane and Tandy), provide a large number•of free parking facilities and charge no fare. Adequate park-and-ride facilities are provided at a cost on • all other systems. . - Exce t� for the airport systems which normally operate all day long, the � P remaining systems operate, for the most part, from 6-7 a.m. to 8-10 p.m. 3. QT and Dime Services � The two QT loops in St. Paul and Minneapolis were able to attract almost . � � twice as many passengers as the more extensive Dime Zone system. The � difference in ridership can be attributed to several advantages offered by the � • QT service: (1) its highly visible vehicle (minibus) covers a unique, short � � route; (2) it provides a higher frequency of service; and (3} the user does not have to become familiarized with several bus lines, � schedule�, routes, in addition to a not-so-visible boundary line, as is necessary when using the � Dime Zone service. 4. Skyway Impact on T snd Use and 'I�a'vel � - The skyway system has made possible the creation of a unique second Ievel � pattern of retail, commercial aiid service establishments in the downtown � are�. This has been accomplished because the skyway provides an attractive, convenient, safe and comfortable means of access ta these � establishments. The impact of the skyway system is evidenced by the number of establishments adjacent to skyways has almost doubled since � 1975. - 'IY�e skyway system has also affected travel patterns in the downtown area. �' 'I3�e median trip length on the skyway Ievel is approximately 40 percent longer than on the at�rade pedestrian system. � Little work has been done to measure the degree of induced trip-making on � skyways. Nevertheless, the well documented up�vard change in land use brought about by the second Ievel system would seem to support the belief � that the skyway has induced a significant amount of travel. 5. Special Events and Attractions � � At present, about 2.5 million visitors come to special events and attractions in downtown St. Paul (State Capitol, Civic Center, Arts and Science Center, � Winter Carnival, etc.). By 1990 � this number is expected to in.�rease to � approximately 3.5 million. Many of these events occur primarily during off- peak periods or in the early evening. Thus, a separate analysis will be � necessary to determine the potential DPM ridership captured from these • events and attractions. . � � . 1 3-' � • , � . l. . 1 � . � � DOWNTOWN ST. PAUL: SPECIAL EVENTS AND ATTRACTIONS • , � The purpose of this section is to compile attendance fi�res to major events and attractions that take place in downtown St. Paul. 1�ese figures will be used later . to estimate DPM ridership to special events and attractions. � . Downtown 5t. Paul is rnore than an employment and shopping center that provides goods, services and a trip destination for appro�:imately 100,000 to 150,000 persons � per day. b7ajor attractions, special ev��its, conventions, historic places and general participation in downtown activities attract over 2 million visitors per year: 'I�e following activity descriptions verify the intensity, frequency and scheduling of � these major dow�town attractions. MAJOR ACTIVITIES � - Conventions ` - Events at the Civic Center - �'Vinter Carnival, special celebrations, and promotions � - Arts and Science Center - State Capitol Complex - Minnesota Historical Society � A summary of the activities, schedules, attendance figures and other relevant information for each of the above activities is given next. _ � 1. St. Paul Civic Center Among the many activities that are held at the Civic Center, conventions and high school sport tournaments are most important in bringing people into downtown for � any considerable period of time. Additionally, these visitors use many of the . - downtown facilities such as hotels, restnurants, shops and entertainment establish- ments. Attendance at the Civic Center has fluctuated from a high of 2 million � visitors in 1974 to a low of 1.7 million people in 1977. 'Il�e decrease in 1977 might have been due in part to the folding of the St. Paul Fighting Saints franchise. 2. Conventions ' ' �. The number of persons attending conventi��ns which are held at hotels is reported to have been about 27,000 in 1974 and 37,000 in 1977. These are conventions held at � the Holiday Tsu�, the Hotel St. Paul and the Rndisson Hotel. Other conventions are held at the Civic Center and their numbers have already • been included above. The specific figures for convention visitors range from 71,000 � in 1973 to 130,000 in 1974 and 120,000 in I977. ' S0 , .. V .• . � � 3. Arts and Science Center � Special attractions, meetings, exhibits and general visitation bring in a total of over 500,000 persons per yeai�. jti'ee}<days attendru�ce ranges from 300 to 800 visitors per day. Weekend attendance ranges between 3,000 and 4,000 per.day. ' � With the opening of the Space Tneater and expanded exhibit hall space at the Arts - and Science Complex, attendance is expected to more tlian double by late 1978. - 4. State Ca�itol Buildin � � Appro�:imately 8�,000 persons formally register for tours at the Capitol, but total visitors is estimated to exceed 150,000 per year. School age children are special � visitors to the Capitol. `IYiey arrive in buses at a rate of 1,500 to 1,800 Qer month. • In addition to visitors to the Capitol, an undetermined number of people visit other � buildings in the area including the Department of 'I��nsportation, the Veterans Administration Building, State Ofiice Building and Centennial Building. . 5. Minnesota Historical Society � In 1977, approximately 22,OOQ people visited the Society's Reference Library, 50,000 visited the Gift Shop, 13,000 participAted in the Museum lesson program, � and an additional 1,Q.'J persons participr�ted in Adult Frograms. The programs total 75-000 participant/visitors per year. 6. The jvinter Carnival � The Winter Carnival is held duri.ng the last week in January and the first week in Februar�l. 'Ihe �veekday events are generally held at night. However, most events take place during the weekends, and these are held durir,g the day. � It is estimated that downtown events attract approxirnately 200,000 persons. The 1977 S'Yinter Carnival in downtown had three basic centers: The Hotel St. Paul, the Civic Center and Mears Park. � Other activity centers ��hich generate or will generate visitors, but have not been included in the above activities include: � - City Hall - Other S�ecial events: � � St. Patricks Day Retail-Promotion Day Arts and Crafts Fairs - Rice and Meai�s Parks � � - Land-mark Center (scheduled to open June, 1978) - Seventh Place Mall and Galleria (scheduled for completion in 1981) - �panded Civic Center (scheduled completion, 1982) � Table 1 summarizes the attendance to special events and attractions in downtown St. P�.ul from 1974 to 1977. 'I7�ere has been a general decline in overall attendance in the last four years. The folding of the St. Paul Fighting Saints franchise t�nd the � culmination of bicentennial activities in 1976 have been advanced as reasons for the decline. � � ' 51 � � ' . • ', . • � • . � � TABLE 1 ATTENDANCE TO -SPECIAL EVENTS AND ATTRAC`I'IQNS (1000's) Year � Activity 1974 1975 1976 1977 � � Civic Center 2,074 1,660 1,718 I,453 Conventions�l� � 27 31 3� 3? � Arts bc Science Ctr.�Z} 5�3 556 493 603 SYate Capitol ' _ 153 152 152 148 � - M?nn. �iistorical Society 60 64 51 75 � Winter Carnival � 164 . 181 188 2�7 � Totals 2,981 2,644 2,632 2,523 j �1�Does not include conventions held at the Civic Center. �2}Attendance is expected to double by .late 1978, with the ea�panded � operation. � � ' � � • � � � � � 52 � ._ � � � � BARTON-ASCMMAN ASSOCiATES,INC. Ten Cectar Sc�,are West�c,�ciar-�i�ae. ,610 Scuth Si�h Sfreet. Pf,�r�.apol�s.M;nr�sota�54 f6 i�332-0421 � ME1�iORAN�UP,: TO: i�ict;ar� �Nalsfeld Dick Sclznarr Fi?Oi�i: Barton-�isch.-�an Associa�es � DATE: Novembzr 27, 1378 . � SLBd�CT: at. Paul Davu�ntown Peoole 1�over: Ride^shi� Estimates (�Iternati-:•e 10), 19°0 irlr�rfcet �evelopmez� Level � 'This m�moeandum presents the estimate of DPb1 riders;up zor the i590 � inte^med�ate or m�rke� dev�looment level, and the DPM alignment shown in Figure 1. T;iis a�i�nment diffe^s fro�n the ali�nment used in Alternatives 4 througn 9 in �he foila:ving ma; �r ^ra;�s: ii) the s�ction ' �tween Seventh P?ac8 East and I-94 � stat:o:is no lon�er swin� ove^ to Vdaba:ha; thus, the r'�rts and Science Center st�tica :: :.ew �ocs�ed two blocls further esst froin t!�e Arts and Scienc� Center; , and �2) Hz am Sc;�re Station t:8.s been remaved from �'�� system. A sttrnm�.ry of major ::ac�ngs is D ven next, and a listing ai t��e major input � par�meters is provided in thP apperidix to t�i s memorari dum. Ridershit� Esti;r:atQS � A.s shawn in ':able 1, tr� DPb1 :idership estimate� for this alternati•re is 41,415. passengers, down L��m 44,5?t� es:imated fcr Alternative 4. � T A BLE :. � SL"JiP�iARY OF L�:V1 RIDERSHIP ES':'I:�'IATE � � Daily roiume (ave�sge annuxi) �1,415�' . Peak hour volurnes: � Yoon peak � 4,465 � � P.N. pealc 3,665 • . Passenger volume at maximum load link: (one-way, hourly volume) � . Noon peak, N-S le; 980 �Toon pea}c, E-�y �eg 6il5 � P.M. peak, N-S lea S90 .. P.M. peak, E- W leg � 345 �'Iti•a.risfErs 5etweea Save��:: P�ac� East and Saventh Place �Yest are not � ��ciuded ir, t�is tctal. � � . � � Compared to Alternative 4, there has been a decrease of 3,555 trips. This reduction is the net resul.t of simultpneously incrensing the DPM fare, the value of � time parameter, and the residential and retail trip generation rates. The removtzl of a station and the change of the N-S alignment also h� contributed to the decrease in ridership. � The maximum one-way volume (98� trips) occuis during the noon peak hour, on the N-S leg, between Seventh Place East and Lowertown North Stations. On the E-W leg the maximum volume occurs also during the noon peak, between Seventh Place � � West and Rice Park Statio�is. Station and Lin:c Loadin� � As vaith previous at�ernatives, station lo�din�s �.nd link volumes are higher on most stations and segrnents during the noan peak hour than they are during the p.m. peak � hour (See Table 2). 'n compari�on to Alternative 4, most stations show a decrease in loadings reflecting the lower patronage estimated for this altern�tive. It is difficult to assess the � effect of relocating the �,rts and Science Center Stati��n further from the Center be�ause of the many ch�.riges involved. Hov�ever, the net effect has been a reduction of 17 percent i�n total d��ily :oadings at *.hat station. In regard t�� the ' effeet that t:�e exclusion of Ht�n�rn �uare statiarY has had on DPM ridership, a m��sure may b� obtained by ��;;re�ating its loading in Alternativ� 4 to that of the adjacent ��tie:�, �e��n.th P?a�e T-Vest an.d ��', e T'�.r�, and tlzen �rrzg�ring thp result to the losdings on Sev�nth Pl.ace West and Rice Park statians once Hamm Square � Station hh�.s been � �moveci. .By this procedare, the exclusion of th� Hamm Squ�re station (together with thP various other cr�r�n�es mentioned earlier) csuses a net reduction in loaciings af 23 percent. It �hould be pointed out that in A.lternative 4, , the loadin� at Hamm�s Plaza Station was 26 perce�tt of the agbregate loadings of the three stations. ' While most stations exhibit a reduction in laadings, Locvertown south shows a large � inc�ease. The mast likely explan�tion far this result is that an etpansion of the skyway system, radially from the station, grovides a hi�h degree of accessibility to about 14,000 employees Iocated in bloeks adjac�nt to the station. � DPM Ridership and Totfil. 'I�AVel Table 3 shows the proportion of trigs cagtured by the DPM out of the available � market. It should ae observed that increases in the trip generation rates for retail areas and for residentie.l units within the study area ha.ve caused an increase in the � size of the intra-study area trip mt�rket, and thus, in the total m�rket. The increase in retail trip rate of 13.3 percent was judged necessary to accomodate the expeeted incre3se in retail sales capture. At the same time, no additional increase in retail area was anticipated. The trip rate for households was increased from 4 to � 6.5 to reflect anticipated changes in travel patterns. At present, housing for the elderly constitutes a large praportion of households in the study area which explains the low rate originally used. In the future, with the increase in the number of � younger worfcing adults in the study area, the trip rate is expected to be closer to the normal areawide rates. � 3 � � • . • . _ __ ' � � • � �� , �' � �1I . ��_`I �2 � ' . . '// j I I j; � . �� II, �� u ' , �, ,,�� .. �, . �� ►�� o , J � ,,: __ -� � �\ �\� / ,,',; J�'' ,, �, —. `/\�\' �� O� � 1��! � :� �I � �i�u��' �"� �—'! `,��' 'i ' • , G� \ ��-,, �/ /) � � � � ', ✓0�\�\��;J�'=��n; o //',�\��i_--�. , � % , -.��!- �- ��Ql�i�� ;" �_ � � (� • ��,�%",d/ :.`'i'�'�� i *-� -- r �� ;,'% i� c I�� i ' � ' � �;i;o '� � � '��°��!�� `�, J� �I� � , I j '�i�i� � '�? h!( ,�� ! � ! � O F ; I�, � � �, �ai�p ��- " �-:,. � � � �Q �� , � �� 1 j ' II'��i �I � � %%=�!�°� � � �J�-_ __-- --_ � h� � �� , � U, � _� ° � �' I'`-��I �:`�'�_o�'!�;��r�- �� •,?' a �7 � �- � a, /�� - ; o o—� '�'�i °,J � oln�— ,-�Q� �-�;�� I � � ��4o i I�^ � f' !3 I 'j �j!�'j °��'r�� o c��,,�-i1��1,tj� i I�. •p0 0 ��...�� _, � - ^ ` � \� /"V � lO�I T_�I I�� —��t 0��?�� . li - `-0� - � �j\ ��\ ' o ' � -�'"�°�� n c-�,�.��,� -, �=;�,- ,1�! a ' r , � � 1 � ! _.' ❑ i.,,� � c�:��' ;�� i�' ! � ��!��t�a�� //' �, •� % � r� �J �� ,11,� L� _ , � - �' /: � ( �r �f � �1��-��_�� J'�� '� �i;o� � �. ��.� �r� _-- _--- -- �L o��:�,�'`� �;� ,. � �l , ... r-� ,,•; - � , ,;;�i..�°'-°�,� --�„ � —r � � i -i �; �-� / ., . ,4, I il L.j ,� �-a� [,�-�.��,� �1}+��{�—,� '>--, ��✓, � ?��Jf\)`� � �'` �� ?` �I��I.—��I�u-�-�' n�;�� LI ��_� ��r �` ,� ' � tic�� 3"� / � + � 'J A � % //\�� . ��/, �'I�' �� !j _ �J��/� � 3 ` . /r V % =` ' ,'- G�. %, \�) �'��,'!i "_j.,j�`-�� f // �d �,� ��-. �/� � i;'j � �' \.'" �.� � � �, , . � ��., 1��I, ,,�� , f . �-°'� � � ..,: . � _ � . , ;��,--` cG f � `C��` '� � � ' � '� .. !�/ �S � � �Y i ��/^�� \�`�n � j � ��/� � �' �^ � ) �. 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I Q�S C� � ' ,' . � � � � • . � � � Nd� C000 COC� 00 eMNet� 11') CO 00 CO CV C- 'V� 00 tD 00 O '� C � M M '-1 M e-i CO L� tfi N O O � a O Q� N M er CD M c- .-� ta Q> O� � � � rl e-1 �--1 rl tr � � O ►�i 1' '� GV � � NOOOOOOOOCG 00 �Mt,pCV er O � tf� OO t:� OO � CV M � CO CD O CD O � ,N '(� M O'� �7 L� '-i tf� � 00 tf) N Q) tf> O � p Q> MMGV � tD � tGrl Cae!' � Q� a � � CD � M � C� COu'� r. � 000 tr 4'S "� � 00 00 Ch '-�i CO GV CO 00 t17 '� r�/ � O � ,� � 00 O rl N N rl 00 r-�1 M CO CO � x ", '.� � .-� ,-a ,�-i ,� ,-i . � � c3 � z °' "' ° � bc° cc r-, co co co .-� �n �-, c- o� c- ca o A � ^" 00 M .-1 lf� � d� M tD 00 Lf'� 00 M rl � .... • ' O C3 Gf 00 M M �-1 N er e-� t� ri M rN M CD ,a a" v� � r, ,� � a x z a � � cD eM CO 00 00 CO N c;� � CD CO M . ,� � � �' O �- r-I M lf> L�- 00 eM CV CD ri at � � � � Od� CDL� Qiir �T ' L� r-IGV � z `o �;, a � ,�r;,-�r;.-�.-a �-i�-i � O w • Ey ,Y � y � � 0 � CDONeNO00Ct� CO CDCDCG M . . � �' � � ;� O '� O M O L�- .� tf� er N 00 .� +"'� 0 O If� M M �-1 L� M ti7 L`� t17 tf� N Q Zi � a e-� N ri � � rTr • � x . �i � a o • � • �-+ rINMd� t1� lDL�• Op � Or-� NM � 00000000 O rir�ir-l .-i a � r�l rl � rl r/ r�i � e-� rl r�-1 rl ri �-i A � � z � C� y � • � � s a� O W +-� ...� ,� � � � � � � � � � o .� a� � � � f.. v� a � � m �, W .� vip'' 3 3 �, � � c .Ya a+ � ,� c ,� o o � � a� � Cj c`c ,c � � � '.W.7 Z o a � a�i '� c `' c' .v �, '"a a�i C�, c � � � �n riac �' .�; > 3 3 ow '� = > � > ' Fz v, z c� v �, � v� aa° a`aa w avi� v, � 4 ' ' � � . � TABLE 3 DPM RIDERSHIP--PARTICIPATION IN REGIONAL � AND INTEP�NAL TRIP MARKETS Daily Tri�, Daily Percent � . Market DPM Trips DPM of . Market R.e�ional TriQ Market � Auto driver/passenger work 58,770 3,430 5.8 � � Auto driver/passenger non-work 143,635 3,195 2.2 Transit passenger work 39,605 6,955 17.6 � Transit psssenger non-work 40,645 5,330 13.? TOTAL REGIONAL MARKET 282,450 18,910 6.7 � Intra-Study Area Trip Market 344,05� 22,505 6.5 � TOTAL TRIP MARKET . 626,505 41,41$ 6.6 � Despite the increase in the size of the internal trip market, the number of internal � tri� shows a decrease af 200 trips when compared to Alternative 4. As a result, the capture rate of internal `�rips by the DPM is reduced from 9.1 to 6.5 percent. Transfers from reb onal transit to DPM show a slight increase in absolute terms, � brought about perhaps by the addition to the network of two private bus lines. The composition of DPM trips, shown in Table 4, exhibits little change when � compared to :ilternative 4. The breakdown between trips from the regional and internal trip markets is still approximately 46 percent and 54 percent respectively. Of the regional market, 16 percent originates from auto trips and under 30 percent � from regional transit. . � � . � 5 � � � � � TABLE 4 COMPOSITION OF DPM TRIPS � Daily Percent . DPM Trips � Re 'onal 'I�ip Marfcet • . � Auto driver/passenger work trips 3,430 8•3 Auto driver/passenger non-work trips 3,195 7•7 � `I�ansit passenger work trips 6,955 16.8 T•a.nsit gassenger non-work trips 5,33Q 12.9 � TGTAL REGIONAL MARKET 18,910 45.7 � Intra-Study Area Trip Ma.rket 22,5("_ 54.3 TOTAL TRIP MAR.KET 41,415 100.0 � � Modal Spizt As indicated previously, despite the increase in the internal and total trip markets, the percent captured by D PNI has decreased. This is attributable largely to the � large increase in fare (80 percent) over the fare used in Alternative 4. Table 5 shows that the pro�c�rtion of walk trips has increased by almost 3 percent � to the detriment of all other modes including the DPM. This is an indication that many of the new trips are in fact short trips. � TABLE 5 PERCENT MOrF SPLIT �iY TRIP iVIARKET Auto Transit Walk DPM � Driver/ Pass. . Pass. � Regional Trip Market * 1.7 91.6 6.7 � Internal Trip Market 5.4 0.6 87.5 6.5 TOTAL MARKET 3.0 1.1 89.3 6.6 � 6 � , � � Components of Total DPM ;i.idership The components of DPM ridership are primary trips (from models), induced triQs � and irips to special events. Table 6 shows the breakdown of total ridershiQ into these constituents for Alt. 10. � TABLE 6 � COMPONENTS OF TOTAL DPM RIDERSHIP Number Percent ' of Trips � Primary trips 35,145 84.9 � � Induced trips 4,475 10.8 � � �ips to special events 1,800 4.3 TOTAL DPM TRIPS 41,420 100.0 � f �tation and Link Loadings � Figures 2 and 3 show detailed "on" and "off" station Ioadings as well as directional , link volumes for the noon and p.m. peak movements. Noon peak values are � symmetrical because directional volumes have been assumed at 50/50 split. � � . � r � 7 � � ST. PAUL llPM 9/20/78 CAPI'I'AL C�S'f I�:�TIMATE �;�,��„�,1 C�`�°1;j4.��dL�2:� � • y MOUlFILD-�� • . Conventional � Design and 1 �Construction Systems :- Cantracta Supplier FACILZTIES CONSTRUCTION COSTS Site Modificationa � • _Demolition........... ................ ............ ..... $ 581,000 - Relocation, Modification, an� I"aintenance of Existing Utilities.....:............................... 82'v,000 � —Street rfodifications and Restoration...................... 571�000 Guideway .... —Cuideway Foundations and Columns•••••••••-•-•••••••••••••• 3,126,000 � ---Subways...... ............................................. 4,100,000 . Passenger Stations................•..•.•..•.�•........••.... 9,438,000 ' ,� Station Extensions...•.••••••••••••••••••••••••••••••••••••• 1,215,000 � Fare Collection System:::::::::::::::::::::::::::::::::::::: 240,000 • Route Landscaping.. 260,000 Provision of Art £or Passenger Stations � (1/2X of Station Construction Cost) ........................ 52,000 � SYSTE2�.S COSTS , . Guideway --G.�ideway Girders S At-Grade Guidewaq......................................$ 5,223,000 � --Guideway Heating................................................... . .... 2,101,000 Guidance.................................................................... 1,573,00 � Vehicles............................ .................................. ...... 8x5Ro�000 . - Mainter.ance and Storage Facilities.. 3,3 Q,0 Propulsion Power Supply...... ....... ........................... 4,859,000 Vehicle Centrol System.......................... ............. ....... ........ 3,1 6,0 ..�._............. 1,0 5 � Voice and Video Systems...................:e:::::...::::::::..•••.•,...,..., 64 00 • 55 0 -- Systems Testing... ........................ ... 0�� - Subtotals $20,407,000 $30,053,000 � - ENGINEERIt�G A23D MANAGEMENT � ' Soils Explorations, Reports and Consultations............... 155,000 � Facilities Engineering and Construction • • Manage�ent: (I27. of Conv. Contracts Subtotal- Engineering: 57, Constr. Mgmt: 7%) .. ...................... 2,449,000 . . � Systems Engineerin;.and'Installation•Services:•..•••••••.'•••.•..•.'•.•..••• (87 of System Suppliers Subtotal-minus System Testing) 2,040,000 Systems T:anagement and Fee (12x of System Suppliers � Subtotal minus System Testing) ......... ..................:.:................ 3,606,0�0 Agency Administrarion and Legal (2z of Sqstem Suppliers and Conv, Contracts Subtotals) ........ ......... . 408,000 601,000 � Subtotals $23,419,000 $36,664,000 CONTINGENCY 2,342,000 3,606,000 Subtotals (July 1478 Dollars) $25,761,000 $40,330,000 � ESCALATION _ (1978/1983) (6,781,000) (13,400,000_) Subtotals $32,542,000 $53,730,000 � TOTAL CONV. CONTRACT AND SYSTEMS SUPPLIER COS2: ' . ' $86,272,000 RIGfiT-OF-WAY (Including Relocaiion Allowar.ca, Legal Fees, Contingencies, and cscalation) � 3,52R,000 � TOTAL BASELINE COST $89,800,000 , ' , . • � 11/30/78 299U A11I:i1AL UI'rRATIT�G COST Sil?;�thRY. — n97� P�T.TARS . � SXSTI:I�1 CIit1Rl1CT�RISTICS FLE�T SIZE 22 � ' AI�INUAL VEI�ICI.� MILES 833,300 . STATIONS 13 ' � PASS�tvGERS (11�tiP1UAL) 12,G24,500 . COS T ELEI•L�'t�TS � T1AI30R (IIICLUDING OVERHFI�D) ML�AGEr;T�NT $ 24I,000 � OPEItATIONS 414,000 � MAINTENAI:tCE 832,000 � SUBTOTAL $1,487 ,QOU Ei3ERGY � WI2dTER . 377.,00� SU`��SER � . 161 s 000 SUBTOTAL $ 538 ,000 � i�iATI:P.IALS & SPA12� PARTS � VEI�ICLE 75,000 WAY & PO��ER • 78,�00 � STATZ02iS � 13,000 SPARE PAF.TS 25,000 . SUBTOTAL 191 ,000 � CONTRACT SERVICES � � ESCALATORS ' 81,000 ELEVATOl:S ' 22,000 STATIO=� CI.�ANING 115,000 � MISC. VEHICL� ,ITI�iS • 13 ,OOQ SP�CIAL SNOCd RENOVAL 48,000 � SUBTOTIiL z79;000 i,IABILITY FL'IvD 1l�4 .000 � TvTAL , ' ' 2 64 000 � � $ , 4, • 0 & M TfEASLT.ES . � CosT rL�� rnss�hr,rri $ 0.213 cos� rL�� VLIIICLE riTLF $ 3.17 . � � .k.,,...._.�._..�.��___ �{ � TECI3NICAL MEMORANDUM � r T0: BRW/Kaiser Engineers/ DATE : Augus� 1 , 1978 � Joint Venture FROM: Robert J. Harmon & Associates , Inc . � SUBJECT: PRIt•ZARY BENEFITS ASSOCIAT�D WITH DOWNTOWN ST. PAUL PEOPLE MOVER r � . OVERVIEW: ! The implementation of the St. Paul DPM system would generate quantifiable (i. e. , measured in dollar terms) benefits to both p.�ivate and public sectors . It is important to define � both the primary benefit categories and their recipients in order to develop an equitable financial plan for the proposed � DPM system. � In this memo, RHA describes '-he most px'obable timing and geographic distribution of the primar-T benefits that would � be derived from the system' s construc�ion and operation. In , addition, the econc�mic significance af the individual benefit categories were analyzed to find the basic source and rates � in DPM induced change. The observations regarding the economic significance of the � primary benefits are explained utilizing demographic or fiscal variables that are representative of/or appropriate for the City of St. Paul or the Twin City metroplitan area. Tf-ie analysis in this memorandum describes only individual � types of benefits without regard to estimating their cumulative dollar value. . � When the estimates of "induced development" , ridership and overall system custs are �inalized for the recourmended system, RHA will develop an overall benefit-cost evaluatipn. � In the benefit-cost analysis •estimates will tie made of t1�e present woxth value of the accumulative "net" benefits that will be generated by the St . Paul DPM system. , � � DEFINITI�N �OF PRIMARY BENEFITS : . , The major primary benefits categories that will result from � � the St. Paul DPM system are described bel.ow: . 1. � Retai:l �Sales � Downtown rP�ail sales are derived from downtown � � employees , St. �'auI residents , hotel guests and' , visitors and the metropolitan area. The DPM will I `�._J ' � influence the frequency of do�mtown slzopping among � downtown employees and generate additional retail sales from new employees . Increased hotel and � convention �uests will add to retail sales . This activity, in turn, will support additional retail space. An increase in the amounL of xetail space � will attract additional shoppers to the downtown area. 2 . Property Taxes � Increased pxoperty taxes will be generated by the DPM induced gains in development -- office , xetail , � hotel , residential and service facilities . � 3 . � Utility Franchise Ta� � The City of St . Paul levies a 8 . 67 percent tax on the gross rev�nues of Northern State Pow�r Company. � The City w�ll receive increased tax revenue from the electricity, natural gas and steam co�zsurned by ne�• develvpment induc�d by the DPM as we17. as the electricai consumption of the system itself. � 4, � -ansient Lodging Tax . Increases in hotel occupancy and new hotel develop- � ment induced by the DPM will increase revenues to the city �rom ttze hotel-motel tax. Additional hotel � rooms will be supported by the increases in office and xetail develapment , convention and touxism. S . GP1P Multiplier � This benefit is due to the increase in economic activity through increased payroll and material pur- � chas.es made in the 1oca1 economy resulting from the incremental �ederal investment related to the DPM system. In addition to the increase in local job � opportunities , this investment w�ill increase the state income and sales tax revenues . The purchases by suppliers and workers related to the DPM system � creates a secondary wave .of economic activity that increases income and sales tax revenues . The combined. economic impact o� the initial puxchase � of labor and materials associated with thc. DPM system construction and the cumulative effect of the econamic activity is called the GNP multiplier e��ect. � � � Each o� these primary benefit categories is described in summary form in Table l , or the next two pages , in terms of recipients , � � �eo�raphic distribution, timing and economic � significance. � r . 1 , � � � �B� 1 PRI?�l�RY FE�ZT CAT"�r.C�:tII�s RF't A'n�� TO 'IHE IMPL.II°Sr,t1TATT0?� OF 1� ST. PAUL DPM � Pria�aiy Ber,efit C.�te�ory Recinient Geo?-ranhic Ilistribution ��nin� Economic Si;�ifica�ce � I. Retail Sales •St.Paul CBD retail .Pri�arily cancentrated •Increased Sales •2�.agnitude of increas�_ outlets, hotel cr�ers. wit.�iin a 2-4 minute wa1k- activity would �u1d be $200 - $300 ing dis��ce to the LCc'M cc��nce with a~mually per existin,^. stations. syste� opc�ing. CBD �loyee served 'o;, � the syst�n. .C',ains in Retail Sales wcrsld graa •Per diem e�endit�e ' , pr.oportionally of business, tcnrrist ,. the e�ansion of �d convention Cele- the C�°$ �loy�.�ent, gates k�uld i,zcrease visitor and resid- by 10-25 percent. �nt population. � •Net gains in "inducec �l�yment or visir.a- ticm woul.d represent 100 percent o� �t,a i at �:r dic� sales � pot�tial. • • Expaision of quality and scale of retail � facilities would als: increzse capt�e of - � regio:aal populatim , sales trade. • � II. Frepezty Tar. Base •City of St. Paul •Prirrrrily concaitrated •A s�*iall ��itude •TYie largest portian Oftice building awners, in ca�-escial core of of increase would of the increase wou7� � Retail CBD. occts in advance be portianal to `�ie:.' Hotel of syste�n opening. increase in office, Residential hotel, retail �d Service •Major gains wou_ld residential develop- � begin to occ� 2-5 u�t. years after system openuig, •Both exi.sting and n�„ buildings directly •"7nduced" ga.ins served by the DE'M � would continue syste:n �uld benefit . throughaut the life fran �intaining of the syst�. prestige rents (i.e. , $.50 - $1.50 per square foot). � - •�e ability to can^<�: higher rents would affect the level of new developR�t and renavation as well a� the assessed value o: individual buildir�s. � � � •- ' � ` � � . TABLE 1 (Cac-it.) � PRL*lA?�1' BII��ZT �iTFJ.�RIFS RII1'�r..T`U TO THE I2�Tt'I�2II�'�.TIQN OF THE ST. PAUL T�1PfS , �'r-�;ary E�.�efit Categorv Recipi.ent Geo,,-�raphic Bistrib:iticr.i TS.r,iinr Econanic Signific.-�-�c_ CII. Utility f�-�chise cee_ .City of St:Paul •Pr»ary resulting fYaa .�i�c�est increases •Uciliry fr�chise new devcicr.��t concen- in utility fr�- fee gauis wvuld be trated in the (�D. chise £ees would collected at 8.67 ' occ� prior to perccfit of total -Second�sy grow-th could syst� apming. amual revenues to occur within the city as Northern States Power , a resul.t of increzsed -Subsequent gains Cc7;�any fran new � . CSD �loy:,�t. utility fran��ise devel ,o�;�.�nt stim�latc-c: fees would b� pro- by the Di'.1, �d systc•. portional to the electrical cansw�tic�r '4�et" ex��sian in � develo�,ent, .;stem pc7w-er utilizatian LV. TY�sient Locgii�; � Ta�: •City or St.Paul .Pr��n�-ily conc��ated •Gains in }wtel room •Hotel room tax fzam net gzins in the ta�c would not begin revel-�� gains would wl�e of hotel ro� tmtil the system be collected at 3 business within the St. began aperations. percent of inczease � . Paul t�D. in rooei c't�rges. •Subsecn:ent gains in hotel roan taces wa:ild be prcnor- tional to the 'het" ' e.�an;ian in hotel busi�ess wl�e. �7. � ?��ltiplier •City of St.Paul •Pr;rarily distributed •The econazic iu�act �D;early 90 percent 'It,-in Cities within the Ttain Cities wcn�ld bejin c:uin� of payroll and at F�ion, State of repion. t�e fi�-ial engineer- least 70 percmt oi 2^.irmesota in.g phase of the maLerial p�chases DFB system. would be made in the � Ztvin Cities region. •Priu�y gains woiil.d accrue d�ing the •TY�e State of Mirme- constructian period. sota would receive � between 9-11 percent •Secandary ir.y�act of total �ystesn wwld cantinue up to capital costs in one year after sys- increased sales tax ' . tc�n constn�ction is and income tax ccr.nleted. revenues. r � � � � � � � � TECHNICAL MEMOIZANDUM � TO: Operational Cost Subcommittee ot DATE: November 24 , 1978 Operation '85 Transportation , � Finance Committee FROM: Robert J. Harmon & Associates, Inc. � SUBJECT: Benefit District AssPSSment Ap�.roach and the St�ucturing ' ot '�he Privat� �ecter Commitm�nt �� 7e S . Paul DP2�� Procrram. � COPI�S: Richard Wolsfeld, Director BRW/Kaiser Engineers ' Joint Venture ------------------------------------------------------------------ � BACKGROUND During the past month, the Operati�nal Cost Subcommittee has re- � viewed the technical information and methodology utilized by RHA to docum�nt 1/ thF monetary private s�_ctor benefits that wou�'� be generated by the implem�ntation of the St. Paul DPM Program. � ; Subvequently, five criteria (i .e. adequ�c�, sustainability, �quit- . ability, acc�•�tability and flexibility) were utzlized to examine various benefit assessment rate structuresn � Each benefit assessment option that was initially considered had the revenue potential to at leasr provide $750 , U00 ann�ally to � support the operational cost of the St. Paul DPM. Subsequent bene- fit assessment options were designed to produce up to $1 , 000 , 000 annually to imprave the adequacy and sustainability of the pro- � posed DPM system financial plan. PROGRAM REFINEMENTS In �he course of refining the original benefit assessment options � presented to the subcommittee on Qctober 28 , 1978 , three basic changes were made in the land use categories and zone definitions � included in the overall benefit assessment program. I'irst, hotel room facilities �ere added to the eligible land use categories . After serious considerations of: (l) a one percent increase in the � current gross recei�ts tax 2/ and (2) other types of per room charges , the subcommittee decided that a per square foot rate 1/ Reference "Benefit Assessment A roach to the St. Paul DPM" , PP prepared by RHA on October 27 , 1978 2/ The uniform hotel room tax in the Minneapolis , St. Paul Area � is now established at 7 percent of the basic room change . � �� 1 .:, � -2- � equivalent to other re�ail facilities �caould be the most appropriate and equitable basis of hot�l facility asscssment. � Secondly, all public sector office sp�ce (i .e . Fec'eral, State and City) was added to the ela.gible land use categories and assigned , comparable assessment rat�s to private sect:or office space wi�h similar physical assess to a DPM Station. The total revenue po�.ential of all. public sector space repres�:r.ts ��JJ than 10 per- cent (i,e. $70 , 000) of the tatal annual revenue potential �t thF � overall benetit assessmexit program. How�ver_ , an the basis of equitak�ility it is important that these elements of the assess- ment program be retained. � Finally, the definition of the third ti�r zor.e (i .e . those facili- ti.es located beyond .t�ro-block skyway access) was changed from all � other pr_�_vate%ca��unercial. space to only those building that no�� have or could potentiall.y be g�rovided direct sky�r�ay access to a DYM �station. This ch�nge provid�d a valid :;:�sis for futur� increases in the coveraae o� the ber_�fit assescment di�strict . In add�tion, � with a minor reduction in rev�nue potential, it increased the over-- all acce}�tability of the program,. based. on demonstrated benefits . � kecomr,tended E �nefit Assessment Rate Structure : The recommended benefit assessment r�.te structure that evolved � during the recent Operat_�.onal -Cas� .Subcorcuni�te� deliberations i� . presented in Tables 1?A and lIB. The. propos�d rate structure has several important features . The proc�ram mo�� significant attri- butes are the following: � o Stated in constant 1978 dollars, the avera e ex s uare g P q foot benefit assessment for all land use categor�ies/ , igeographic zones is approximately 10� per square foot. � o This overall average rate is between 50 to �50 percent � of the av�rag� annu�l cost now paid by tennants for the- annual maintenance and operating :cost of the elevators 3/ in their respective buildings . � o In all three tiers (i.e, benefit assessment zones) the average annual increase in rental rates per square foot would average one percent or less increase over today' s � prevailing lease rates . . o In all instances retail facilities that would realize � higher direct profit potentials, would be assessed at a rate which is 50 percen'. higher than� commercial office space. � , � 3/ The average annual operational/maintenance cost of elevators in St. Paul' s commercial buildings is 18 cents per square foot. ' TABLE 11A (Option 6) � Three Tiered Benefit Assessment ' Combined Multi.g_�e Lancl Use Approach I. Revenue Requirements 1983 5pace Al.location A. Commercial/Public �� Space Located Within Gne Block Skyway Access � 1) 2.91 million sq, ft. office space @ lOG = $ 291,000 � 2) 1,36 million sq, ft, rerail srace @ 15� h� = 204,000 3) 800 hotel rooms �� equal 360,000 sq. ft. @ 15G = 54,000 � Subtotal $ 549,000 B. Commercial/Public Space d� Located Within 'I�aa Blocic Sky��ay Access ' 1) 3.08 mi.11ion sq. ft. office space @ 7.5� _ $ 231,000 2) .86 million sq. ft, rctail space 11G = 95,000 I 3) Na hotel rooms @ 11� _ —0— _ � Subtotal . $ 326,000 C. Commerciai Spac� Located in Skyway System Beyond �ao Blocks ' of DPM Station 1) .5� million sq. ft. . office space @ SG = $ 29,000 � 2} 500 hotel rooms �� equal 225,000 sq. ft. @ 7.5� = 17,000 Subtotal $ 46,OQ0 � Total Revenue Capacity e� _ $ 921,000 � s/ I:cludes 360,000 sq. ft, of Stare owned office space. b/ Retail space includes restauzants. The rate reflects an average, Future allowance may be nade for differences in sales per square foot volume for � large versus small space tenants. c/ Estimate based on 450 sq. ft. facility space per room. � d/ Includes 411,000 sq, ft, of Federally owned office space and 210,000 sq. ft. of City owned office space. In addition, it assumes that the 250,Q00 sq. ft. of office space owned by the St. Paul Companies and the 120,000 sq. ft. of � office spacE owned by West Publishing Company are connected �y skyways. e/ All space estimates are based on a definition of net leasible space equals � 80% of gross floor area. Source: Robert J. Harmon & Associates, Inc. � � , � TA�3L,� 11B � (Option 6) � Three TiPred Benefit A4sess�ei�t - Comhined Multip�.e Land U�e Approach . ! I. Revenue Requirements 1990 Space Allocation � A. Commercial/Public Space a� Located �ti'ithin One Block 5kycaay Access � 1) 3.59 million sq, ft. o�fice �gace @ 10� _ $ 359,000 2) 1.�+9 �ni.11ian sq. f t. retail space C� 15 G b� = 224,Q00 � 3� 800 hotel rooras equal �� 360,000 sq. ft. @ 1.5� = 54,000 ' Subtotal $ 637,000 B. Commercial/Public Space d� Located Within �ao Block Access � 1) 3.08 mill.ion sq, ft. office sgace @ 7.5� - $ 231,000 2) .30 million sq. ft. retail space @ 11� = 94,000 , , 3) 400 hotel rooms equal c� 190,Q00 sq. ft. @ 11� = 20,000 � Subtotal $ 350,000 , C. Co�ercial Spac.a Located In Skyway System Beyond Two Blocks of DPM Station . � 1) .5�i million sq. ft, office space @ 5� _ $ 29,000 2) 500 hotel rooms equals �� 225,000 sq. ft. @ 7.5� = 17,000 � Subtotal $ 46,000 Total Revenue Capacity e� _ $1,033,000 � , a/ Includes 360,OQ0 sq. ft. of State owned office space. b/ Retail space includes restaurants. The rate reflects an average. Future � allowance may be made for differences in sales per square foot volume £or large versus small space tenants, c/ Estimate based on 450 sq. ft. facility space per roo� 1 d/ Includes 411,000 sq. ft. of Federally owned office space and 210,000 sq. ft. of City owned otfice sgace. In addition, iC assumes that tY:e 250,000 sq. ft. of office space owned by the St. Paul Companies and the 120,000 square feet � of office space owned by West Publishing Company are connected by skyways. e/ All space estimates are based on a definition of net leasible space equals 80% of gross floor area. , � Source: Robert J. Harmon � Associates, Inc. � -5- � o Finally, the r�te structure , st�a.ted i.n constant 1978 � dollars , represent� a ma;�imum cc�st to the private sector . The higher. system r�veriue potenti:;�l that would take pl.ace as a result of : (1) "j o�--riding" ; (2) higher � levels of CBD develo�mer�� ha� are now cc��servatively forecasted; and (3) tn� carry-ov�r of the first year Federal subsidy p�.�ym�nt represent important contingency factors which will most �robably reduce the amount of ` annual private sector. op�ratir.g cn�t support that will be required to keep the SL. Paul DPi� se±t-sustaining. Capa�ili�y_ af the Proz;osc�d Asse;Y�me�.t Pr_c��x.ram to r-leet Original � PrivZte S�cto� ��,in� .�.ia ! r-:�UC,�.��m L��a.ter�a 1�t +-_.'�e start of this ef�ort fiv� c.riteria were groposed to be , uti.lized i� tn.e fox�aulation of �h� privatE sec-tor financial pro- grani� . T!�e degree to ��rhi_ch the proposed thre� tiered/land use benefit assessm�nt prograzn meet� each of these criterion is � briefly dcacr.ibed below: Criterion (1) -- Adecruacy: � In t.he Oc`aber 27th memorandum, the riinimurn 1eve1. of adequacy for the pri�r�te s�:ctoL aperatio_^.�1 co�t �uppc.�t cemmitz^ents �vould gro- ' vide only 100 percent . coverag� (i .e . e:�actl� equal) the anticipated non-fare box revenue requirement.s af the .St. Paul DPt�i system. The subcanuni�.-�ee as a wtlole did not be:Lieve thzs was surficient to; (1) proviue c�mplete "wo.�st case" financial coverage or; (2) fuily � demanstrate the private sectar ' s com�-nitmen�: �o the St. Paul DPM Program. Based on �he recent fare sensitivity analysis 4� conducted by Bax-ton ' Aschman Associates, the S� . Paul Up� Steeririg Committee has adopted a fare policy that would set the initial 1483 fare at 25 c�nts . " under this policy, the DPM' s non-fare box revenue requirements would � be approximately $800, 000 stated in 1978 dollars . 5� Regardless of how the private sector benefit assessment of. private City of St. Paul operational cost suppart to the DPP�I system would now provide ' approximately a 2 :1 coverage of the system' s anticipated non-fare ' 4/ Reference, the Nove:nber 18th "Fare Sensitivity" memorandum and � presentations made by barton Aschman Associates 5/ This estimate assumes that th� MTC would provide between � $300 ,000 - $500 , 000 annually to compensate for DPM transfers and social fares. . � � ' � _G_ � bax .reven�.� r�quirem�nts . The proposed opera�ional cost support � pragram to�aling up to �1..� million wauJ_c� bc� allo�ated on two- thirds privat� - one-thirc3 public basis . Criterion (2) -- Su:;tainab� iity: � To be su.st:ainabi.li�y the pr_?vatc sector sup�art for the DPM system's epe� �tio,a�i cost ��urt be� (1) a.�c�ryca4�d; (�) adjustable � to compensate f.ar th� az�nu��l� cn�t. cai ini lation; and (3) P=at"4`c��d against c��r.��p;�titi.on frorr:. eYis�ing cr 1c��.g ��r.m m��nicipal revenu� needs of the City o� St. r�ul . LTna�r tne curr�z�tly ��rnr�c��;�� ben��it ass�s ament d�_stxict app,�c�ch ti:c� r:.�vezzu� base �bould bc , both aedicat°d a�d a�ju_r��=d ta ccmpen.�at.e f_or th� ani�u�l cost of in��.�.Licn. Fur-�hcrir�ore , s-±nc� a1.1 c;cdic��.t��d pri.va�.� and public fL1IICJ.:� 3rz �Y'�JI.G:Lc^:.'C�. t17Z'OU,�LI ��%]C,W_.T.^OIIG�"10 Y:F�T✓`G'Z1UE?.'-.; C`jf'P.CGr'c?�G-''� �1 t�1� 1 DP:�i sys�e�l, i�he bene��it avseassril�nt prog��ym rivenu�s art-� �s�atected from compet:.ition from the eY�stir.g or lo�g t�rm revcnue ne�ds a� the Ci�ty of St. Pa�al. 6� The cur_��nt. pr.o,ram, th�r�fo�:�, fully � meets a11 st�ndards of sus�ai.nability. Criterion (3} -- Equitar�z 1i ry: � Under the currcntiv pra�as�d r_�te s�ructLZre, �� thos� tenants and ret�il faci_li�ies �ai�hin t�o-b�.�ck direct sky-�aay aceess to a bPM . station wo�� .1 �rovide �� rcErt ci the �cr.efit ��s4ssr^.�n+� distr;ct � revenues �o support the op�rational cos� 02 the DPi�� syst�;zn. Approtimately 60 percen` o� th�se revenucs wou�.d b� pz�ovided �y thf�. primary hen�:=iciaries who are wit.hi�_� cne-block skyw�y ac�cess . ' Retait f�cilities which rec�i�Te c3bC�llt �O percent of the monetary benefits generated .by the DPM sys-�cm will provide r.ear_ly 29 per- cent of the Gssessment revenuese Based on the equitability standard of "who benetits is who �hould pay" the program, � � � cur- , rent propos�d rate structure is designed as fairly as could be :dministratably possible. � As a further test of equitability the proposed approach capture ;, less than 30 percent of the documented private sector monetary benefits . Given the private sector ` s willingness to propose � making this commitment in advance of system implementation, the program also reflects an equitable "sharing of risk " between the private and public sector. ' - -- . 6/ All incremental property tax revenues accruing to the City � of St. Paul are exempt from the benefit assessment �rogram. � 7/ See Tables 11A and 11B. � � 'r , Criteri.on (4) -- A,cceT�t�;h�1it�,T: ' The re�inem�nts made iiz th� ratc structure of the pra�as�d bene- £it a�;ses:;m�r�.� c�is-t:rict are con.;is�ent ;;�i�t:h z��ivate sector in- � ve:�tmL;i� ti-�ro-�orm:as and curr�Wzit. re�3:1. estat� rea.naq,,:�i�-.nt practi.ces . 7'�� ra+�e �l:�y�er�:itia.ls e:atabli::a:��d in 1•ela.tianshig to aeogra- phics p;_a�iz�ity �a I�Pc�i `:t��,Li�n� �nd. i-�v��c� of 1�7.iici use �.r_•� a].so car}s:�s�erit. Fin��ll�%, th�} 1rlc�ivi.dual rai.es r.o�a prcposed, do not ' repre:;c�r�.t signi.i�.cant �a, ;�rdens to builc�i.ng o�J.T'af?rS t�rLar.ts vr re- tai.l �ac:ility cperaticr.s �-eluti�re to f.hei� annual lease cos�s o;� o�aera-tinc� revenu�s . � Frarn ��?.rse okas�z-��,;ztians the curr:�ntly �ropa.�ed rate structt;.re equit�a�a�y distributcs -ihc �.�ur�.F�n in v c�c�n��;;��::t m�nner. The ' U�tlIi`tu.i�' �CCC?D'f:c::TIC° Of' 1`=�1E? �7t°C7�:i.'c.11T! Z'E..'S�S �n�l::il i:i2P_ T�i.1.V3�� SG'CtOY'. �'IC��r7CVF''�"t kiciSE'.t'1 UTl ��2e SL't��G_.uTl��tir° ° S E.'1i:7�'�5 P tiZ2 PZ`dC�.Z'8.i�1 1S �uS pa]..i�.�.k�i�� as co�ld be d�s�q:��d g�..ven t}�� r��renue gene�_ai�ion ne�ds , reqiYi�:�d t� pro��ide an aciequate and sustaina�.le rinanci�i pro- g�arn �c�r the Dr�� sys��m. Criterion (5) -- Fl�xibility � As curr�n��y progosed i�h� ben�f'�_±� ass�ssment program �rovides two im�ort�,r?� flE�i�°:�?ity fe"tu�� l:i_ch L��.ucu sx��.acializcd s�ation � are��s ar operation. proti�e coz�si.d�.rataon.� . First, th;.. recomr-��nded optian i��c.�udes �.n aver�.�e r�t�li7_ spac� ass�ssznc�n,�, tor ��xamp�.,_ I5 c�nt� i� �one one (i.e. GTl`:�i.n or�e-bloe}c �k.�rcv��.y acc�.ss) . Ir� � its rin.ul?y ad.o�ted farr:� it is ant.ic:.i_pat�-;d �-�� t�tur.e �llo.,rances may be m:.de �o ref]�ect di�f�r�ncLVs in s��7..�s pe�° square foot volumes fo.r larg� v�rsus sm�ll tenarits . Secona�y, o��ers af bui,ldings that ar� cl.irec�ly intv��ated �rith a DPr�2 station �=rould 3�� aule to o�f.set � th.eir annu-::1 assessm�nt by the equivala-�e c�st af providina th� heating, cooling and clea.n-up cos-�.s of main�a.i.izing �.he individual , stat�.on. Finally, the overall tnre� tiered rat�� structure already � reflec±s the basic statior� spec�fic/geographic access conditians tnat would exist in the St. Paul CBD in 1983 and 19y� . SUMMARY , The proposed (Option 6) benefit assessm�nt rate structure fully meets each of the five criteria. In addition, the deliberatians � and review comments taken into account to design this program involved direct garticipation of representatives of each Iand use category and benefit zone that would be included in the program� . ' Although, future refinements could be made to this recommended approach, it represents the best features of all options consid- ered by the Operational Cost Subcommittee. � The remaining question is how to structure the private sector com- mitment. The most relevant options to structuring the private sector commitment are discussed ilext. ' � � � � _g_ � . . .�"G�Y'L1C�tL�.T'l ^.�: ±�.:f_' -r'I"�_VZf."ti"` ��'C�O2 C�c.I�`t�:..t�°i<_.I.� � t?nder. th�� srop:�secf b�ne�i� asse�s^:��rit ap��:c�a.e:ri appz:axima�ely $1 . 0 mi1.i.ion cc�ul�. b,� ��nerat�Fac� �o .�:t:,;:,��;�rt i..i�� t�tu�-E aperat.i.�� cos-� af �he St . F�ul D�=�i�1_ Tl�e� privatrE� �:c ctor ��n make this c:��:a^:.irzn�.r.t � 1S1c�7�$�'1�1).`� "�rc��l:i t'i�itM: �1.� E.'T1 ,U.rF �.�'�C)i=�i?T" �?�CCci� i�?�I1c?CfC.l�r''IL Of" �Ilt; ' � -� Sy.�,C._..'11° �i.S_.`'l. �G� (�J"O'�'1GC ITi.�?:1Iri.�,T11 �'�r i�LF_'i1CP_ C�_L ��1Vc'�:C�' :�G<�t`JL COITl`° m:�tment tc, the s��te:n i.h�� wou:l.d f_acili��a,�� its l.zl�inz�-�t� � im�l�rnent:at�_c��. IT1 Ci�Si�.�..�.i7CT '.�n4-';.p QC7t?Oix.s �i.". _l�'s ca.�St.Lii°C� �alc�. tl�in C1��7 G� S�. ��L.'':�. �'JLJ",1.�_!:i ITic:�C�}.1 v�lE:. �r'.;'.L'�y �E?�'��_ d1= i:.Y:'�:11��?1' �.I7�. SC7C].c3�. fa.r� ' su.��rlcart oa bz:'c:-reen $300 , G00 - $r��JO . GOU an.zr.x,�."11�� . Optzc��. (1) ---- ^h� I�c��--FnuL-��!�,��o .��;.t.�h ' Unci��: i:h�..s ap�;.onr tlin r�r.iv�i.i��V:e�c.t�,� ��1ou_t.d ;n<:�t:I� dollar f.or c3c�:1.7_ar, $�V� � ��L� c^aI2T'iLca.�..J..y G�?1.i��'I i"r,�' Ca..�:l' Qfi- ci=. Pca.i.7�. t0 pct1T tOT:' tPE' T1'�3T: $8�.�J , CO�� c�} "�z�r�ua� lii�l1 s�J�;-c��.n �u"c>si.c��.� r.._�v.t� . Ani�aa_l.:�v s�zr.��iciy � costs above �:'00 , OG� ur� to $1, 200 , 00{��wo��ci �e 100 percent pa?ci - by ��e pr�_:Tat� ��v�o: If n�cesua�=Y, ti e z�c�.>t $��,GU , 000 in su�s�i.dy cc��:-ts ��rot�lc� b� �plii. 50-50 �;et;v::�z� �he �7°i�.ra�� s:_:,ctc>r_ �.r�ci tr � Ci_tY � Of uf:. i cilZ� . 'r�":�_:;; ci�J�T:U,":i.�li :LS :iUSCli['bcir'.�'.'_•Gs�.' 1Tl `1'c3U.li� �...G SI"?Ot�7I7 L3P_7 0��,7. � TAFLE 12 The 4/a/2 Match Ogtion �.a Structu�ing �i'he Friva�� Sectcr Coma°nitmen� � Private Sectar Public Sector T 'n otal Operati g Cast Su�port � 1• $ 4�0 , 000 $400 , 000 $800, 000 � 2 • $ 400 , 000 -0- ' $400 , 000 3 • $ 200 , 000 $200 , 000 $400 ,000 � Total -$1, 000 , �00 $600 , 000 $1,600,000 ' Estimated System Needs : $800 , 000 Financial Coverage 200$ � � ' Source : Robert J. Harmon & Associates , Inc. � � , �� , � �U.Vcr'i i:;Cl'c"`;� 1 c.._ , ,, a_ ,:,r- . I_�_.a��a�„�_.n,�_�.�._.� . 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C7?�i�'r�,tilZCi StIJS.',.Cl?J C�SL` �� b�.��:w�en �I,, 3�J , 0�� - $1� 6Gd , 00Q . �he nr�nu�Z G;:�Il�.� �l�oc4tion unci��: thi� oiation are st�r��ri.�ec in 'I`aL�_e 13 , Sha�,rn bc�.�_;��•y: TAD L� 13 � The "5/3__'�5...'..��TR�tc�h Qptior� ta �tructurin� Z'he Pri�,�at� S�ctcr CG:rIL;�it.rnez��t � Pz°ivate Public Total 0��.::ating Cost � Suppc��:`i. 1. � .�oo , 000 s:�oo ,00a $ soo ,000 � 2 . $ 500 , 000 _p_ 500 , 000 � 3 . -0- 300 , 000 300,000 Total $1, 000 , 000 $600 , 000 $1, 600 , 000 � Estimated System Needs : $800 ,000 � Financial Coverage 200,0 , , Source: Robert J. Harmon & Associates , Inc. , � � , °-].0— , ,,. :< �, ; � , -.. _ ->>--,� . �.�fr.: . �Y f.� � � �:�.1 i,T2 . ,tu�._,a . ` `�'i11.S G'�J�:?t7y7 r?:O�J.l`C�C::a��:I :AC:,�t t:'.,..:.i_° c:;��aLl:f, .._ G� �� ... ..,.'a.. 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