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Home My WebLink About6031; Carlsbad Boulevard Realignment; Carlsbad Boulevard Realignment; 2001-10-04n LJ 0 0 0 0 0 .~ I V n , I LJ n u n , I u ,'l u 7 u J 111 •·~ I ; '7 u (I u ERA. Economics Research Associates CARLSBAD BOULEVARD REALIGNMENT STUDY PHASE II: PRELIMINARY FINANCIAL ANALYSIS Submitted to: The City of Carlsbad Prepared by: Economics Research Associates URS Corporation Wallace, Roberts & Todd October 4, 2001 ERA Project No. 14158 964 5th Avenue Suite 214 San Diego, CA 92101 ERA is affiliated with Dr-ivers Jonas 619 544 1402 FAX 619.544.1404 www.erasf com/erasf Los Angeles San Francisco San Diego Chicago Dallas Washington DC London 0 0 0 G D 0 0 0 0 0 0 0 0 0 D 0 D 0 D Economics Research Associates TABLE OF CONTENTS I. Introduction .................................................................................................................................... 1 II. Development Scenarios .................................................................................................................. 2 III. Land and Fiscal Value Estimates ................................................................................................... 7 IV. Other Potential Sources for Funding Realignment Costs ............................................................. 11 Appendix ................................................................................................................................................... 15 0 D D D 0 0 0 0 0 0 0 0 0 0 0 D D 0 D ■#i:f+t Economics Research Associates LIST OF TABLES Table Page Table 1: Development Program Scenarios -Alternative 1 ........................................................................ 3 Table 2: Development Program Scenarios -Alternative 2 ............................................................................... 4 Table 3: Development Program Scenarios -Alternative 3 ............................................................................... 5 Table 4: Development Program Scenarios -Alternative 4 ............................................................................... 6 Table 5: Preliminary Revenue/Cost Comparison .............................................................................................. 8 D D 0 D 0 D D 0 0 0 D 0 0 0 0 D D 0 0 GENERAL LIMITING CONDITIONS Every reasonable effort has been made to ensure that the data contained in this study reflect the most accurate and timely information possible, and they are believed to be reliable. This study is based on estimates, assumptions and other information reviewed and evaluated by Economics Research Associates from its consultations with the client and the client's representatives and within its general knowledge of the industry. No responsibility is assumed for inaccuracies in reporting by the client, the client's agent and representatives or any other data source used in preparing or presenting this study. This report is based on information that was current as of October 2001 or as noted in the report, and Economics Research Associates has not undertaken any update of its research effort since such date. No warranty or representation is made by Economics Research Associates that any of the projected values or results contained in this study will actually be achieved. Possession of this study does not carry with it the right of publication thereof or to use the name of "Economics Research Associates" in any manner without first obtaining the prior written consent of Economics Research Associates. No abstracting, excerpting or summarization of this study may be made without first obtaining the prior written consent of Economics Research Associates. This report is not to be used in conjunction with any public or private offering of securities or other similar purpose where it may be relied upon to any degree by any person other than the client without first obtaining the prior written consent of Economics Research Associates. This study may not be used for purposes other than that for which it is prepared or for which prior written consent has first been obtained from Economics Research Associates. This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions and considerations. D D D 0 0 0 D D 0 0 0 0 0 D 0 0 0 0 0 ■l;M Economics Resear-ch Associates I. INTRODUCTION The Carlsbad Boulevard Realignment Study is an analysis of alternative scenarios for realigning Carlsbad Boulevard away from the coast bluff edge and, in the process, creating opportunities for commercial, recreation, and open space uses. One of the study's objectives is to explore ways to generate revenue from useable public land created, including potential land sale or lease opportunities, and using this revenue to help offset the cost of realigning the road. This Phase II report is a preliminary evaluation of each scenario's financial implications. The Phase I report, presented in April 1999, evaluated the market context in which development may take place. Some of the key rent and market assumptions presented in this report are based on the 1999 research, adjusted for inflation. A market analysis update has not taken place since 1999. The values presented here are preliminary estimates for planning purposes only, and should not be interpreted as valuations or appraisals since they are based on conceptual development programs, gross preliminary development cost factors, and two-year old market research. Valuations or appraisals will require greater due diligence regarding current market conditions, more specific development and site planning programs, and more detailed cost estimates. PROJECT No. 141 58 INTRODUCTION 1 D 0 0 0 0 0 D 0 0 0 D 0 0 0 0 D D 0 0 ■:j;f4 Economics Research Associates II. DEVELOPMENT SCENARIOS URS Corporation and the City of Carlsbad have identified four alternative land use scenarios for a realigned Carlsbad Boulevard. The proposed realignment creates 4-6 new surplus land areas resulting 5-7 potential parcels (see the Carlsbad Boulevard Realignment Study -Phase I and Phase II for more details regarding these alignments and surplus land areas). The consultant team prepared hypothetical development programs for each alternative. These hypothetical development programs are not recommendations; rather, they were devised to test the potential financial impact of the following alternative approaches towards reuse of the surplus land that is created with the road realignment. They were also designed to serve as a starting point for discussion of preferred uses and to allow the decision-makers to select and combine the elements from each alternative that they find most desirable. Finally, these scenarios serve as starting points for discussions with State Parks, which is critical for the pivotal Manzano parcel. • Alternative 1 tests the financial impacts of a parks and open space scheme. It assumes that no major commercial development occurs and that the surplus parcels are used for parking, community facilities, parks, open space, and camping (concessionaire), as shown in Table 1. • Alternative 2 tests the financial impacts of a predominately parks and open space scheme, with limited commercial development. It assumes that a time-share and executive meeting hotel is built on a small portion of Surplus Area 1, and that the rest of Surplus Area 1 and all of the other parcels are used for parking, community facilities, parks, or open space, as shown in Table 2. • Alternative 3, as shown in Table 3, tests the financial impacts of a significant commercial development scheme. It assumes significant commercial development on almost half of Surplus Areas 1 (specialty retail, restaurants, and office) and 3 (hotel), and all of Surplus Areas 2 (time-share), 6A (time-share), and 6B (office), as shown in Table 3. More than half of Surplus Area 1 is used as park space and more than half of Surplus Area 3 remains open space. Parcels 4 and 5 provide parking and open space. • Alternative 4 tests the financial impacts of a significant commercial development scheme for a majority of Surplus Area 1 (specialty retail, restaurants, time-share, and executive meeting hotel), with a neighborhood park on the remaining portion of Surplus Area 1, as shown in Table 4. Parcels 2, 3, and 6A remain open space, and 4, 5, and 6B contain public parking and open space. PROJECT No. 14158 DEVELOPMENT SCENARIOS 2 CJ c=i C:J CJ L.J ~ e_:J c=i c=J Table 1: DEVELOPMENT PROGRAM SCENARIOS -Alternative 1 -Parks and Open Space Surplus Area: Units 1 Acreage 20.8 Developable Commercial Campground Public parking Community facility Active parks Open space Commercial Uses Commercial-Retail Commercial-Restaurants Office Time Share Full Service Hotel Executive Meeting Hotel Campground Primitive sites RV sites Common facilities Public Parking Free Community Facility Visitor Center Restrooms Active Park Facilities Active Parks Open Space Facilities Open Space s.f s.f. s.f. Rooms Rooms Rooms Sites Sites Spaces s.f. Number acres acres - - 1.0 0.8 4.0 15.0 140 2,500 4.0 15.0 2 Source: URS; Wallace, Roberts & Todd; and Economics Research Associates 5.1 - - 0.6 0.1 - 4.4 50 1 4.4 C___J c=.J C__J c:_J C:::J C__J C__J c=J c=J C_J 3 4 5 6A 6B 10.1 13.7 2.3 0.5 2.0 ----- -2.8 --- -1.5 0.9 -0.6 -0.1 --- ----- 10.1 9.3 1.4 0.5 1.4 45 50 3,000 200 135 90 3,000 10.1 9.3 1.4 0.5 1.4 [__] ~ [__] C_:J [_J [____J [_] Table 2: DEVELOPMENT PROGRAM SCENARIOS • Alternative 2 Surplus Area:, Units 1 Acreage 20.8 0evelopable Commercial Campground Public parking Community facility Active parks Open space Commercial Uses Commercial-Retail Commercial-Restaurants Office Time Share Full Service Hotel Executive Meeting Hotel Campground Primitive sites RV sites Common facilities Public Parking Free Community Facility Visitor Center Restrooms Active Park Facilities Active Parks Op_en Space Facilities Open Space s.f s.f. s.f. Rooms Rooms Rooms Sites Sites Spaces s.f. Number acres acres 5.0 . . . - 15.8 100 150 15.8 [__J 2 Source: URS; Wallace, Roberts & Todd; and Economics Research Associates c:::J 5.1 . . 2.6 . 1.6 0.9 150 1.6 0.9 [__] CJ C_J [__] c_J C_J C-=:J [_J C_J c__J 3 4 5 6A 6B 10.1 13.7 2.3 0.5 2.0 . . . . . . . . . . 6.9 3.2 1.2 0.1 0.6 . 0.1 0.4 . . 1.6 -0.5 -1.4 1.6 10.4 0.2 0.4 - 870 520 176 10 90 19,600 3 2 1.6 0.5 1.4 1.6 10.4 0.2 0.4 CJ CJ CJ c=J CJ CJ CJ CJ C:J CJ CJ C:J CJ CJ c=i CJ c=J CJ c=i Table 3: DEVELOPMENT PROGRAM SCENARIOS -Alternative 3 Surplus Area: Units 1 2 3 4 5 6A 6B Acreage* 20.8 5.1 10.1 0.5 2.0 Developable Commercial I 10.0 5.1 4.3 0.5 2.0 Campground Public parking Community facility Active parks I 10.8 Open space 5.8 Commercial Uses Commercial-Retail s.f 40,000 Commercial-Restaurants s.f. 40,000 Office s.f. 80,000 15,000 Time Share Rooms 150 30 Full Service Hotel Rooms 300 Executive Meeting Hotel Rooms Campground Primitive sites Sites RV sites Sites Common facilities Public Parking Free Spaces Community Facility Visitor Center s.f. Restrooms Number Active Park Facilities Active Parks acres 10.8 Open Space Facilities Open Space acres 5.8 *Acreages may not equal total due to rounding Source: URS; Wallace, Roberts & Todd; and Economics Research Associates C=:J CJ CJ c=i CJ c_J CJ c::J Table 4: DEVELOPMENT PROGRAM SCENARIOS -Alternative 4 Acreage* Developable Commercial Campground Public parking Community facility Active parks Open space Commercial Uses Commercial-Retail Commercial-Restaurants Office Time Share Full Service Hotel Executive Meeting Hotel Campground Primitive sites RV sites Common facilities Public Parking_ Free Community Facility Visitor Center Restrooms Active Park Facilities Active Parks Open S_eace Facilities Open Space Surplus Area: Units 1 s.f s.f. s.f. Rooms Rooms Rooms Sites Sites Spaces s.f. Number acres acres 20.8 15.0 5.8 45,000 45,000 150 150 5.8 • Acreages may not equal total due to rounding Source: URS; Wallace, Roberts & Todd; and Economics Research Associates CJ c::=i C:::J c::J CJ C:::J C=1 c:J CJ CJ c:J 2 3 4 5 6A 68 0 D 0 0 0 D D D 0 D D D D 0 D D D D 0 ■#i;f+t Economics Research Associates Ill. LAND AND FISCAL VALUE ESTIMATES ERA estimated the approximate residual land value and the capitalized value of the estimated fiscal revenue associated with each of the alternative alignments and development scenarios. The estimates are very preliminary since they are based on hypothetical development programs without architectural designs, rent assumptions based on 1999 research (updated to 2001 values), preliminary site capacity and site planning analysis, and gross development cost estimates for buildings and site development. The detailed analyses for each alternative are presented in Appendix A. These estimates, which are not appraisals, will need to be revised as development programs become more specific, and they do not form the basis for a financial offering, bond, or prospectus without additional planning, engineering, cost estimating, and due diligence. The residual land value estimates translate into the potential revenue generated from commercial land sales, or the capitalized values of leases, of surplus land areas created by the road realignment. These estimates are preliminary approximations of what a developer might be willing to pay for the land in order to obtain a reasonable rate of return on total capital ( debt and equity capital). In order to be conservative, no real ' appreciation was assumed; in other words, rents only rise with inflation. Some developers may speculate that rents will rise faster than inflation, which would result in higher values than estimated in this report. The fiscal revenue translates into the capitalized value of the potential fiscal resources to the City and Redevelopment Agency that could help finance some of the Carlsbad Boulevard realignment costs. The total revenue from commercial land sales (or leases) and the capitalized value of fiscal revenue was compared to URS Corporation's preliminary estimate of road realignment costs ($18.8 million), and Wallace, Roberts, and Todd's preliminary estimates of possible public parking, parks, open space, and community facility costs ($8.5-12.1 million). While road realignment costs are required to produce the surplus parcels, costs to develop the open space are flexible. The estimates provided assume maximum improvements to the open space. As shown in Table 5, Alternative 1, the least commercial scenario, generates very limited revenue, only $1.1 million in commercial land value, and over $0.2 million in the capitalized value of fiscal revenue, for a total of almost $1.3 million. Other sources would have to fund over $17.5 million in road construction costs, and $9.0 million in public facility, parks, and open space costs, or the amount of improvements would have to be reduced. PROJECT No. 1415B LAND AND FISCAL VALUE ESTIMATES 7 c=J CJ CJ c::J c::J CJ c:=i c=J CJ c=J CJ c=i c=J CJ c::=J CJ CJ c::J c:=i Table 5: PRELIMINARY REVENUE/COST COMPARISON (Year 2001 Dollars) Alternatives 1 2 3 4 Revenues From Commercial Land Sales $ 1,131,000 $ 9,219,000 $ 28,155,000 $ 19,465,000 Capitalized Value of Fiscal Revenues to City & RDA $ 217,000 $ 10,849,000 $ 24,743,000 $ 16,429,000 Total Potential Revenues $ 1,348,000 $ 20,068,000 $ 52,898,000 $ 35,894,000 Less: Road Construction Costs $ 18,800,000 $ 18,800,000 $ 18,800,000 $ 18,800,000 Net Revenues <Deficit> After Road Construction Costs $ (17,452,000) $ 1,268,000 $ 34,098,000 $ 17,094,000 Less: Public Parking, Parks, Open Space, and Facilities $ 8,999,580 $ 12,062,589 $ 8,496,734 $ 9,358,925 Net Revenues <Deficit> After Public Costs $ (26,451,580) $ (10,794,589) $ 25,601,266 $ 7,735,075 Source: Economics Research Associates; URS; Wallace, Roberts & Todd □ D D □ D D D D 0 D D D 0 0 D D D D 0 ••:f+t Economics Research Associates Alternative 2 generates over $9.2 million in commercial land value, and $10.8 million in fiscal revenue, for a total of $20.1 million. This amount is enough to cover the $18.8 million in road realignment costs, but not enough to cover the estimated $12.1 million in potential public facility, parks, and open space costs. Other sources would have to fund approximately $ I 0.8 million in public facility, parks, and open space costs, or the amount or type of improvements would have to be reduced. Alternative 3, the most commercial scenario, generates an estimated $28.2 million in revenues from commercial land value, and $24. 7 million in capitalized fiscal revenue, for a total of $52.9 million. This amount is substantially more than enough to cover the $18.8 million in road realignment costs, and $8.5 million in public facility, parks, and open space costs. Alternative 4 generates an estimated $19 .5 million in commercial land value, and $16.4 million in capitalized fiscal revenue, for a total of $35.9 million, which is more than enough to cover the $18.8 million in road realignment costs, and $9.4 million in public facility, parks, and open space costs. QUALi FICA TIO NS While it appears that alternatives 3 and 4 generate enough revenue to cover development costs, the findings at this preliminary planning stage of analysis are qualified, as follows: • The cost estimates are based on gross cost factors and need to be refined as project design becomes more specific. • The cost estimates do not include any extraordinary off-site costs, such as for environmental or traffic mitigation. • Some of the parcels identified for potential development, particularly those west of the alignment, may be vulnerable to long term erosion problems; therefore, their stability needs to be verified. PRO.JECT No. 141 SB LAND AND FISCAL VALUE ESTIMATES 9 D D D D D 0 D D D D D D 0 D D D D 0 D ■1;141 Economics Reseal"ch Associates • A significant share of value and fiscal revenue in scenarios 2, 3, and 4 is attributable to hotels, which in 1999 demonstrated only average performance, especially among moderately priced hotels. Also, a new hotel has been developed since 1999. While the parcels identified for potential hotel development are competitive because of the views they offer, hotel development and financing are relatively risky. • WRT has determined that the hypothetical development programs can fit on the parcels, and URS Corporation has initially determined that the circulation system can accommodate the development. However, there could be difficult site planning issues with some of the parcels that would limit their development potential to less than what is assumed in this analysis. • The development cost estimates for the commercial development scenarios, for the most part, do not assume structured parking. If structured parking is required, development costs could be greater which would diminish residual land values unless higher rents are achievable. • Most of the value is generated on Surplus Area 1, which is owned by the State of California. The City or Redevelopment Agency would not realize the value of Surplus Area 1 unless the State trades the parcel to the City or Agency for other considerations. Therefore, the City or Agency may not be able to apply proceeds from the value of Surplus Area 1 to road realignment and public facility costs. Nevertheless, under Alternative 3, the capitalized value of the fiscal revenue alone might be sufficient to cover road construction costs and a portion of public facility costs. The capitalized value of fiscal revenue under Alternative 4 comes close to covering road construction costs, but is not sufficient to cover other public facility costs. • Competitive market conditions could change which would affect the market potential of the development programs assumed in the scenarios analyzed in this report. The estimated values are based on the hypothetical development programs for each parcel. If development programs change, the values will change. PROJECT No. 141 5 B LAND AND FISCAL VALUE ESTIMATES 10 D D D D D 0 D 0 D D D D D D D D D D D ■1#1+1 Economics Research Associates IV. OTHER POTENTIAL SOURCES FOR FUNDING REALIGNMENT COSTS The U.S. Department of Transportation (DOT) and State of California Transportation Department (CalTrans) are the traditional sources of funds for capital improvements to highways. For example, the Federal government offers approximately 70 different transportation-funding programs. The majority of these funds are made available for disbursement to regional entities such as SANDAG, while a small portion is made available directly to municipalities. FUNDS AVAILABLE DIRECTLY TO MUNICIPALITIES The CalTrans Local Assistance Program (LAP) is responsible for helping municipalities located in CalTrans District 11 identify which Federal and State funding programs for which they are eligible and guiding them through the application process. Each program is specifically tailored for a given need, and has very strict eligibility requirements. One such specialized program funds "Intelligent Transportation Systems". Funds are available to projects that integrate new technology (computer-related) with the road/highway project to improve traffic flow. Because this program is new, eligibility requirements are not yet well defined. There is no program specifically for road or highway realignment. Moreover, it is estimated that for every 10 applicants to each of the programs above, only the most urgent project is funded, leaving 90 percent of the applications unsuccessful. Given the level of competition for funds, if the City of Carlsbad finds that portions of the road may fall into one or more of the eligible categories, the application should present as compelling a case as possible. In any case, once a specific construction plan has been determined, a representative from the City of Carlsbad should meet with a representative from the Local Assistance Program to discuss the program in detail and determine whether or not portions of the project are eligible for Federal or State aid. Finally, another option is direct funding from special state legislative action. REGIONAL FUNDS The San Diego Association of Governments (SANDAG) administers the apportionment of funds from the larger, more general State and Federal transportation funding programs. The most likely source of funding for a project such as the realignment of Carlsbad Boulevard is the Regional Arterial Projects section of the Surface Transportation Projects. PROJECT No. 141 SB OTHER POTENTIAL SOURCES FOR FUNDING REALIGNMENT COSTS 11 0 D 0 ■=i.t.t Economics Research Associates For a project to receive an apportionment from SANDAG, it must be included in the Regional Transportation Improvement Plan (RTIP). The City of Carlsbad is an active participant on the CTEC committee, the body that periodically updates the RTIP. However, it is important to note that the current RTIP (2000-2004) provides only $153 million towards projects estimated to cost nearly $392 million. Also, the current RTIP specifically 0 states that "local governments will obtain private developer financing for those on-and off-site roadway and transit improvement necessary to accommodate the increased travel generated by private development." D D D □ 0 0 0 D 0 0 D D 0 0 0 The major source of Federal transportation funds administered by SANDAG is the Transportation Equity Act for the 21 st Century (TEA-21). In addition to highway and surface road construction and improvements, TEA- 21 is a source of funds for driver safety initiatives, transit programs, rail projects, and transportation research. TEA-21 was established in 1998 and funded through 2003, thus funding levels beyond that time are unknown. The Surface Transportation Program (STP) is the section of TEA-21 relevant to the realignment of Carlsbad Boulevard. One STP program, Transportation Enhancement Activities Program, funds highway enhancement activities over and above mitigation, standard landscaping and other permit requirements for a normal transportation project. Project eligibility categories under the Transportation Enhancement Program which may be applicable to the realignment of Carlsbad Boulevard are: 1) Scenic or historic highway programs; 2) Landscaping and other scenic beautification; 3) Environmental mitigation to address water pollution due to highway runoff. Currently, all TEA-21 funds, including STP, have been assigned to projects (detailed in SANDAG's 2000 Regional Transportation Improvement Plan); however, SANDAG continues to pursue additional discretionary funding available through TEA-21 on an annual basis. In 1987, San Diego voters passed Proposition A, which authorized a one-half percent sales tax increase dedicated for transportation improvements. The first $1 million in annual TransNet revenue is set aside for bicycle-related projects and the remainder is divided equally between highway, public transit and local street and road projects. Highway projects are approved for funding by SANDAG, CalTrans, the San Diego Metropolitan Transit Development Board, and the North San Diego County Transit Development Board. Local street and road projects are approved for funding by the city councils of the 18 cities and the County Board of Supervisors. The Carlsbad Boulevard Realignment project is a potential candidate project. TransNet funds have been programmed through 2004, and the measure will expire in 2008. PROJECT No. 14158 OTHER POTENTIAL SOURCES FOR FUNDING REALIGNMENT COSTS 12 0 D 0 0 D 0 0 0 0 0 0 D 0 0 0 D u 0 D ■l;t-i Economics Research Associates LOCAL SOURCES Local sources include developer financed road improvements, transportation impact fees, tax increment financing in redevelopment project areas, infrastructure financing districts, assessment districts, Community Facilities Districts, General Obligation Bonds, and the General Fund. To the extent that the realignment also increases road capacity that is required to mitigate the impacts of new development, developer financed road improvements or impact fees may apply. If the road realignment simply moves the road without enhancing capacity for future local developments, however, the nexus may not be strong enough for developer funding or impact fees to apply. Alternatively, the City may negotiate voluntary contributions to road realignment costs through development agreements on larger land development projects in the vicinity of Carlsbad Boulevard that require City discretionary approval. Since the proposed Carlsbad Boulevard Realignment project is within a newly adopted redevelopment project area, the City's Redevelopment Agency may use tax increment to finance some of the realignment costs. Tax increment financing does not result in higher tax rates; rather, the incremental gain in property tax revenues is directed toward certain improvements within a redevelopment project area. To the extent that the realignment creates parcels that are commercially developed, the realignment project will be directly responsible for the tax increment generated by those commercial developments. Because tax increment will not be generated until the parcels are developed with commercial uses, there may be a cash flow financing issue to overcome to fund the realignment costs that will occur in advance of tax increment. Another type of property tax increment financing is the Infrastructure Financing District (IFD). It also is based on the incremental gain in property taxes rather than an increase in tax rates. The City of Carlsbad was one of the first jurisdictions in California to form an IFD. Unlike tax increment in redevelopment project areas, an IFDs do not have to be located in redevelopment project areas and, therefore, do not have to address blight or meet the "predominately urbanized" test of redevelopment law. The public facility that is financed must serve the community at large. However, unlike a redevelopment project area that can be formed by Council action, an IFD must be approved by two-thirds of the voters if 12 or more registered voters reside in the district. Otherwise, two-thirds of the property owners within the district must vote to approve the district. The affected taxing agencies must also approve the district and tax increment sharing must be negotiated. PROJECT No. 14158 OTHER POTENTIAL SOURCES FOR FUNDING REALIGNMENT COSTS 13 G 0 0 C 0 0 D 0 0 0 0 D 0 0 0 D D 0 0 Economics Research Associates Properties that benefit from the realignment may be assessed for a portion of the cost through a benefit assessment district, such as the Municipal Improvement Act of 1913. The assessments may be pledged to support debt service on bonds, issued under the Improvement Bond Act of 1915. The formation process must establish the scope of improvements, identify the benefiting parcels, and determine an equitable allocation of costs. Property owners vote for or against formation of an assessment district at a public hearing. Some of the benefiting properties that are owned by the State may not be assessed. A Community Facilities District, commonly known as a Mello-Roos district, is a special tax that can be based on a formula that has a less strict benefit allocation. However, a Community Facilities District requires two- thirds voter approval of voters residing within the district. If there are fewer than twelve registered voters in the district, the qualified electors are defined as owners of land within the district, with each owner allowed one vote per acre. General Obligation Bonds, backed by the full faith and credit of the City, are the most secure and lowest cost form of debt financing. However, it would require two-thirds voter approval among Carlsbad's electorate, which may be difficult for the Carlsbad Boulevard Realignment project unless it is perceived as a project that has citywide benefits. Finally, the General Fund may be used to fund a portion of road improvements through the Capital Improvement Plan, either as direct allocations, or as annual lease payments on Certificates of Participation. Fiscal revenue from development on surplus parcels could help augment the G~neral Fund, especially if a hotel or specialty retail is developed, to enable the City to use General Fund monies for some of the road realignment and other public facility costs. CONCLUSION Both the SANDAG representative and the CalTrans Local Assistance Program representative noted that most road or highway realignments are done to facilitate development. Policymakers are aware of this and generally design funding programs in a way that encourages the private sector to pay for as much of the project costs as possible. Programs are also designed to encourage municipalities to utilize funds from their share of the gas tax, TransNet, and even the General Fund and Community Development Block Grants before turning to State and Federal funds. Finally, due to the limited funds available, all funding sources give priority to projects of a regional significance over those of local importance. PROJECT No. 14158 OTHER POTENTIAL SOURCES FOR FUNDING REALIGNMENT COSTS 14 0 0 0 n u 0 0 0 0 0 0 0 0 0 0 0 D 0 0 0 ■=lt+t Economics Research Associates APPENDIX LIST OF TABLES Table 1.A.1 Carlsbad Boulevard Realignment -Alternative 1, Land Use Scenario A; Proforma Cash Flow - Preliminary Residual Land Value Table 1.A.2 Carlsbad Boulevard Realignment -Alternative I, Land Use Scenario A; Fiscal Revenues Table 1.A.3, 4, 5 Carlsbad Boulevard Realignment -Alternative 1, Parcel 4, Land Use Scenario A; RV Operating Statement Table 2.A. l Carlsbad Boulevard Realignment -Alternative 2, Land Use Scenario A; Proforma Cash Flow - Preliminary Residual Land Value Table 2.A.2 Carlsbad Boulevard Realignment -Alternative 2, Parcel 1, Land Use Scenario A; Fiscal Revenues Table 2.A.3, 4, 5 Carlsbad Boulevard Realignment -Alternative 2, Parcel 1, Land Use Scenario A; Executive Meeting Hotel Operating Statement Table 2.A.6 Carlsbad Boulevard Realignment-'--Alternative 2, Parcel I, Land Use Scenario A; Time Share Table 3.A.1 Carlsbad Boulevard Realignment -Alternative 3, Land Use Scenario A; Proforma Cash Flow - Preliminary Residual Land Value Table 3.A.2 Carlsbad Boulevard Realignment-Alternative 3, Land Use Scenario A; Fiscal Revenues Table 3.A.3, 4 Carlsbad Boulevard Realignment -Alternative 3, Parcel 1, Land Use Scenario A; Retail/Commercial Operating Statement Table 3.A.5, 6 Carlsbad Boulevard Realignment -Alternative 3, Parcel 1, Land Use Scenario A; Office Operating Statement Table 3.A.7 Carlsbad Boulevard Realignment-Alternative 3, Parcel 2, Land Use Scenario A; Time Share Table 3.A.8, 9, 10 Carlsbad Boulevard Realignment -Alternative 3, Parcel 3, Land Use Scenario A; Full Service Hotel PROJECT No. 141 58 APPENDIX 15 0 0 Q 0 D 0 0 0 0 D 0 0 0 0 0 D 0 0 0 Economics Research Associates Table 3.A.11 Carlsbad Boulevard Realignment -Alternative 3, Parcel 6A, Land Use Scenario A; Time Share Table 3.A.12, 13 Carlsbad Boulevard Realignment -Alternative 3, Parcel 6B, Land Use Scenario A; Office Operating Statement Table 4.A. l Carlsbad Boulevard Realignment -Alternative 3, Parcel 6B, Land Use Scenario A; Proforma Cash Flow -Preliminary Residual Land Value Table 4.A.2 Carlsbad Boulevard Realignment -Alternative 4, Parcel 1, Land Use Scenario A; Fiscal Revenues Table 4.A.3, 4, 5 Carlsbad Boulevard Realignment -Alternative 4, Parcel 1, Land Use Scenario A; Executive Meeting Hotel Operating Statement Table 4.A.6, 7 Carlsbad Boulevard Realignment -Alternative 4, Parcel 1, Land Use Scenario A; Retail/Commercial Operating Statement Table 4.A.8 Carlsbad Boulevard Realignment -Alternative 4, Parcel 1, Land Use Scenario A; Time Share PROJECT No. 141 5 B APPENDIX 16 CJ [::=:J CJ ~ CJ CJ CJ, CJ c::J CJ Table I .A. I CARLSBAD BOULEY ARD REALIGNMENT -Alternative I, Land Use Scenario A PROFORMA CASH FLOW -PRELIMINARY RESIDUAL LAND VALUE (BEFORE TAXES & FINANCING) 2003 2004 Yr. 2001 fiatl Yeau Inflation Factor 3% Value I 1.06 1.09 SOURCES AND USES OF FUNDS Net Sources of Funds By Land Use RV -Concessionaire (0.79) 2005 filu:.J 1.13 (0.82) Sub-total $ $ (0.79) $ (0.82) $ Net Cash Flow After Developer Costs Is Is (0.8!1 $ (0.8)1 $ Net ~resent ~alue After Denloper Costs Net Present Value@ 14.0¾ $1.20 million, Yr. 2003 dollars Source: Economics Research Associates 2006 2007 lnl:.A filu:...5 1.16 1.19 0.37 0.38 0.37 $ 0.38 $ 0.41 $ 0.41 $ c:=:J 2008 fiaL6 1.23 0.42 0.42 $ 0.41 $ CJ CJ c=i CJ c::] C::'.) CJ CJ 02-Oct-0I 2009 20!0 2011 2012 2013 2014 2015 2016 2017 Year..1 ~ Yea.c..2 Yl:a.t..lJI Yfar:..11 Tou:..12 Y.car...l.J Yi:ar...14 Yw:..1S 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I 0.43 0.44 0.46 0.47 0.49 0.50 0.52 0.53 5.40 0.43 $ 0.44 $ 0.46 $ 0.47 $ 0.49 $ 0.50 $ 0.52 $ 0.53 $ 5.40 o.4 Is 0.41 $ o.5 Is o.5 Is o.5 Is o.51 s o.5 Is o.5 Is 5.4 I CJ C=1 CJ CJ CJ CJ c=) CJ CJ c:J CJ CJ C.=J c::::J c=i CJ 0 CJ CJ Table I.A.2 CARLSBAD BOULEVARD REALIGNMENT -Alternative I, Land Use Scenario A FISCAL REVENUES 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 fiatl fuLl Y=:..J. ~ Yeai:..5 fiar.1i fiar..1 1'.ilr..ft fiar...2 Yeatlll fur...11 Yearn l'.!:aill fuLli Yw:...15 Inflation Factor 3% I 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.601 PROPERTY TAXES Expressed In Millions of US Dollars Larul..!llis RV $ $ $ $ $ 0.03 $ 0.03 $ 0.03 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 City's Share 4.75% of Property Taxes $ $ $ $ $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 RDA 's Non-housing Share 60.00% of Property Taxes $ $ $ $ $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ 0.02 Expressed In Millions of VS Dollars TRANSIENT OCCUPANCY TAXES Full Service Hotel $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Transient Occupancy Tax @ 10.00% of Room Revenue $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Gross Fiscal Operating Income From TOT & TI s s s s s 0.02 s 0.02 s 0.02 s 0.02 $ 0.02 s 0.02 $ 0.02 s 0.02 $ 0.03 s 0.03 s O.oJ SALES TAX REVENUE Food & Beverage & 50% of Other Hotel Revenues $ $ $ $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Total Sales Tax Revenue $ $ $ $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 TOTAL FISCAL REVENUE Property Tax Revenue $ $ $ $ $ 0.02 $ 0.02 $ 0.02 $ 0.02 $ O.Q2 $ O.Q2 $ 0.02 $ 0.02 $ 0.03 $ O.o3 $ 0.03 Transient Occupancy Tax Revenue $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Sales Tax Revenue $ $ $ $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Total Fiscal Revenue $ $ $ $ 0.00 $ 0.02 $ O.QJ $ 0.03 $ O.o3 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 Sou tees D[ Eunds FISCAL REVENUE $ $ $ $ 0.00 $ 0.02 $ 0.03 $ 0.03 $ 0.03 $ O.o3 $ 0.03 $ O.o3 $ 0.03 $ O.o3 $ 0.03 $ 0.03 Reversion@ 7% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 0.47 Total Sources of Funds $ $ $ $ 0.00 $ O.Q2 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.03 $ 0.50 NET CASH FLOW Is Is Is Is o.oo Is 0.02 Is 0.03 ! $ o.o3 Is 0.03 ! $ O.oJ I$ 0.031 $ 0.03 ! S O.oJ I$ o.o3 Is 0.03 I$ o.5o I Net Present Value @ 10% $0.23 million Yr. 2003 dollars Source: Economics Research Associates c=) CJ C) c::J CJ c::J CJ CJ CJ CJ CJ CJ CJ c=J CJ CJ D CJ CJ Table l.A.3 CARLSBAD BOULEVARD REALIGNMENT-Alternali\'e I, Parcel 4, Land Use Scenario A RV Concessionaire Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value l'w:J. fiar.J. Ynu ~ fiar..5 fiau Yw:.l Yn.t..11 Yl:aL2 fiar.lJI fur..ll l'w:.1.2 Yil.t.1J Yw:..14 fiatlS Assumptions Inflation Factor 3% 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 I.SI 1.56 1.60 Real Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Numhcr of H. \' S11al·ts 50 0 0 0 50 50 50 50 50 50 50 50 50 50 50 50 Total Potential Number of nights 18,250 18,250 18,250 18,250 18,250 18,250 18,250 18,250 I 8,250 18,250 18,250 18,250 Average Annual Occupancy Rate 0.0% 0.0% 0.0% 55.0% 60.0% 65.0% 65.0% 65.0% 65.0% 65.0% 65.0% 65.0% 65.0% 65.0% 65.0% Avg. Daily RV Rate /1 $ 40 42 44 45 46 48 49 51 52 54 55 57 59 61 62 64 i\umhcr of Primitive Space, 45 0 0 0 50 50 50 50 50 50 50 50 50 50 50 50 Total Potential Number of nights 18,250 18,250 18,250 18,250 18,250 18,250 18,250 18,250 18,250 18,250 18,250 18,250 Average Annual Occupancy Rate 0.0% 0.0% 0.0% 50.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% Avg. Daily RV Rate /1 $ 20 21 22 23 23 24 25 25 26 27 28 29 29 30 31 32 Operating Revenues Expressed in Millions of US Dollars Expressed in Millions of US Dollars Space Rental Revenues $ $ $ $ 0.68 $ 0.76 $ 0.83 $ 0.86 $ 0.88 $ 0.91 $ 0.93 $ 0.96 $ 0.99 $ 1.02 $ I.OS $ 1.08 As % of Room Revenues Food & Beverage 20% 0.14 0.15 0.17 0.17 0.18 0.18 0.19 0.19 0.20 0.20 0.21 0.22 Other Revenues 30% 0.20 0.23 0.25 0.26 0.26 0.27 0.28 0.29 0.30 0.31 0.32 0.33 Subtotal (Non-Room Revenues) 50% $ $ $ $ 0.34 $ 0.38 $ 0.42 $ 0.43 $ 0.44 $ 0.45 $ 0.47 $ 0.48 $ 0.50 $ 0.51 $ 0.53 $ 0.54 Gross Revenues $ $ $ $ 1.02 $ 1.14 $ 1.25 $ 1.28 $ 1.32 $ 1.36 $ 1.40 $ 1.44 $ 1.49 $ 1.53 $ 1.58 $ 1.63 Depactmental Costs & Expenses As % of Departmental Revenues Spaces 25% 0.17 0.19 0.21 0.21 0.22 0.23 0.23 0.24 0.25 0.26 0.26 0.27 Food & Beverage 75% 0.10 0.11 0.12 0.13 0.13 0.14 0.14 0.14 0.15 0.15 0.16 0.16 Other Departments 50% 0.10 0.11 0.12 0.13 0.13 0.14 0.14 0.14 0.15 0.15 0.16 0.16 Total Departmental Expenses(% of Gross Revenues) 37% $ $ $ $ 0.37 $ 0.42 $ 0.46 $ 0.47 $ 0.48 $ 0.50 $ 0.51 $ 0.53 $ 0.55 $ 0.56 $ 0.58 $ 0.60 Gross Operating Revenues 63% $ $ $ $ 0.64 $ 0.72 $ 0.79 $ 0.81 $ 0.84 $ 0.86 $ 0.89 $ 0.91 $ 0.94 $ 0.97 $ 1.00 $ 1.03 Notes: / I Rate, after discounts, per occupied room. Source: Economics Research Associates c:J CJ CJ CJ CJ CJ c::::J CJ c=J CJ C:=J CJ C=:J C=:J C_J CJ 0 CJ CJ Tahlc I .A.4 CARLSBAD BOULEVARD REALIGNMENT -Alternative I, Parcel 4, Land Use Scenario A RV Operating Statement 2001 2002 2003 2004 2005 2006 2007 2008 2009 20IO 2011 2012 2013 2014 2015 Yr. 2001 Value Ytn..l l'.ear..2. Yl:Ju:..J Yl:lu:A Yll.l'...5 fiarJi fill.1 fia.rJ! Yl:a.r..2 Ye.a.rJ.Jl futll Tou:J..2 Yilill mtl4 l:'.w:..1.S Expressed in Millions or US Dollars Expressed in Millions or US Dollars Gross Operating Revenues 0.79 0.81 0.84 0.86 0.89 0.91 0.94 0.97 1.00 1.03 Undistributed Operating Expenses As % of Revenue Administrative & General 5.0% $ $ $ $ 0.05 $ 0.06 $ 0.06 $ 0.06 $ 0,07 $ 0.07 $ 0.07 $ 0.07 $ 0,07 $ 0.08 $ 0.08 $ 0.08 Management Fee 2.0% 0.02 0.02 0.02 0.03 0,03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 Sales & Marketing 5.0% 0.05 0.06 0.06 0.06 0,07 0,07 0.07 0.07 0.07 0.08 0.08 0.08 Energy Costs 6.0% 0.06 0.07 0.07 0.08 0.08 0.08 0.08 0.09 0.09 0.09 0.09 0.10 Repairs & Maintenance 4.0% 0.04 0.05 0.05 0.05 0.05 0.05 0.06 0.06 0.06 0.06 0.06 0.07 Total 22.0% $ $ $ $ 0.22 $ 0.25 $ 0.27 $ 0.28 $ 0.29 $ 0.30 $ 0.31 $ 0.32 $ 0.33 $ 0.34 $ 0.35 $ 0.36 Gross Operating Profit 41.3% $ $ $ $ 0.42 $ 0.47 $ 0.51 $ 0.53 $ 0.55 $ 0.56 $ 0.58 $ 0.60 $ 0.61 $ 0.63 $ 0.65 $ 0.67 Ei1ed Expenses & Capital Costs Property Taxes (based on 1% of prior year capitalized value) fommla 0.03 0.03 0.03 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.04 Incentive Fee 2.0% 0.02 0.02 0.02 0.03 0,03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 Insurance 1.0% 0.01 0.01 0.01 0.01 0.01 0.01 0.G! 0.01 0.01 0.02 0.02 0.02 Capital Reserve 2.0% 0.02 0.02 0.02 0.03 0,03 0,03 0.03 0.03 0.03 0.03 0.03 0.03 Total 5.0% 0.05 0.09 0.10 0.10 $ 0.10 $ 0.10 $ 0.11 $ 0.11 $ 0.11 $ 0.12 $ 0.12 $ 0.12 NET OPERA TING INCOME (ex. depr., interest & tax) 0.37 0.38 0.42 0.43 0.44 0.46 0.47 0.49 0.50 0.52 0.53 0.55 Source: Economics Research Associates C) CJ CJ CJ CJ CJ CJ CJ CJ C) C:=J CJ Table I .A.5 CARLSBAD BOULEY ARD REALIGNMENT-Alternative l, Parcel 4, Land Use Scenario A (BEFORE TAXES & FINANCING) RV Operating Statement 2001 2002 2003 2004 2005 2006 2007 Yr. 2001 Value Tou:J. Year...2 Yil.L1 l'l:au l'.l:a.t..S Yl:aui Yl:a.c.1 Sources of Funds Expressed in Millions of US Dollars Net Operating Income 0.37 0.38 0.42 0.43 Reversion@ 11.0% Less Cost of Sales @ 3.0% Net Sales Proceeds Total Sources of Funds 0.37 0.38 0.42 0.43 Development Costs Inflation Assumptions I 1.06 1.09 1.13 1.16 1.19 1.23 1.27 Number of Spaces 95 48 48 Development Costs -Annual % 0% 50% 50% 0% 0% 0% 0.0% Development Costs per space /1 $ 15,263 0,79 0.82 Total Development Costs $ $ 0.79 $ 0.82 $ $ $ $ NET CASH FLOW (before financing & taxes) 0.79 0.82 0.37 0.38 0.42 0.43 Cumulative Cash Flow 0.79 1.61) (1.24) (0.86) (0.44) (0.01) Net Present Value@ 14.0% Sl.20 million 2003 dollars Notes: / I New development costs include direct costs, off-site & on-site costs, indirect costs, and developer profit. /2 Included in development cost per space Source: Economics Research Associates CJ CJ CJ c=J CJ CJ CJ 2008 2009 2010 2011 2012 2013 2014 2015 Tou:J! ~ fillL1II Ynr..ll filu:.ll Yea.r...U Yw:...14 fur.1.5 Expressed in Millions of US Dollars $ 0.44 $ 0.46 $ 0.47 $ 0.49 $ 0.50 $ 0.52 $ 0.53 $ 0.55 5.00 0.15 $ $ $ $ $ $ $ $ 4.85 $ 0.44 $ 0.46 $ 0.47 $ 0.49 $ 0.50 $ 0.52 $ 0.53 $ 5.40 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% $ $ $ $ $ $ $ $ 0.44 0.46 0.47 0.49 0.50 0.52 0.53 5.40 0.44 0.90 1.37 1.85 2.36 2.87 3.41 8.80 CJ CJ CJ CJ CJ CJ CJ CJ CJ Table 2.A. I CARLSBAD BOULEY ARD REALIGNMENT -Alternative 2, Land Use Scenario A PROFORMA CASH FLOW-PRELIMINARY RESIDUAL LAND VALUE (BEFORE TAXES & FINANCING) 2003 2004 2005 Yr. 2001 Yea.r...l Yea.1:..2 fiaLJ Inflation Factor 3% Value I 1.06 1.09 1.13 SOURCES AND USES OF FUNDS Net Sources of Funds By Land Use Executive Mtg. Hotel Net Cash Flow (11.06) (11.40) Time Share (11.54) 2006 Y.w:.A 1.16 2.82 9.24 CJ CJ 2007 2008 Yilr...5 Tou:Ji 1.19 1.23 2.84 2.93 (2.72) 9.81 CJ c:::J CJ CJ CJ c:J CJ 02-Oct-01 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yl:a.c.1 1'.eJu:J! Ye.a.r..2 Y.ear...111 fiar..ll Yeaill futl3. l'.flu:.li Yw:..1.5 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I 3.02 3.11 3.21 3.31 3.41 3.52 3.63 3.74 41.24 10.IO 10.40 1.07 Sub-total $ $ (11.06) $ (22.93) $ 12.06 $ 0.12 $ 12.74 $ 13.12 $ 13.52 $ 4.28 $ 3.31 $ 3.41 $ 3.52 $ 3.63 $ 3.74 $ 41.24 Net Cash Flow After Developer Costs Is I $ (I 1.111 $ (22.9)1 $ 12.1 Is 0.1 Is 12.11 $ 13.1 Is 13.5 j s 43 Is 3.31 s 3.41 $ 3.51 s 3.61 $ 3.71 $ 41.21 Net eresent Y:alue After Denloper Costs Net Present Value @ 14.0% $9.78 million US dollars Source: Economics Research Associates CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ c=J CJ CJ CJ CJ CJ C:J CJ CJ Table 2.A.2 CARLSBAD BOULEVARD REALIGNMENT-Alternative 2, Parcel I, Land Use Scenario A FISCAL REVENUES 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 fiar...1 futl Tou:..3 l'.llu Yw:..S l'.w:..6 ~ ~ fu.c..2 fiJu:..1ll ~ fiar...12 Yl:w:.lJ Y.ear...li fiarJ..S Inflation Factor 3% I 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.601 PROPERTY TAXES Expressed In Millions of US Dollars Larul....l.rn:s Executive Mtg. Hotel $ $ $ $ $ 0.28 $ 0.29 $ 0.29 $ 0.30 $ 0.30 $ 0.31 $ 0.32 $ 0.32 $ 0.33 $ 0.34 $ 0.34 Time Share $ $ $ $ $ 0.11 $ 0.22 $ 0.34 $ 0.46 $ 0.59 $ 0.62 $ 0.63 $ 0.64 $ 0.65 $ 0.67 $ 0.68 Total Property Tax Increment $ $ $ $ $ 0.39 $ 0.51 $ 0.63 $ 0.76 $ 0.90 $ 0.93 $ 0.95 $ 0.96 $ 0.98 $ 1.00 $ 1.02 City's Share 4.75% of Property Taxes $ $ $ $ $ 0,02 $ 0,02 $ 0.03 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.05 $ 0.05 $ 0.05 $ 0.05 RDA's Non-housing Share 60.00% of Property Taxes $ $ $ $ $ 0.23 $ 0.30 $ 0.38 $ 0.46 $ 0.54 $ 0.56 $ 0.57 $ 0.58 $ 0.59 $ 0.60 $ 0.61 Expressed In Millions of US Dollars TRANSIENT OCCUPANCY TAXES Executive Mtg. Hotel $ $ $ $ 5.57 $ 6.18 $ 6.36 $ 6.55 $ 6.75 $ 6.95 $ 7.16 $ 7.38 $ 7.60 $ 7.83 $ 8.06 $ 8.30 Transient Occupancy Tax@ I 0.00% of Room Revenue $ $ $ $ 0.56 $ 0.62 $ 0.64 $ 0.66 $ 0.68 $ 0.70 $ 0.72 $ 0.74 $ 0.76 $ 0.78 $ 0.81 $ 0.83 Gross Fiscal Operating Income From TOT & Tl s $ $ $ 0.56 $ 0.87 $ 0.96 $ 1.06 s 1.17 s 1.28 $ 1.32 $ 1.35 $ 1.38 s 1.42 s 1.46 $ 1.49 SALES TAX REVENUE Food & Beverage & 50% of Other Hotel Revenues $ $ $ $ 0.03 $ 0.03 $ O.o3 $ 0.03 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 Total Sales Tax Revenue $ $ $ $ 0.03 $ 0.03 $ 0,03 $ 0.03 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 TOT AL FISCAL REVENUE Property Tax Revenue $ $ $ $ $ 0.25 $ 0.33 $ 0.41 $ 0.49 $ 0.58 $ 0.60 $ 0.61 $ 0.62 $ 0.64 $ 0.65 $ 0.66 Transient Occupancy Tax Revenue $ $ $ $ 0.56 $ 0.62 $ 0.64 $ 0.66 $ 0.68 $ 0.70 $ 0.72 $ 0.74 $ 0.76 $ 0.78 $ 0.81 $ 0.83 Sales Tax Revenue $ $ $ $ 0.03 $ 0,03 $ 0.03 $ 0,03 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 Total Fiscal Revenue $ $ $ $ 0.59 $ 0.90 $ 1.00 $ 1.10 $ 1.20 $ 1.31 $ 1.35 $ 1.39 $ 1.42 $ 1.46 $ I.SO $ 1.54 SOll[CC5 o[ Euods FISCAL OPERA TING INCOME $ $ $ $ 0.59 $ 0.90 $ 1.00 $ 1.10 $ 1.20 $ 1.31 $ 1.35 $ 1.39 $ 1.42 $ 1.46 $ I.SO $ 1.54 Reversion@ 7% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 23.64 Total Sources of Funds $ $ $ $ 0.59 $ 0.90 $ 1.00 $ 1.10 $ 1.20 $ 1.31 $ 1.35 $ 1.39 $ 1.42 $ 1.46 $ I.SO $ 25.18 NET CASH FLOW Is Is Is Is o.59 Is o.9o Is 1.00 Is i.10 Is 1.2ols 1.31 I s 1.35 I s 1.39 I $ 1.42 I s 1.46 I s 1.50 I s 25.18 I Net Present Value_@ ___ 10% Sll.51 million 2003 dollars Source: Economics Research Associates CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ Table 2.A.3 CARLSBAD BOULEVARD REALIGNMENT-Alternative 2, Parcel 1, Land Use Scenario A Executive Meeting Hotel Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 200 I Value fiai:..l l'.n.t..2 fiaLJ Yew:.A Ynr..S l'.ll.r..6 Yw:_1 fi.aL8 filu:..'! fiar..lll Ytatl1 Yllr.ll Ytar..ll Yw:..14 Tou:.lS Assumptions Inflation Factor 3% 1.06 1.09 1.13 l.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Real Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 llottl -E,cc Cnnf. Ctr. :'\'umhcr of Room1i 150 0 0 0 150 150 150 150 150 150 150 150 150 150 150 150 Total Potential Number of Room nights 54,750 54,750 54,750 54,750 54,750 54,750 54,750 54,750 54,750 54,750 54,750 54,750 Average Annual Occupancy Rate 0.0% 0.0% 0.0% 65.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% Avg. Daily Rm. Rate Hotel 2 /1 $ 135 143 148 152 157 161 166 171 176 181 187 192 198 204 210 217 Operating Revenues Expressed in Millions of US Dollars Expressed in Millions of US Dollars Room Revenues $ $ $ $ 5.57 $ 6.18 $ 6.36 $ 6.55 $ 6.75 $ 6.95 $ 7.16 $ 7.38 $ 7.60 $ 7.83 $ 8.06 $ 830 As % of Room Revenues Food & Beverage 45% 2.51 2.78 2.86 2.95 3.04 3.13 3.22 3.32 3.42 3.52 3.63 3.74 Other Revenues 15% 0.84 0.93 0.95 0.98 1.01 1.04 1.07 I.I I 1.14 1.17 1.21 1.25 Subtotal (Non-Room Revenues) 60% $ $ $ $ 3.34 $ 3.71 $ 3.82 $ 3.93 $ 4.05 $ 4.17 $ 4.30 $ 4.43 $ 4.56 $ 4.70 $ 4.84 $ 4.98 Gross Revenues $ $ $ $ 8.91 $ 9.88 $ 10.18 $ 10.49 $ I0.80 $ 11.13 $ 11.46 $ 11.80 $ 12.16 $ 12.52 $ 12.90 $ 13.28 Departmental Costs & Expeoses As % of Departmental Revenues Rooms 25% 1.39 1.54 1.59 1.64 1.69 1.74 1.79 1.84 1.90 1.96 2.02 2.08 Food & Beverage 75% 1.88 2.09 2.15 2.21 2.28 2.35 2.42 2.49 2.56 2.64 2.72 2.80 Other Departments 50% 0.42 0.46 0.48 0.49 0.51 0.52 0.54 0.55 0.57 0.59 0.60 0.62 Total Departmental Expenses(% of Gross Revenues) 41% $ $ $ $ 3.69 $ 4.09 $ 4.22 $ 4.34 $ 4.47 $ 4.61 $ 4.74 $ 4.89 $ 5.03 $ 5.18 $ 5.34 $ 5.50 Gross Operating Revenues 59% $ $ $ $ 5.22 $ 5.79 $ 5.97 $ 6.14 $ 6.33 $ 6.52 $ 6.71 $ 6.92 $ 7.12 $ 7.34 $ 7.56 $ 7.78 Notes: /I Rate. after discounts, per occupied room. Source: Economics Research Associates C:J CJ c=J CJ CJ c=J CJ CJ CJ CJ CJ CJ CJ CJ C=:J CJ c=J CJ CJ Table 2.A.4 CARLSBAD BOULEVARD REALIGNMENT -Alternative 2, Parcell, Land Use Scenario A Executive Meeting Hotel Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value Yw:..l Yilr..2 Yll.c..J Ytau Tuu:..5 l'.llr..6 ful:.1 fiar..ll Yea.r..2 .Yllr..lll l:'f.lll:..ll Yw:..12 Yw:..U Yw:..14 .l'w:..1.S Expressed in Millions of US Dollars Expressed in Millions of US Dollars Gross Operating Revenues 5.97 6.14 6.33 6.52 6.71 6.92 7.12 7.34 7.56 7.78 lludistcibuted Operating Expenses As % of Revenue Administrative & General 5.0% $ $ $ $ 0.45 $ 0.49 $ 0.51 $ 0.52 $ 0.54 $ 0.56 $ 0.57 $ 0.59 $ 0.61 $ 0.63 $ 0.64 $ 0.66 Management Fee 2.0% 0.18 0.20 0.20 0.21 0.22 0.22 0.23 0.24 0.24 0.25 0.26 0.27 Sales & Marketing 5.0% 0.45 0.49 0.51 0.52 0.54 0.56 0.57 0.59 0.61 0.63 0.64 0.66 Energy Costs 6.0% 0.53 0.59 0.61 0.63 0.65 0.67 0.69 0.71 0.73 0.75 0.77 0.80 Repairs & Maintenance 4.0% 0.36 0.40 0.41 0.42 0.43 0.45 0.46 0.47 0.49 0.50 0.52 0.53 Total 22.0% $ $ $ $ 1.96 $ 2.17 $ 2.24 $ 2.31 $ 2.38 $ 2.45 $ 2.52 $ 2.60 $ 2.67 $ 2.75 $ 2.84 $ 2.92 Gross Operating Profit 36.6% $ $ $ $ 3.26 $ 3.62 $ 3.73 $ 3.84 $ 3.95 $ 4.07 $ 4.19 $ 4.32 $ 4.45 $ 4.58 $ 4.72 $ 4.86 Eiled Expenses & Capital Costs Property Taxes fommla 0.28 0.29 0.29 0.30 0.30 0.31 0.32 0.32 0.33 0.34 0.34 Incentive Fee 2.0% 0.18 0.20 0.20 0.21 0.22 0.22 0.23 0.24 0.24 0.25 0.26 0.27 Insurance 1.0% 0.09 0.10 0.10 0.10 0.11 0.11 0.11 0.12 0.12 0.13 0.13 0.13 Capital Reserve 2.0% 0.18 0.20 0.20 0.21 0.22 0.22 0.23 0.?4 0.24 0.25 0.26 0.27 Total 5.0% 0.45 0.78 0.80 0.82 $ 0.84 $ 0.86 $ 0.88 $ 0.91 $ 0.93 $ 0.96 $ 0.98 $ 1.01 NET OPERA TING INCOME (ex. depr., interest & tax) 2.82 2.84 2.93 3.02 3.11 3.21 3.31 3.41 3.52 3.63 3.74 3.85 Source: Economics Research Associates C:=J c:J CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ Table 2.A.5 CARLSBAD BOULEVARD REALIGNMENT-Alternative 2, Parcel I, Land Use Scenario A (BEFORE TAXES & FINANCING) Hotel Operating Statement 2003 2004 2005 2006 2007 2008 2009 Yr. 2001 Value Yntl Ye.u:..2 Ynr..J. fill..4 Yl:aJ.:..S .YuLli fill.1 Sources of Funds Expressed in Millions of US Dollars Net Operating Income 2.82 2.84 2.93 3.02 Reversion@ 10.0% Less Cost of Sales @ 3.0% Net Sales Proceeds Total Sources of Funds 2.82 2.84 2.93 3.02 Development Costs Inflation Assumptions I 1.06 1.09 1.13 1.16 1.19 1.23 1.27 Number of Rooms 150 75 75 DeveJopment Costs -Annual % 0% 50% 50% 0% 0% 0% 0.0% Development Costs per room -Hotel /I $ 135,000 I 1.06 11.40 Total Development Costs $ $ I 1.06 $ 11.40 $ $ $ $ NET CASH FLOW (before financing & taxes) 11.06 11.40 2.82 2.84 2.93 3.02 Cumulative Cash Flow 11.06 22.46) (19.64) (16.80) (13.87) (10.85) Net Present Value@ 14.0% Sl.02 million 2003 dollars Notes: /I New development costs include direct costs, off-site & on-site costs, indirect costs, and developer profit. /2 Included in development cost per room Source: Economics Research Associates CJ CJ CJ CJ CJ CJ CJ 2010 2011 2012 2013 2014 2015 2016 2017 fu.rJ! l:'.ilr..2 Tou:..1.11 Yntll Yi:a.r..ll ~ l'.ll1:.li fuill Expressed in Millions of US Dollars $ 3.11 $ 3.21 $ 3.31 $ 3.41 $ 3.52 $ 3.63 $ 3.74 $ 3.85 38.54 l.16 $ $ $ $ $ $ $ $ 37.38 $ 3.11 $ 3.21 $ 3.31 $ 3.41 $ 3.52 $ 3.63 $ 3.74 $ 41.24 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% $ $ $ $ $ $ $ $ 3.11 3.21 3.31 3.41 3.52 3.63 3.74 41.24 (7.74) (4.53) (1.22) 2.19 5.71 9.34 13.07 54.31 C=:J CJ CJ c::J CJ CJ CJ CJ CJ CJ CJ CJ CJ C:::J c=i CJ CJ CJ CJ Table 2.A.6 CARLSBAD BOULEVARD REALIGNMENT -Alternative 2, Parcel 1, Land Use Scenario A Time Share 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value Tuu:..l Yl:aL2 .Yw:..3. Yea.t.A filll:..5 .Year.Ji Ycai:.1 Yeac.11 fiaJ:..2 Ye.ar...lll .Ye.ar..ll Yl:ar...12. fiw:..ll ~ Yn.r..15 Assumptions Inflation Factor 3% 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Real Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Time Sha.-c {Numhe,· of Rooms) 100 0 0 0 50 50 100 100 100 100 100 100 100 100 100 100 Total Number of Intervals Available 2,550 2,550 5,100 5,100 5,100 5,100 5,100 5,100 5,100 5,100 5,100 5,100 Total Number of Intervals Sold Per Year 1,000 1,000 1,000 1,000 1,000 100 Cumulative Intervals Sold 1,000 2,000 3,000 4,000 5,000 5,100 5,100 5,100 5,100 5,100 5,100 5,100 Interval Sales Price $ 18,500 $ 19,627 $20,215 $20,822 $21,447 $22,090 $22,753 $23,435 $24,138 $24,862 $25,608 $26,377 $27,168 $27,983 $28,822 $ 29,687 Sales Revenues Expressed in Millions or US Dollan Expressed in Millions or US Dollan Annual Sales Volume $ $ $ $ 21.45 $ 22.09 $ 22.75 $ 23.44 $ 24.14 $ 2.49 $ $ $ $ $ $ Cumulative Sales Volume 21.45 43.54 66.29 89.72 I 13.86 I 16.35 116.35 116.35 116.35 116.35 116.35 I 16.35 Cost of Sales Per Room Product Cost (excluding land cost) ii $ 205,000 11.54 12.24 Gross Profit Before Land Costs $ $ $(11.54) $ 21.45 $ 9.85 $ 22.75 $ 23.44 $ 24.14 $ 2.49 $ $ $ $ $ $ Cumulative Profit Before Land Costs (11.54) 9.91 19.76 42.51 65.95 90.09 92.57 92.57 92.57 92.57 92.57 92.57 92.57 Costs & Expenses/2 As % of Annual Gross Sales Commissions 22.0% $ $ $ $ 4.72 $ 4.86 $ 5.01 $ 5.16 $ 5.31 $ 0.55 $ $ $ $ $ $ Marketing 22.0% 4.72 4.86 5.01 5.16 5.31 0.55 Sales Overhead 5.0% 1.07 1.10 1.14 1.17 1.21 0.12 Administration 7.0% 1.50 1.55 1.59 1.64 1.69 0.17 Acct./Legal/Counsulting 0.5% 0.11 0.11 0.11 0.12 0.12 0.01 Depreciation 0.3% 0.06 0.07 0.07 0.07 0.07 0.01 Other 0.1% 0,02 0.02 0.02 0.02 0.02 0.00 Total Cost & Expenses(% of Annual Gross Sales) 56.9% $ $ $ $ 12.20 $ 12.57 $ 12.95 $ I 3.33 $ 13.73 $ 1.41 $ $ $ $ $ $ Net Development ecofit (I oss) $ $ $(11.54) $ 9.24 $ (2.72) $ 9.81 $ IO.IO $ 10.40 $ 1.07 $ $ $ $ $ $ Cumulative Cash Flow $ $ $(11.54) $ (2.29) $ (5.01) $ 4.80 $ 14.90 $ 25.30 $ 26.37 $ 26.37 $ 26.37 $ 26.37 $ 26.37 $ 26.37 $ 26.37 Net Present Value@ 15.0% $8.09 million 2003 dollars Notes: /I Development costs include allocated share of onsite/offsite costs. /2 Selling and marking expenses only. Operating expenses are covered 100% by annual fees. Source: RCI Consulting, Inc.; and Economics Research Associates CJ CJ C:J CJ CJ CJ c::J c=i CJ Table 3.A. I CARLSBAD BOULEY ARD REALIGNMENT -Alternative 3, Land Use Scenario A PROFORMA CASH FLOW-PRELIMINARY RESIDUAL LAND VALUE (BEFORE TAXES & FINANCING) 2003 2004 2005 Yr. 2001 fu.c..1 Y.e.ar...2 Yelu:.J Inflation Factor 3% Value I 1.06 1.09 1.13 SOURCES AND USES OF FUNDS Net Sources of Funds By I and Use Commercial Retail Cash Flow (2.95) (3.04) Office I (9.90) Time Share (17.30) Full Service Hotel (20.49) (21.10) Time Share 6A (6.92) Office 68 !1,71) 2006 Yl:Ju:A 1.16 1.74 1.59 9.24 5.55 6.93 0.30 Sub-total $ $ (23.44) $ (59.99) $ 25.36 CJ 2007 Yflll:..S 1.19 2.13 1.84 9.52 5.60 7.43 0.36 $ 26.89 $ Net Cash Flow After Developer Costs is I s 123.4!1 s i60.01i s 25.4 Is 26.91 $ rset fcesent Y:alue After Qerelopec Costs Net Present Value@_ 14.0% $29.87 million 2003 dollars CJ c::::J CJ CJ CJ CJ CJ CJ CJ 02-Oct-01 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ~ Yea.r..1 Yw:J! Yi:iu:...2 Ye.ar..lJI Year...11 fur..12 Yflu:..U haill Yea.r..lS 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I 2.20 2.26 2.33 2.40 2.47 2.55 2.62 2.70 2.78 30.38 2.00 2.06 2.13 2.19 2.25 2.32 2.39 2.46 2.54 27.97 (9.10) IO.IO 10.40 10.72 11.04 5.77 5.95 6.14 6.33 6.52 6.72 6.93 7.15 7.37 81.27 0.38 0.39 0.40 0.41 0.42 0.44 0.45 0.46 0.48 5.24 1.25 $ 20.77 $ 21.39 $ 22.04 $ 22.71 $ 12.03 $ 12.40 $ 12.77 $ 13.16 $ 144.86 1.21 $ 20.s Is 21.4 Is 22.0 Is 22.1 I$ 12.0 Is 12.41 $ 12.s Is 13.21 $ 144.91 CJ c=i c=J c=i CJ CJ CJ CJ CJ CJ CJ CJ c:::J CJ CJ CJ c:::=i CJ CJ Table 3.A.2 CARLSBAD BOULEVARD REALIGNMENT -Alternative 3, Land Use Scenario A FISCAL REVENUES 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ~ fill.l Tuu:.3. ~ fiac..S Yw:.1i filu:.1 ~ l'.ear..2 ~ Yf.ar..11 fiar...ll fuLll fuL14 Yw:..15 Inflation Factor 3% I 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I PROPERTY TAXES Expressed In Millions of US Dollars Lan.ll.llsu Commercial Retail $ $ $ $ $ 0.20 $ 0.21 $ 0.22 $ 0.22 $ 0.22 $ 0.23 $ 0.23 $ 0.24 $ 0.24 $ 0.25 $ 0.25 Office I $ $ $ $ $ 0.18 $ 0.19 $ 0.20 $ 0.20 $ 0.21 $ 0.21 $ 0.22 $ 0.22 $ 0.23 $ 0.23 $ 0.23 Time Share 2 $ $ $ $ $ 0.11 $ 0.22 $ 0.34 $ 0.46 $ 0.59 $ 0.73 $ 0.87 $ 0.89 $ 0.91 $ 0.92 $ 0.94 Full-Service Hotel $ $ $ $ $ 0.55 $ 0.57 $ 0.58 $ 0.59 $ 0.60 $ 0.61 $ 0.62 $ 0.64 $ 0.65 $ 0.66 $ 0.68 Time Share 6A $ $ $ $ $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.09 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.11 Office 68 $ $ $ $ $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 Total Property Tax Increment $ $ $ $ $ 1.17 $ 1.32 $ 1.46 $ 1.60 $ 1.76 $ 1.92 $ 2.08 $ 2.12 $ 2.17 $ 2.21 $ 2.25 City's Share 4.75% of Property Taxes $ $ $ $ $ 0.06 $ 0.06 $ 0.07 $ 0.08 $ 0.08 $ 0.09 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.11 RDA's Non-housing Share 60.00% of Property Taxes $ $ $ $ $ 0.70 $ 0.79 $ 0.87 $ 0.96 $ 1.05 $ 1.15 $ 1.25 $ 1.27 $ 1.30 $ 1.33 $ 1.35 Expressed In Millions of US Dollars TRANSIENT OCCUPANCY TAXES Full Service Hotel $ $ $ $ 10.31 $ 11.44 $ 11.78 $ 12.14 $ 12.50 $ 12.88 $ 13.26 $ 13.66 $ 14.07 $ 14.49 $ 14.93 $ 15.38 Transient Occupancy Tax@ 10.00% of Room Revenue $ $ $ $ 1.03 $ 1.14 $ 1.18 $ 1.21 $ 1.25 $ 1.29 $ 1.33 $ 1.37 $ 1.41 $ 1.45 $ 1.49 $ 1.54 Gross Fiscal Operating Income From TOT & Tl s s $ s 1.03 s 1.90 s 2.03 s 2.16 $ 2.29 s 2.42 $ 2.57 s 2.71 s 2.78 s 2.85 s 2.92 s 3.00 SALES TAX REVENUE Retail Commercial $ $ $ $ 0.23 $ 0.28 $ 0.29 $ 0.30 $ 0.31 $ 0.32 $ 0.33 $ 0.34 $ 0.35 $ 0.36 $ 0.37 $ 0.38 Food & Beverage & 50% of Other Hotel Revenues $ $ $ $ om $ 0.08 $ 0.08 $ 0.08 $ 0.09 $ 0.09 $ 0.09 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.11 Total Sales Tax Revenue $ $ $ $ 0.30 $ 0.36 $ 0.37 $ 0.39 $ 0.40 $ 0.41 $ 0.42 $ 0.43 $ 0.45 $ 0.46 $ 0.47 $ 0.49 TOTAL FISCAL REVENUE Property Tax Revenue $ $ $ $ $ 0.76 $ 0.85 $ 0.94 $ 1.04 $ 1.14 $ 1.24 $ 1.35 $ 1.38 $ 1.40 $ 1.43 $ 1.46 Transient Occupancy Tax Revenue $ $ $ $ 1.03 $ 1.14 $ 1.18 $ 1.21 $ 1.25 $ 1.29 $ 1.33 $ 1.37 $ 1.41 $ 1.45 $ 1.49 $ 1.54 Sales Tax Revenue $ $ $ $ 0.30 $ 0.36 $ 0.37 $ 0.39 $ 0.40 $ 0.41 $ 0.42 $ 0.43 $ 0.45 $ 0.46 $ 0.47 $ 0.49 Total Fiscal Revenue $ $ $ $ 1.34 $ 2.26 $ 2.40 $ 2.54 $ 2.69 $ 2.83 $ 2.99 $ 3.15 $ 3.23 $ 3.31 $ 3.40 $ 3.49 Soutcfs a[ Euods FISCAL REVENUE $ $ $ $ 1.34 $ 2.26 $ 2.40 $ 2.54 $ 2.69 $ 2.83 $ 2.99 $ 3.15 $ 3.23 $ 3.31 $ 3.40 $ 3.49 Reversion@ 7% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 53.62 Total Sources of Funds $ $ $ $ 1.34 $ 2.26 $ 2.40 $ 2.54 $ 2.69 $ 2.83 $ 2.99 $ 3.15 $ 3.23 $ 3.31 $ 3.40 $ 57.11 NET CASH FLOW Is Is Is Is 1.34 ! S 2.261 S 2.40 Is 2.541 S 2.691 S 2.831 S 2.99 IS 3.15 Is 3,231 S 3.31 Is 3.40 I s 51.11 I Net Present Value@ 10% $26.25 million 2003 dollars Source: Economics Research Associates c:::J CJ c::=i CJ CJ CJ CJ CJ CJ CJ c=J C:=J c=i CJ CJ CJ CJ CJ CJ Table 3.A.3 CARLSBAD BOULEVARD REALIGNMENT-Alternative 3, Parcel 1, Land Use Scenario A Retail/Commercial: Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 fur.J. Ynr.l Yta.Ll. Year.A Yl:lu:..S Yea.c...6 l'.taLZ Yea.r...8 Yfar..2 fur...1ll l'.far.ll YtaLU Yi:ar..L1 ~ Year...15 Inflation Factor 3% 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Rental Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Cumulative Gross Leasable Area Commercial Retail 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40.000 40,000 40,000 40,000 40,000 Restaurants 40,000 40.000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 Total 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 Occupancy Rate Commercial Retuil 0% 0% 0% 80% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Re\faurants 0% 0% 0% 80% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Average NNN Base Rent Per s.f. Per Yr/I US$ ( ·ommcrcial R<'lail $ 20.00 21.22 21.85 22.51 23.19 23.88 24.60 25.34 26.10 26.88 27.68 28.52 29.37 30.25 31.16 32.09 Restaurants $ 30.00 31.83 32.78 33.77 34.78 35.82 36.90 38.00 39.14 40.32 41.53 42.77 44.06 45.38 46.74 48.14 Average Gross Sales Per Square Foot Per Year US$ (:ommcrcial Rl'!ail $ 250.00 265 273 281 290 299 307 317 326 336 346 356 367 378 389 401 Restaurants $ 375.00 398 410 422 435 448 461 475 489 504 519 535 551 567 584 602 Expressed in Millions of US Dollars Expressed in Millions of US Dollars Operating Revenues Base Rent Revenue $ $ $ $ 1.85 $ 2.27 $ 2.34 $ 2.41 $ 2.48 $ 2.55 $ 2.63 $ 2.71 $ 2.79 $ 2.87 $ 2.96 $ 3.05 Gross Revenues $ $ $ $ 1.85 $ 2.27 $ 2.34 $ 2.41 $ 2.48 $ 2.55 $ 2.63 $ 2.71 $ 2.79 $ 2.87 $ 2.96 $ 3.05 Operating Expenses %of Rev. Administrative & General 4.0% $ $ $ $ 0.07 $ 0.09 $ 0.09 $ 0.10 $ 0.10 $ 0.10 $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.12 $ 0.12 Sales & Marketing 2.0% 0.04 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.06 0.06 0.06 0.06 Total 6.0% $ $ $ $ 0.11 $ 0.14 $ 0.14 $ 0.14 $ 0.15 $ 0.15 $ 0.16 $ 0.16 $ 0.17 $ 0.17 $ 0.18 $ 0.18 NET OPERATING INCOME (ex. depr., interest & tax) $ $ $ $ 1.74 $ 2.13 $ 2.20 $ 2.26 $ 2.33 $ 2.40 $ 2.47 $ 2.55 $ 2.62 $ 2.70 $ 2.78 $ 2.87 Notes: / I Triple-net rent where tenant pays for pro-rata share of common area charges, insurance, property taxes, and utilities in addition to base rent. No rent for tenant improvements; tenants pay for improvements. Source: Economics Research Associates c=i c::J C::J CJ c=i CJ c=i CJ c::J CJ c::J' c:::J C:=J c:J c:J CJ CJ c=i CJ Table 3.A.4 CARLSBAD BOULEVARD REALIGNMENT-Alternative 3, Parcel 1, Land Use Scenario A Retail/Commercial: Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yea.t..l .Y!:w:..l fia.c..l l'.faL4 Yl:ll.l:.S fiar..6 l'.ttt:.1 Yea.r...8 ~ Yfar..lJl l'fa.t.ll fu.r..12. fi.aL1J Ye.ar...14 ~ S11uri:es of Euods Expressed in Millions of US Dollars Expressed in Millions of US Dollars Net Operating Income $ $ $ $ 1.74 $ 2.13 $ 2.20 $ 2.26 $ 2.33 $ 2.40 $ 2.47 $ 2.55 $ 2.62 $ 2.70 $ 2.78 $ 2.87 Reversion@ 10.0% $28.66 Less Cost of Sales @ 4.0% $ 1.15 Net Sale Proceeds $ $ $ $ $ $ $ $ $ $ $ $ $ $ $27.51 Total Sources of Funds $ $ $ $ 1.74 $ 2.13 $ 2.20 $ 2.26 $ 2.33 $ 2.40 $ 2.47 $ 2.55 $ 2.62 $ 2.70 $ 2.78 $30.38 Denlopmeot Costs Gross Leasable Area (s.f.) 80,000 40,000 40,000 Inflation Assumptions I 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I Commercial Ret:,il 0.0% 50.0% 50.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Restaurants 0.0% 50.0% 50.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% New Development Costs/2 $ 135.00 per sf $ $ 2.95 $ 3.04 $ $ $ $ $ $ $ $ $ $ $ -$ Total Development Costs 2.95 3.04 NET CASH FLOW (before financing & taxes) 2.95 3.04 1.74 2.13 2.20 2.26 2.33 2.40 2.47 2.55 2.62 2.70 2.78 30.38 CUMULATIVE CASH FLOW (2.95) (5.99 4.25) (2.11) 0.08 2.35 4.68 7.08 9.55 12.10 14.72 17.42 20.20 50.58 -Residual Land Value= Net Present Value@ 14.0% $8.28 million 2003 dollars Notes: / I New development costs, include direct costs, indirect costs, and developer profit. Source: Economics Research Associates c::=i c=i CJ CJ c=J C:::J c=J c=i c:J Table 3.A.5 CARLSBAD BOULEVARD REALIGN:1-IENT -Alternative 3, Parcel 1, Land Use Scenario A Office Operating Statement 2003 2004 Yr. 2001 Value fia.cJ. Yeau Inflation Factor 3% 1.06 1.09 Rental Escalation 0% 1.00 1.00 ()flier New 80,000 rota! Cf..\ 80,000 Average Annual Occupancy Rate 0% 0% Occupied Space Average NNN Rent Per s.f .. Per Year $ 22.80 $ 24.19 $ 24.91 2005 2006 Yea.r..l Yl:aU 1.13 1.16 1.00 1.00 80,000 80,000 0% 80% 64,000 $ 25.66 $ 26.43 c=i c=J CJ 2007 2008 2009 2010 Yea.t..S l'fflr_(i fia1:..1 fuLll 1.19 1.23 1.27 1.30 1.00 1.00 1.00 1.00 80.000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 90% 95% 95% 95% 72,000 76,000 76,000 76,000 $ 27.22 $ 28.04 $ 28.88 $ 29.75 Expressed In MIiiions or US Dollars Gross Revenues $ $ $ $ 1.69 $ 1.96 $ 2.13 $ 2.20 $ 2.26 Operating Expenses % of Rev. Administrative & General 4.0% 0.07 0.08 0.09 0.09 0.09 Sales & Marketing 2.0% 0.03 0.04 0.04 0.04 0.05 Total 60% $ $ 0.10 $ 0.12 $ 0.13 $ 0.13 $ 0.14 NET OPERA TING INCOME (ex. depr., Interest & tax) s $ s $ 1.59 s 1.84 s 2.00 s 2.06 s 2.13 Notes: C:::J c=:J CJ c=J c:J 2011 2012 2013 2014 2015 2016 2017 Y.e.ad fiar...lJI Yn.l:.ll fia.cJ.2 Yw:..ll fillLli Yea.r:..15 1.34 1.38 1.43 1.47 I.SI 1.56 1.60 1.00 1.00 1.00 1.00 1.00 1.00 1.00 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 95% 95% 95% 95% 95% 95% 95% 76,000 76,000 76,000 76,000 76,000 76,000 76,000 $ 30.64 $ 31.56 $ 32.51 $ 33.48 $ 34.49 $ 35.52 $ 36.59 Expressed In Millions or US Dollars $ 2.33 $ 2.40 $ 2.47 $ 2.54 $ 2.62 $ 2.70 $ 2.78 0.09 0.10 0.10 0.10 0.10 0.11 0.11 0.05 0.05 0.05 0.05 0.05 0.05 0.06 $ 0.14 $ 0.14 $ 0.15 $ 0.15 $ 0.16 $ 0.16 $ 0.17 s 2.19 s 2.25 s 2.32 s 2.39 s 2.46 s 2.54 s 2.61 /I Triple.net rent where tenant pays for pro-rata share of common area charges, insurance, property taxes, and utilities in addition to base rent. No rent for tenant improvements; tenants pay for improvements. Source: Economics Research Associates c:J c=i c=J c:=J C=:J CJ c=i CJ c::::J c:::=:J CJ c=J CJ c=J c=i c=i c:::=:J C=:J CJ c::J c:::J Table 3.A.6 CARLSBAD BOULEVARD REALIGNMENT-Alternative 3, Parcel I, Land Use Scenario A (BEFORE TAXES & FINANCING) Office Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value fiar..l l'eaL2 fiaL1 ~ Yw:..5 Yfflr_.fi YeaL1 fiarJ! fiaL2 Tou:J.ll futi1 Yeatl.2 fuLlJ l'.mr..14 Yfar.J..5 Sources of Funds Expressed In Millions of US Dollars Expressed in Millions of US Dollars Net Operating Income $ $ $ $ 1.59 $ 1.84 $ 2.00 $ 2.06 $ 2.13 $ 2.19 $ 2.25 $ 2.32 $ 2.39 $ 2.46 $ 2.54 $ 2.61 Reversion@ 10.0% 26.14 Less Cost of Sales@ 3.0% 0.78 Net Sale Proceeds $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 25.35 Total Sources of Funds $ $ $ $ 1.59 $ 1.84 $ 2.00 $ 2.06 $ 2.13 $ 2.19 $ 2.25 $ 2.32 $ 2.39 $ 2.46 $ 2.54 $ 27.97 Development Costs Inflation Assumptions 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 I.Si 1.56 1.60 Gross Leasable Area New 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 Development Costs Annual % New 0% 0% 100% 0% New Development Costs $ 110.00 per sf $ $ $ 9.90 $ $ $ $ $ $ $ $ $ $ $ $ Total Development Costs $ $ $ 9.90 $ $ $ $ $ $ $ $ $ $ $ $ NET CASH FLOW (before financing & taxes) 9.90 1.59 1.84 2.00 2.06 2.13 2.19 2.25 2.32 2.39 2.46 2.54 27.97 CUMULATIVE CASH FLOW 9.90 8.31 6.47 4,47 2.41 0.28 1.91 4.16 6.49 8.88 11.34 13.88 41.85 Residual Land Value= Net Present Value@ 14.0% $4.79 million 2003 dollars Notes: ii New development include direct costs, indirect costs, and developer profit. Source: Economics Research Associates C::J c=J CJ CJ CJ c:J CJ CJ c:J C::J c:J CJ c::J c=J CJ C=:J CJ c:J CJ Table 3.A.7 CARLSBAD BOULEVARD REALIGNMENT-Alternative 3, Parcel 2, Land Use Scenario A Time Share 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value Yiltl Ytat.l YeaLJ Yl:lltl YilI..5 .Yea.c.Ji Yllr.1 ~ YllL2 l'.ear..lll ~ Ycatll Year...1.3. Ytar.1.4 fia.c..15 Assumptions Inflation Factor 3% 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Real Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 l\umhcr of Room!-. 150 0 0 0 75 75 75 150 150 150 150 150 150 150 150 150 Total Number of Intervals Available 3,825 3,825 3,825 7,650 7,650 7,650 7.650 7,650 7,650 7,650 7,650 7,650 Total Number of Intervals Sold Per Year 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Cumulative Intervals Sold 1,000 2,000 3,000 4,000 5,000 6,000 7,000 650 650 650 650 650 Interval Sales Price $ 18,500 $ 19,627 $20,215 $20,822 $21,447 $22,090 $22,753 $23,435 $24,138 $24,862 $25,608 $26,377 $27,168 $27,983 $28,822 $ 29,687 Sales Revenues Expressed in Millions of US Dollars Expressed in Millions of US Dollars Annual Sales Volume $ $ $ $ 21.45 $ 22.09 $ 22.75 $ 23.44 $ 24.14 $ 24.86 $ 25.61 $ $ $ $ $ Cumulative Sales Volume 21.45 43.54 66.29 89.72 113.86 138.73 164.33 164.33 164.33 164.33 164.33 164.33 Cost of Sales Per Room Product Cost (excluding land cost) /I $ 205,000 17.30 18.91 Gross Profit Before Land Costs $ $ $ (17.30) $ 21.45 $ 22.09 $ 3.84 $ 23.44 $ 24.14 $ 24.86 $ 25.61 $ $ $ $ $ Cumulative Profit Before Land Costs (17.30) 4.14 26.23 30.08 53.51 77.65 102.51 128.12 128.12 128.12 128.12 128.12 128.12 Costs & Expeuses/2 As % of Annual Gross Sales Commissions 22.0% $ $ $ $ 4.72 $ 4.86 $ 5.01 $ 5.16 $ 5.31 $ 5.47 $ 5.63 $ $ $ $ $ Marketing 22.0% 4.72 4.86 5.01 5.16 5.31 5.47 5.63 Sales Overhead 5.0% 1.07 1.10 1.14 1.17 1.21 1.24 1.28 Administration 7.0% 1.50 1.55 1.59 1.64 1.69 1.74 1.79 Acct./Legal/Counsulting 0.5% 0.11 0.1 I 0.11 0.!2 0.12 0.12 0.13 Depreciation 0.3% 0.06 0.07 0.07 0.07 0.07 0.07 0.08 Other 0.1% 0.02 0.02 0.02 0.02 0.02 0.02 0.03 Total Cost & Expenses(% of Annual Gross Sales) 56.9% $ $ $ $ 12.20 $ 12.57 $ 12.95 $ 13.33 $ 13.73 $ 14.!5 $ 14.57 $ $ $ $ $ :!Set Development ftofit (l.oss) $ $ $(17.30) $ 9.24 $ 9.52 $ (9.10) $ 10.10 $ 10.40 $ 10.72 $ I 1.04 $ $ $ $ $ Cumulative Cash Flow $ $ $ ( 17.30) $ (8.06) $ 1.46 $ (7.64) $ 2.46 $ !2.86 $ 23.58 $ 34.61 $ 34.61 $ 34.61 $ 34.6! $ 34.61 $ 34.61 Net Present Value@ 15.0% S7.68 million 2003 dollars Notes: /I Development costs include allocated share of onsite/ofTsite costs. /2 Selling and marking expenses only. Operating expenses are covered 100% by annual fees. Source: RCI Consulting, Inc.; and Economics Research Associates C:J c=J CJ CJ CJ C=:J c=J CJ CJ L l c=J CJ c::J c:J C=:J c::::J c=J CJ L J Table 3.A.8 CARLSBAD BOULEVARD REALIGNMENT -Alternative 3, Parcel 3, Land Use Scenario A Full Service Hotel 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value filll:..l fur..l fiai:.J fia.cA fill.r...S fia.c.1i fillr..1 Yll.cJI ~ Yutlll l'.llr...l1 Yw:..12. filu:..1J fiaJ:..li Totr...15 Assumptions Inflation Factor 3% 1.06 1.09 I. I 3 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Real Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 llPl! 1.5 (llotcl 2 -El.cc. Conf. Ctr.) Numlwr of Rooms 300 0 0 0 300 300 300 300 300 300 300 300 300 300 300 300 Total Potential Number of Room nights 109,500 109,500 109,500 109,500 109,500 109,500 109,500 109,500 109,500 109,500 109,500 109,500 Average Annual Occupancy Rate 0.0% 0.0% 0.0% 65.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% Avg. Daily Rm. Rate Hotel 2 /1 $ 125 133 137 141 145 149 154 158 163 168 173 178 184 189 I 95 201 Operating Revenues Expressed in Millions of US Dollars Expressed in Millions of US Dollars Room Revenues $ $ $ $ 10.31 $ 11.44 $ 11.78 $ 12.14 $ 12.50 $ 12.88 $ 13.26 $ 13.66 $ 14.07 $ 14.49 $ 14.93 $ 15.38 As % of Room Revenues Food & Beverage 55% 5.67 6.29 6.48 6.68 6.88 7.08 7.29 7.51 7.74 7.97 8.21 8.46 Other Revenues 30% 3.09 3.43 3.54 3.64 3.75 3.86 3.98 4.10 4.22 4.35 4.48 4.61 Subtotal (Non-Room Revenues) 85% $ $ $ $ 8.77 $ 9.72 $ 10.02 $ 10.32 $ 10.63 $ 10.94 $ 11.27 $ 11.61 $ 11.96 $ 12.32 $ 12.69 $ 13.07 Gross Revenues $ $ $ $ 19.08 $ 21.16 $ 21.80 $ 22.45 $ 23.13 $ 23.82 $ 24.54 $ 25.27 $ 26.03 $ 26.81 $ 27.62 $ 28.44 Departmental Costs & Expenses As % of Departmental Revenues Rooms 25% 2.58 2.86 2.95 3.03 3.13 3.22 3.32 3.42 3.52 3.62 3.73 3.84 Food & Beverage 75% 4.25 4.72 4.86 5.01 5.16 5.31 5.47 5.63 5.80 5.98 6.16 6.34 Other Departments 50% 1.55 1.72 1.77 1.82 1.88 1.93 1.99 2.05 2.11 2.17 2.24 2.31 Total Departmental Expenses(% of Gross Revenues) 44% $ $ $ $ 8.38 $ 9.30 $ 9.57 $ 9.86 $ 10.16 $ 10.46 $ 10.78 $ 11.10 $ 11.43 $ 11.78 $ 12.13 $ 12.49 56% $ $ $ $ 10.70 $ 11.87 $ 12.23 $ 12.59 $ 12.97 $ 13.36 $ 13.76 $ 14.17 $ 14.60 $ 15.04 $ 15.49 $ 15.95 Notes: / l Rate, after discounts, per occupied room. Source: Economics Research Associates CJ D D CJ D D D D D D D D D D D D D D D Table 3.A.9 CARLSBAD BOULEVARD REALIGNMENT. Alternative 3, Parcel 3, Land Use Scenario A Full Service Hotel 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value .Yw:.l fiar.2. Yea.r_J Yll.cA Yea.r..S Yn.t.1i Yil.r.1 YuI:..8 .Yea.c..2 fiatlJI .Yw:.11 fiaLll fiar...13. fia.t..14 Yw:..1.5 Expressed in Millions of US Dollars Expressed in Millions of US Dollars Gross Operating Revenues 12.23 12.59 12.97 13.36 13.76 14.17 14.60 15.04 15.49 15.95 I I ndistributed Operating Expeoses As% of Revenue Administrative & General 5.0% $ $ $ $ 0.95 $ 1.06 $ 1.09 $ 1.12 $ 1.16 $ 1.19 $ 1.23 $ 1.26 $ 1.30 $ 1.34 $ 1.38 $ 1.42 Management Fee 2.0% 0.38 0.42 0.44 0.45 0.46 0.48 0.49 0.51 0.52 0.54 0.55 0.57 Sales & Marketing 5.0% 0.95 1.06 1.09 1.12 1.16 1.19 1.23 1.26 1.30 1.34 1.38 1.42 Energy Costs 6.0% 1.14 1.27 1.31 1.35 1.39 1.43 1.47 1.52 1.56 1.61 1.66 1.71 Repairs & Maintenance 4.0% 0.76 0.85 0.87 0.90 0.93 0.95 0.98 1.01 1.04 1.07 1.10 1.14 Total 22.0% $ $ $ $ 4.20 $ 4.66 $ 4.80 $ 4.94 $ 5.09 $ 5.24 $ 5.40 $ 5.56 $ 5.73 $ 5.90 $ 6.08 $ 6.26 Gross Operating Profit 34.1% $ $ $ $ 6.50 $ 7.21 $ 7.43 $ 7.65 $ 7.88 $ 8.12 $ 8.36 $ 8.61 $ 8.87 $ 9.14 $ 9.41 $ 9.69 Eixed Expenns & Capital Costs Property Taxes (based on 1% of prior year capitalized value) fom1ula 0.55 0.57 0.58 0.59 0.60 0.61 0.62 0.64 0.65 0.66 0.68 Incentive Fee 2.0% 0.38 0.42 0.44 0.45 0.46 0.48 0.49 0.51 0.52 0.54 0.55 0.57 Insurance 1.0% 0.19 0.21 0.22 0.22 0.23 0.24 0.25 0.25 0.26 0.27 0.28 0.28 Capital Reserve 2.0% 0.38 0.42 0.44 0.45 0.46 0.48 0.49 0.51 0.52 0.54 0.55 0.57 Total 5.0% 0.95 1.61 1.66 1.70 $ 1.75 $ 1.79 $ 1.84 $ 1.89 $ 1.94 $ 1.99 $ 2.04 $ 2.10 NET OPERA TING INCOME (ex. depr., interest & tax) 5.55 S.60 5.77 S.95 6.14 6.33 6.52 6.72 6.93 7.15 7.37 7.60 Source: Economics Research Associates CJ c=i c=J c=J c=i CJ CJ CJ CJ c::J CJ CJ CJ c=J c:=J CJ CJ CJ CJ Table 3.A. 10 CARLSBAD BOULEY ARD REALIGNI\IENT-Alternative 3, Parcel 3, Land Use Scenario A (BEFORE TAXES & FINANCING) Full Service Hotel 2003 2004 2005 2006 2007 2008 2009 20IO 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value filu:..l ~ fiai:..J 1'.mc.A Yll.c..S fiar_6 Ynr..1 fill..8 Yll.r..2 Yili:..111 Ynr.J..l fu.c..ll Yll.r..1J Year.JA YilLlS Sources of Funds Expressed In Millions of US Dollars Expressed in Millions of US Dollars Net Operating Income 5.55 5.60 5.77 5.95 $ 6.14 $ 6.33 $ 6.52 $ 6.72 $ 6.93 $ 7.15 $ 7.37 $ 7.60 Reversion@ 10.0% 75.95 Less Cost of Sales @ 3.0% 2.28 Net Sales Proceeds $ $ $ $ $ $ $ $ 73.68 Total Sources of Funds 5.55 5.60 5.77 5.95 $ 6.14 $ 6.33 $ 6.52 $ 6.72 $ 6.93 $ 7.15 $ 7.37 $ 81.27 Development Costs Inflation Assumptions I 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I Number of Rooms 300 150 150 Development Costs -Annual % 0% 50% 50% 0% 0% 0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Development Costs per room -Hotel / 1 $ 125,000 20.49 21.10 Total Development Costs $ $ 20.49 $ 21.10 $ $ $ $ $ $ $ $ $ $ $ $ NET CASH FLOW (before financing & taxes) 20.49 21.10 5.55 5.60 5.77 5.95 6.14 6.33 6.52 6.72 6.93 7.15 7.37 81.27 Cumulative Cash Flow 20.49 41.59 36.04 30.44 24.67 18.72 12.58 6.25 0.27 6.99 13.93 21.07 28.44 I09.71 Net Present Value@ 14.0% $3.94 million 2003 dollars Notes: /I New development costs include direct costs, off-site & on-site costs, indirect costs, and developer profit. /2 Included in development cost per room Source: Economics Research Associates CJ CJ C=:J CJ CJ CJ C:J CJ CJ c:::J C:=J CJ c=J CJ CJ C=:J CJ CJ CJ Table 3.A.11 CARLSBAD BOULEY ARD REALIGNI\IENT -Alternatiw 3, Parcel 6A, Land Use Scenario A Time Share 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value Yiltl Ycar..l fiaL1 Yl:a.cA Ylll:..S ~ fiaL1 YurJl l'.il.t:..2 Ytar..1JI fiar..l1 Yntll YearJ.1 l'.e.ar..14 Ycar...15 Assumptions Inflation Factor 3% 1.06 1.09 1.13 1.16 I.I 9 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Real Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Time Share Room, 30 0 0 0 30 30 30 30 30 30 30 30 30 30 30 30 Total Number of Intervals Available 1,530 1,530 1,530 1,530 1,530 1,530 1,530 1.530 1,530 1,530 1,530 1,530 Total Numberoflntervals Sold Per Year 750 780 Cumulative Intervals Sold 750 1,530 1,530 1,530 1,530 1,530 1,530 1,530 1,530 1,530 1,530 1,530 Interval Sales Price $ 18,500 s 19,627 $20.215 $20,822 $21,447 $22,090 $22,753 $23,435 $24, I 38 $24,862 $25,608 $26,377 $27,168 $27,983 $28,822 $ 29,687 Sales Revrm1es Expressed in Millions of US Dollan Expressed In Millions of US Dollars Annual Sales Volume $ $ $ $ 16.08 $ 17.23 $ $ $ $ $ $ $ $ $ $ Cumulative Sales Volume 16.08 33.32 33.32 33.32 33.32 33.32 33.32 33.32 33.32 33.32 33.32 33.32 Cost of Sales Per Room Product Cost (excluding land cost) /I $ 205,000 6.92 Gross Profit Before Land Costs $ $ $ (6.92) $ 16.08 $ 17.23 $ $ $ $ $ $ $ $ $ $ Cumulative Profit Before Land Costs (6.92) 9.16 26.39 26.39 26.39 26.39 26.39 26.39 26.39 26.39 26.39 26.39 26.39 Costs & Expenses/2 As % of Annual Gross Sales Commissions 22.0% $ $ $ $ 3.54 $ 3.79 $ $ $ $ $ $ $ $ $ $ Marketing 22.0% 3.54 3.79 Sales Overhead 5.0% 0.80 0.86 Administration 7.0% 1.13 1.21 Acct./Legal/Counsulting 0.5% 0.08 0.09 Depreciation 0.3% 0.05 0.05 Other 0.1% 0.02 0.02 Total Cost & Expenses(% of Annual Gross Sales) 56.9% $ $ $ $ 9.15 $ 9.80 $ $ $ $ $ $ $ $ $ $ Net Development erofit (l,oss) 43% $ $ $ (6.92) $ 6.93 $ 7.43 $ $ $ $ $ $ $ $ $ $ Cumulative Cash Flow $ $ $ (6.92) $ 0.01 $ 7.44 $ 7.44 $ 7.44 $ 7.44 $ 7.44 $ 7.44 $ 7.44 $ 7.44 $ 7.44 $ 7.44 $ 7.44 Net Present Value@ 15.0% $3.10 million 2003 dollars Notes: /I Development costs include allocated share of onsite/offsite costs. /2 Selling and marking expenses only. Operating expenses are covered I 00% by annual fees. Source: RCI Consulting, Inc.~ and Economics Research Associates CJ CJ c::J CJ CJ CJ CJ Table 3.A.12 CARLSBAD BOULEVARD REALIGNI\IENT-Alternath·e 3, Parcel 6B, Land Use Scenario A Office Operating Statement Inflation Factor Rental Escalation (>ffin· rnwl c;L\ Average Annual Occupancy Rate Occupied Space New Yr.2001 Va~ 3% 0% 15,000 15,000 2003 2004 l:'.llL1 1'.<ar.l 1.06 1.09 1.00 1.00 0% 0% c:J 2005 2006 'l:'.<.ac.J i:.au 1.13 I. 16 1.00 1.00 15,000 15,000 0% 80% 12,000 Average NNN Rent Per s.f.. Per Year 22.80 S 24. I 9 $ 24.91 $ 25.66 $ 26.43 CJ CJ 2007 2008 2009 l'.<ar..S l'<.ar.Ji l'.J:&r.1 I 19 1.23 1.27 1.00 1.00 1.00 15,000 15.000 15,000 15,000 15,000 15,000 95% 95% 95% 14,250 14,250 14,250 CJ 2010 l:'.<ar..8 1.30 1.00 15,000 15,000 95% 14,250 c=J 2011 l::Hr..2 1.34 1.00 15,000 15,000 95% 14,250 2012 l:'.uLlll 1.38 1.00 15,000 15,000 95% 14,250 27.22 $ 28.04 28.88 $ 29.75 $ 30.64 31.56 Expressed In Millions of US Dollars Gron Revenues f)perating Expenses Administrative & General Sales & Marketing Total NET OPERATING INCOME (ex. depr., Interest & tax) Notes: s % of Rev. 4.0% 2.0% 6.0% S $ s s 0.32 $ 0.39 s 0.01 0.02 0.01 0.01 0.o2 $ 0.02 s 0.30 s 0.36 s 0.40 s 0.41 s 0.42 s 0.44 s 0.45 0.02 0.02 0.02 0.02 0.02 0.QI 0.01 0,01 0.01 0.QI 0.02 s 0.02 s 0.o3 s 0.03 s 0.03 0,38 s 0.39 s 0.40 s 0,41 s 0.42 CJ 2013 harJ1 1.43 1.00 15,000 15,000 95% 14,250 $ 32.51 CJ 2014 l.'.l:aLll 1.47 1.00 15 000 15,000 95% 14,250 $ 33.48 2015 1'.<arJJ 1.51 1.00 15 000 15,000 95%1 14,250 $ 34.49 C=1 2016 fiaJ:..H 1.56 1.00 15,000 15,000 95% 14,250 $ 35.52 Expressed In MIiiions of US Dollan $ 0.46 s 0.48 s 0.49 s 0.51 0.02 0.02 0.02 0.02 0.01 0.01 0.01 0.01 $ 0.03 $ 0.03 s 0.03 $ 0.03 s 0.44 s 0.45 s 0.46 s 0.48 /I Triple-net rent where tenant pays for pro-rata share of common area charges, insurance, property taxes, and utilities in addition to base rent. No rent for tenant improvements; tenants pay for improvements. Source: Economics Research Associates Tahlc 3.A.13 CARLSBAD BOULEVARD REALIGNMENT -Alternative 3, Parcel 68, Land Use Scenario A (BEFORE TAXES & FINANCING) Ofnce Operating Statement 2003 2004 2005 2006 2007 2008 Yr. 2001 Value l:'.llL1 1'.<ar.l 'l:'.<.ac.J i:.au l'.<ar..S l'<.ar.Ji Sources or Funds Expressed In Millions of US Dollars Net Operating Income s s $ $ 0.30 s 0.36 s 0.38 Reversion@ 10.0% Less Cost of Sales@ 3.0% Net Sale Proceeds s $ $ s s $ Total Sources of Funds s s s s 0.30 s 0.36 s 0.38 Development Costs Inflation Assumptions 1.06 1.09 1.13 1.16 I. 19 1.23 Gross Leasablc Area New 15,000 15,000 15,000 15,000 Development Costs Annual % New 0% 0% 100% 0% New Development Costs $ 101.44 per sf $ $ $ 1.71 Total Development Costs s s s 1.71 NET CASH FLOW (before financing & tu:es) 1.71 0.30 0.36 0.38 CUMULATIVE CASH FLOW 1.71 1.41 1.05 0.67 Residual Land Value= Net Present Value_@ 14.0% Sl.01 million 2003 dollars Notes: /I New development costs include direct costs, indirect costs. and developer profit. Source: Economics Research Associates 2009 2010 2011 2012 2013 2014 2015 2016 l'.J:&r.1 l:'.<ar..8 l::Hr..2 l:'.uLlll harJ1 l.'.l:aLll 1'.<arJJ fiaJ:..H Expressed In Millions of US Dollars s 0.39 s 0.40 s 0.41 $ 0.42 s 0.44 s 0.45 s 0.46 $ 0.48 s s s $ s s $ s s 0.39 s 0.40 $ 0.41 $ 0.42 $ 0.44 s 0.45 s 0.46 $ 0.48 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 0.39 0,40 0.41 0.42 0.44 0.45 0.46 0.48 0.29 0.11 0.52 0,94 1.38 1.83 2.29 2.77 c::J 2017 :l'.faL1!i 1.60 1.00 15,000 15,000 95~/4, 14,250 $ 36.59 $ 0.52 0.02 0.01 s 0.o3 s 0.49 2017 :l'.faL1!i s 0.49 4.90 0.15 $ 4.75 s 5.24 1.60 15,000 5.24 8.01 CJ CJ CJ CJ CJ C=:J CJ C:Cl c=J CJ CJ c=J Table 4.A. I CARLSBAD BOULEVARD REALIGNMENT-Alternative 4, Parcel I, Land Use Scenario A PROFORMA CASH FLOW -PRELIMINARY RESIDUAL LAND VALUE (BEFORE TAXES & FINANCING) 2003 2004 2005 Yr. 2001 full 1nc..2 Yl:a.c..J Inflation Factor 3% Value I 1.06 1.09 1.13 SOURCES AND USES OF FUNDS Net Sources of Funds By Land Use Executive Mtg. Hotel Net Cash Flow (I 1.06) (11.40) Commercial Retail Cash Flow (3.32) (3.42) Time Share (17.30) 2006 Yw:.A 1.16 2.82 1.96 9.24 CJ c:=J 2007 2008 Ynt..5 Tou:.1i 1.19 1.23 2.84 2.93 2.40 2.47 9.52 (9.10) CJ CJ CJ CJ CJ c=J C=:J 02-Oct-0I 2009 2010 2011 2012 2013 2014 2015 2016 2017 YfJU:..1 filll:..ll Yw:...2 Y.ear...l!I fiaLll fuL12 fiaI:..ll Ytar...14 Yfar...15 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I 3.02 3.12 3.21 3.31 3.42 3.52 3.63 3.74 41.27 2.55 2.62 2.70 2.78 2.86 2.95 3.04 3.13 34.18 IO.IO 10.40 10.72 11.04 7.39 Sub-total $ $ (14.38) $ (32.12) $ 14.02 $ 14.76 $ (3.70) $ 15.67 $ 16.14 $ 16.63 $ 17.13 $ 13.67 $ 6.47 $ 6.67 $ 6.87 $ 75.45 Net Cash Flow After Developer Costs Is I s i14.4ll s !32.111 s 14.o Is 14.81 s p.7)1 $ 15.71 s 16.1 Is 16.61 s 11.1 Is 13.71 s 6.5 Is 6.71 $ 6.91 $ 75.5 I ~et fteseot Yalue After DeYeloper Costs Net Present Value@_ 14.0% $20.65 million 2003 dollars CJ CJ CJ C.:J c=J CJ C=:J c=i c::::J Table 4.A.2 CARLSBAD BOULEVARD REALIGNMENT -Alternative 4, Parcel I, Land Use Scenario A FISCAL REVENUES 2003 2004 fiatl Tou:..2 Inflation Factor 3% I 1.06 1.09 PROPERTY TAXES LandJ.lKs Executive Mtg. Hotel $ $ Commercial Retail $ $ Time Share $ $ Total Property Tax Increment $ $ City's Share 4.75% of Property Taxes $ $ RDA's Non-housing Share 60.00% of Property Taxes $ $ TRANSIENT OCCUPANCY TAXES Executive Mtg. Hotel $ $ Transient Occupancy Tax @ 10.00% of Room Revenue $ $ Gross Fiscal Operating Income From TOT & TI s $ SALES TAX REVENUE Retail Commercial $ $ Food & Beverage & 50% of Other Hotel Revenues $ $ Total Sales Tax Revenue $ $ TOTAL FISCAL REVENUE Property Tax Revenue $ $ Transient Occupancy Tax Revenue $ $ Sales Tax Revenue $ $ Total Fiscal Revenue Available for Fiscal Operating Costs $ $ SDU[Ci!S o[ Euods FISCAL OPERATING INCOME $ $ Reversion@ 7% $ $ Total Sources of Funds $ $ NET CASH FLOW Is Is Net Present Value@ 10% $17.43 million 2003 dollars Source: Economics Research Associates CJ CJ 2005 2006 Yl:lu:..J Tou:.A 1.13 1.16 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 5.57 $ $ $ 0.56 $ $ $ 0.56 $ $ $ 0.26 $ $ $ 0.03 $ $ $ 0.29 $ $ $ $ $ $ 0.56 $ $ $ 0.29 $ $ $ 0.85 $ $ $ 0.85 $ $ $ $ $ $ 0.85 $ Is Is 0.85 rs c=i CJ CJ C=:J C-=:J CJ CJ CJ CJ 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 l'.elll:...5 Yw:Ji 1'.w:..1 ~ Yl:a.r:..2 fiatlll ~ lnr..ll fiar...lJ Yll.r..14 YeaL1.5 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I Expressed In Millions of US Dollars 0.28 $ 0.28 $ 0.29 $ 0.30 $ 0.30 $ 0.31 $ 0.31 $ 0.32 $ 0.33 $ 0.33 $ 0.34 0.23 $ 0.24 $ 0.24 $ 0.25 $ 0.25 $ 0.26 $ 0.26 $ 0.27 $ 0.27 $ 0.28 $ 0.28 0.11 $ 0.22 $ 0.34 $ 0.46 $ 0.59 $ 0.73 $ 0.87 $ 0.97 $ 0.99 $ 1.01 $ 1.03 0.62 $ 0.74 $ 0.87 $ 1.00 $ 1.15 $ 1.29 $ 1.45 $ 1.56 $ 1.59 $ 1.62 $ 1.66 0.03 $ 0.04 $ 0.04 $ 0.05 $ 0.05 $ 0.06 $ O.Q7 $ 0.07 $ 0.08 $ 0.08 $ 0.08 0.37 $ 0.44 $ 0.52 $ 0.60 $ 0.69 $ 0.78 $ 0.87 $ 0.94 $ 0.96 $ 0.97 $ 0.99 Expressed In Millions of US Dollars 6.18 $ 6.36 $ 6.55 $ 6.75 $ 6.95 $ 7.16 $ 7.38 $ 7.60 $ 7.83 $ 8.06 $ 8.30 0.62 $ 0.64 $ 0.66 $ 0.68 $ 0.70 $ 0.72 $ 0.74 $ 0.76 $ 0.78 $ 0.81 $ 0.83 1.02 s 1.12 $ 1.22 $ 1.33 $ 1.44 $ 1.55 $ 1.67 $ 1.77 $ 1.81 $ 1.86 $ 1.90 0.32 $ 0.33 $ 0.34 $ 0.35 $ 0.36 $ 0.37 $ 0.38 $ 0.39 $ 0.40 $ 0.42 $ 0.43 0.03 $ 0.03 $ 0.03 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 0.04 0.35 $ 0.36 $ 0.37 $ 0.38 $ 0.40 $ 0.41 $ 0.42 $ 0.43 $ 0.45 $ 0.46 $ 0.47 0.40 $ 0.48 $ 0.56 $ 0.65 $ 0.74 $ 0.84 $ 0.94 $ 1.01 $ 1.03 $ 1.05 $ 1.07 0.62 $ 0.64 $ 0.66 $ 0.68 $ 0.70 $ 0.72 $ 0.74 $ 0.76 $ 0.78 $ 0.81 $ 0.83 0.35 $ 0.36 $ 0.37 $ 0.38 $ 0.40 $ 0.41 $ 0.42 $ 0.43 $ 0.45 $ 0.46 $ 0.47 1.37 $ 1.48 $ 1.59 $ 1.71 $ 1.83 $ 1.96 $ 2.09 $ 2.20 $ 2.26 $ 2.32 $ 2.38 1.37 $ 1.48 $ 1.59 $ 1.71 $ 1.83 $ 1.96 $ 2.09 $ 2.20 $ 2.26 $ 2.32 $ 2.38 $ $ $ $ $ $ $ $ $ $ 36.54 1.37 $ 1.48 $ 1.59 $ 1.71 $ 1.83 $ 1.96 $ 2.09 $ 2.20 $ 2.26 $ 2.32 $ 38.92 1.37!S 1.481 $ 1.59 ! $ 1.11 I s 1.83 I s t.96 I s 2.09 ! $ 2.20 I s 2.26 Is 2.32 I s 38.92 I C=:J CJ CJ CJ CJ CJ c=J c=J c:=i c=J c=i CJ c::=J CJ CJ CJ CJ CJ CJ Table 4.A.3 CARLSBAD BOULEVARD REALIGNMENT-Alternative 4, Parcell, Land Use Scenario A Executive Meeting Hotel Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value Yfai:.l .Ynr..l l'.nr...1 l'.l:aJ:A Tou:..S Yllti fuL1 l'.w:JI Yw:...2 Ynr...lJI fuJ:..ll .Yl:ar...ll Y.w:J.J .Ytar...1.4 fur..l.S Assumptions Inflation Factor 3% 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Real Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 llottl Rooms 150 0 0 0 150 150 150 150 150 150 150 150 150 150 150 150 Total Potential Number of Room nights 54,750 54,750 54,750 54,750 54,750 54,750 54.750 54,750 54,750 54,750 54,750 54,750 Average Annual Occupancy Rate 0.0% 0.0% 0.0% 65.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% Avg. Daily Rm. Rate Hotel 2 /1 $ 135 143 148 152 157 161 166 171 176 I 81 187 192 198 204 210 217 Operating Revenues Expressed in Millions of US Dollars Expressed in Millions of US Dollars Room Revenues $ $ $ $ 5.57 $ 6.18 $ 6.36 $ 6.55 $ 6.75 $ 6.95 $ 7.16 $ 7.38 $ 7.60 $ 7.83 $ 8.06 $ 8.30 As % of Room Revenues Food & Beverage 45% 2.51 2.78 2.86 2.95 3.04 3.13 3.22 3.32 3.42 3.52 3.63 3.74 Other Revenues 15% 0.84 0.93 0.95 0.98 I.OJ 1.04 1.07 1.11 1.14 1.17 1.21 1.25 Subtotal (Non-Room Revenues) 60% $ $ $ $ 3.34 $ 3.71 $ 3.82 $ 3.93 $ 4.05 $ 4.17 $ 4.30 $ 4.43 $ 4.56 $ 4.70 $ 4.84 $ 4.98 Gross Revenues $ $ $ $ 8.91 $ 9.88 $ 10.18 $ 10.49 $ 10.80 $ 11.13 $ 11.46 $ 11.80 $ 12.16 $ 12.52 $ 12.90 $ 13.28 Depactmental Costs & Expenses As % of Departmental Revenues Rooms 25% 1.39 1.54 1.59 1.64 1.69 1.74 1.79 1.84 1.90 1.96 2.02 2.08 Food & Beverage 75% 1.88 2.09 2.15 2.21 2.28 2.35 2.42 2.49 2.56 2.64 2.72 2.80 Other Departments 50% 0.42 0.46 0.48 0.49 0.51 0.52 0.54 0.55 0.57 0.59 0.60 0.62 Total Departmental Expenses(% of Gross Revenues) 41% $ $ $ $ 3.69 $ 4.09 $ 4.22 $ 4.34 $ 4.47 $ 4.61 $ 4.74 $ 4.89 $ 5.03 $ 5.18 $ 5.34 $ 5.50 Gross Operating Revenues 59% $ $ $ $ 5.22 $ 5.79 $ 5.97 $ 6.14 $ 6.33 $ 6.52 $ 6.71 $ 6.92 $ 7.12 $ 7.34 $ 7.56 $ 7.78 Notes: /I Rate, after discounts, per occupied room. Source: Economics Research Associates CJ c=i c:::J CJ CJ CJ c=J CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ Table 4.A.4 CARLSBAD BOULEVARD REALIGNMENT-Alternative 4, Parcel I, Land Use Scenario A Executive Meeting Hotel Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value Ytar..l Ycar..l ~ filu:..4 l:'.ll.c..5 Tole.Ji Yill:.1 fia.rJI Year..2 Yllr.J.Jl l'.il.c..11 1'.elU:..ll Yn.r..13. Ytar...14 Yur...lS Expressed in Millions of US Dollars Expressed in Millions of US Dollars Gross Operating Revenues 5.97 6.14 6.33 6.52 6.71 6.92 7.12 7.34 7.56 7.78 llodistributed Openting Expenses As % of Revenue Administrative & General 5.0% $ $ $ $ 0.45 $ 0.49 $ 0.51 $ 0.52 $ 0.54 $ 0.56 $ 0.57 $ 0.59 $ 0.61 $ 0.63 $ 0.64 $ 0.66 Management Fee 2.0% 0.18 0.20 0.20 0.21 0.22 0.22 0.23 0.24 0.24 0.25 0.26 0.27 Sales & Marketing 5.0% 0.45 0.49 0.51 0.52 0.54 0.56 0.57 0.59 0.61 0.63 0.64 0.66 Energy Costs 6.0% 0.53 0.59 0.61 0.63 0.65 0.67 0.69 0.71 0.73 0.75 0.77 0.80 Repairs & Maintenance 4.0% 0.36 0.40 0.41 0.42 0.43 0.45 0.46 0.47 0.49 0.50 0.52 0.53 Total 22.0% $ $ $ $ 1.96 $ 2.17 $ 2.24 $ 2.3 I $ 2.38 $ 2.45 $ 2.52 $ 2.60 $ 2.67 $ 2.75 $ 2.84 $ 2.92 Gross Operating Profit 36.6% $ $ $ $ 3.26 $ 3.62 $ 3.73 $ 3.84 $ 3.95 $ 4.07 $ 4.19 $ 4.32 $ 4.45 $ 4.58 $ 4.72 $ 4.86 Eixed Expenses & Capital Costs Property Taxes fommla 0.28 0.28 0.29 0.30 0.30 0.31 0.31 0.32 0.33 0.33 0.34 Incentive Fee 2.0% 0.18 0.20 0.20 0.21 0.22 0.22 0.23 0.24 0.24 0.25 0.26 0.27 Insurance 1.0°/o 0.09 0.10 0.10 0.10 0.1 I 0.1 l O.! t 0.12 0.12 0.13 0.13 0.13 Capital Reserve 2.0% 0.18 0.20 0.20 0.21 0.22 0.22 0.23 0.24 0.24 0.25 0.26 0.27 Total 5.0% 0.45 0.78 0.79 0.81 $ 0.84 $ 0.86 $ 0.88 $ 0.90 $ 0.93 $ 0.95 $ 0.98 $ 1.00 NET OPERATING INCOME (ex. depr., interest & tax) 2.82 2.84 2.93 3.02 3.12 3.21 3.31 3.42 3.52 3.63 3.74 3.86 Source: Economics Research Associates c:=J CJ C:=J CJ CJ CJ CJ CJ c=J CJ CJ CJ CJ CJ c=J C=:J CJ CJ CJ Table 4.A.5 CARLSBAD BOULEVARD REALIGNMENT-Alternative 4, Parcel I, Land Use Scenario A (BEFORE TAXES & FINANCING) Hotel Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value Tolr..l l'ui:.l filu:..1 fill.A ~ filu:.11 Yilr.1 Yw:..8 Yw:..2 l:'.w:.lJI fiar..ll fu.r..12 Yea.t..lJ Tuu:.li Tou:.lS Sources of Funds Expressed in Millions or US Dollars Expressed in Millions or US Dollars Net Operating Income 2.82 2.84 2.93 3.02 $ 3.12 $ 3.21 $ 3.31 $ 3.42 $ 3.52 $ 3.63 $ 3.74 $ 3.86 Reversion@ 10.0% 38.57 Less Cost of Sales @ 3.0% 1.16 Net Sales Proceeds $ $ $ $ $ $ $ $ 37.42 Total Sources of Funds 2.82 2.84 2.93 3.02 $ 3.12 $ 3.21 $ 3.31 $ 3.42 $ 3.52 $ 3.63 $ 3.74 $ 41.27 Development Costs Inflation Assumptions I 1.06 1.09 1.13 1.16 1.19 1.23 J.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 I Number of Rooms 150 75 75 Development Costs -Annual % 0% 50% 50% 0% 0% 0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Development Costs per room -Hotel I I $ 135,000 I 1.06 11.40 Total Development Costs $ $ I 1.06 $ 11.40 $ $ $ $ $ $ $ $ $ $ $ $ NET CASH FLOW (before financing & taxes) 11.06 11.40 2.82 2.84 2.93 3,02 3.12 3.21 3.31 3.42 3.52 3.63 3.74 41.27 Cumulative Cash Flow 11.06 22.46) (19.64) (16.80) (13.87) (10,85) (7.73) (4.52) (1.20) 2.21 5.73 9.36 13.10 54.38 Net Present Value@ 14.0% Sl.04 million 2003 dollars Notes: /I New development costs include direct costs, off-site & on-site costs. indirect costs, and developer profit. Source: Economics Research Associates CJ C::J C=::J CJ CJ CJ CJ CJ CJ CJ C::=J CJ c=i CJ CJ C:J CJ CJ CJ Table 4.A.6 CARLSBAD BOULEVARD REALIGNMENT-Alternative 4, Parcel I, Land Use Scenario A Retail/Commercial: Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Tolr..l Yea.r..l Yw:...1 fillI:A 1'.l:aJ:..5 Yfar_fl Yw:..1 Yfar..8 .Yea.c...2 fiaLlll Yllr..l1 Yl:atl2. Year..13. Yl:ar...14 Ye.a.t..15 Inflation Factor 3% 1.06 1.09 1.13 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Rental Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Cumulative Gross Leasable Area Commercial Rdail 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45.000 45,000 45,000 45,000 45,000 Restaurants 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 Total 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 90,000 Occupancy Rate Commercial Retail 0% 0% 0% 80% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% R,·staurants 0% 0% 0% 80% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Average NNN Base Rent Per s.f. Per Yr/I US$ Commercial Retail $ 20.00 21.22 21.85 22.51 23.19 23.88 24.60 25.34 26.10 26.88 27.68 28.52 29.37 30.25 31.16 32.09 Restaurants $ 30.00 31.83 32.78 33.77 34.78 35.82 36.90 38.00 39.14 40.32 41.53 42.77 44.06 45.38 46.74 48.14 Average Gross Sales Per Square Foot Per Year US$ C'ommercial Retail $ 250.00 265 273 281 290 299 307 317 326 336 346 356 367 378 389 401 Restaurants $ 375.00 398 410 422 435 448 461 475 489 504 519 535 551 567 584 602 Expressed in Millions of US Dollars Expressed in Millions of US Dollars Operating Revenues Base Rent Revenue $ $ $ $ 2.09 $ 2.55 $ 2.63 $ 2.71 $ 2.79 $ 2.87 $ 2.96 $ 3.05 $ 3.14 $ 3.23 $ 3.33 $ 3.43 Gross Revenues $ $ $ $ 2.09 $ 2.55 $ 2.63 $ 2.71 $ 2.79 $ 2.87 $ 2.96 $ 3.05 $ 3.14 $ 3.23 $ 3.33 $ 3.43 Operating Expenses %of Rev. Administrative & General 4.0% $ $ $ $ 0.08 $ 0.10 $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.12 $ 0.12 $ 0.13 $ 0.13 $ 0.13 $ 0.14 Sales & Marketing 2.0% 0.04 0.05 0.05 0.05 0.06 0.06 0.06 0.06 0.06 0.06 O.o? 0.o7 Total 6.0% $ $ $ $ 0.13 $ 0.15 $ 0.16 $ 0.16 $ 0.17 $ 0.17 $ 0.18 $ 0.18 $ 0.19 $ 0.19 $ 0.20 $ 0.21 NET OPERATING INCOME (ex. depr., interest & tax) $ $ $ $ 1.96 $ 2.40 $ 2.47 $ 2.55 $ 2.62 $ 2.70 $ 2.78 $ 2.86 $ 2.95 $ 3.04 $ 3.13 $ 3.22 Notes: / I Triple-net rent where tenant pays for pro-rata share of common area charges, insurance, property taxes, and utilities in addition to base rent. No rent for tenant improvements; tenants pay for improvements. Source: Economics Research Associates CJ CJ CJ CJ CJ CJ CJ CJ CJ CJ ~ CJ CJ CJ C::J C=:J CJ CJ c:::J Table 4.A.7 CARLSBAD BOULEVARD REALIGNMENT -Alternative 4, Parcel I, Land Use Scenario A Retail/Commercial: Operating Statement 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yflu:..1 Yilt..2 fillLJ. Tou:A l:'.l:a.r...S fu.r...6 YeaJ:..1 Yw:..l! fiaL2 Ymr...l.11 fur..11. YfllL1l fuLl.3. Ye.ar...1.4 Yw:..15 Sources of Euods Expressed in Millions of US Dollars Expressed in Millions of US Dollars Net Operating Income $ $ $ $ 1.96 $ 2.40 $ 2.47 $ 2.55 $ 2.62 $ 2.70 $ 2.78 $ 2.86 $ 2.95 $ 3.04 $ 3.13 $ 3.22 Reversion@ 10.0% $32.24 Less Cost of Sales @ 4.0% $ 1.29 Net Sale Proceeds $ $ $ $ $ $ $ $ $ $ $ $ $ $ -$30.95 Total Sources of Funds $ $ $ $ 1.96 $ 2.40 $ 2.47 $ 2.55 $ 2.62 $ 2.70 $ 2.78 $ 2,86 $ 2.95 $ 3.04 $ 3.13 $34.18 lknlopmeot Costs Gross Leasable Area (s.f.) 90,000 45,000 45,000 Inflation Assumptions I l.06 l.09 1.13 l.!6 l. l 9 1.23 1.27 l.30 l.34 l.38 l .43 l .47 l.51 l.56 1.60 I Commercial Retail 0.0% 50.0% 50.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Restaurants 0.0% 50.0% 50.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% New Development Costs/2 $ 135.00 per sf $ $ 3.32 $ 3.42 $ $ $ $ $ $ $ $ $ $ $ -$ Total Development Costs 3.32 3.42 NET CASH FLOW (before financing & taxes) 3.32 2.40 2.47 2.55 2.62 2.70 2.78 2.86 2.95 3.04 3.13 34.18 CU MULA TrVE CASH FLOW (3.32 2.38) 0.09 2.64 5.26 7.96 10.74 13.61 16.56 19.60 22.73 56.90 Residual Land Value~ Net Present Value@ 14.0% $9.32 million 2003 dollars Notes: /! New development costs, include direct costs, indirect costs, and developer profit. Source: Economics Research Associates CJ CJ CJ CJ CJ CJ CJ c:J c:::J c:::J CJ c:J c:J CJ c:J c:=i c:::=J CJ ~ Table 4.A.8 CARLSBAD BOULEVARD REALIGNMENT-Alternative 4, Parcel l, Land Use Scenario A Time Share 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yr. 2001 Value fiar...1 Yw:..2 YcaL1 Yil.cA fia.c..S Tou:Ji TolL1 fia.t..8 Yfa.t..2 Yl:aLl.O fu.r..11 fiar...l2 Yea.c.lJ Yea.t..M fiar..15 Assumptions Inflation Factor 3% 1.06 1.09 I.I 3 1.16 1.19 1.23 1.27 1.30 1.34 1.38 1.43 1.47 1.51 1.56 1.60 Real Escalation 0% 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Timt' Share (;\'urnhcr or Rooms) 150 0 0 0 75 75 75 150 150 150 150 150 150 150 150 150 Total Number of Intervals Available 3,825 3,825 3,825 7,650 7,650 7,650 7,650 7,650 7,650 7,650 7,650 7,650 Total Number oflntervals Sold Per Year 1,000 1,000 1,000 1,000 1,000 1,000 1,000 650 Cumulative Intervals Sold 1,000 2,000 3,000 4,000 5,000 6,000 7,000 7,650 7,650 7,650 7,650 7,650 Interval Sales Price $ 18,500 $ 19,627 $20,215 $20,822 $21,447 $22,090 $22,753 $23,435 $24,138 $24,862 $25,608 $26,377 $27,168 $27,983 $28,822 $ 29,687 Sales Revenues Expressed in Millions of US Dollars Expressed in Millions of US Dollars Annual Sales Volume $ $ $ $ 21.45 $ 22.09 $ 22.75 $ 23.44 $ 24.14 $ 24.86 $ 25.61 $ 17.14 $ $ $ Cumulative Sales Volume 21.45 43.54 66.29 89.72 113.86 138.73 164.33 181.48 181.48 181.48 181 .48 181.48 Cost of Sales Per Room Product Cost (excluding land cost) /I $ 205,000 17.30 18.91 Gross Profit Before Land Costs $ $ $ (17.30) $ 21.45 $ 22.09 $ 3.84 $ 23.44 $ 24.14 $ 24.86 $ 25.61 $ 17.14 $ $ $ $ Cumulative Profit Before Land Costs (17.30) 4.14 26.23 30.08 53.51 77.65 102.51 128.12 145.26 145.26 145.26 145.26 145.26 Costs & Expenses/2 As % of Annual Gross Sales Commissions 22.0% $ $ $ $ 4.72 $ 4.86 $ 5.01 $ 5.16 $ 5.31 $ 5.47 $ 5.63 $ 3.77 $ $ $ $ Marketing 22.0% 4.72 4.86 5.01 5.16 5.31 5.47 5.63 3.77 Sales Overhead 5.0% 1.07 1.10 1.14 1.17 1.21 1.24 1.28 0.86 Administration 7.0% 1.50 1.55 1.59 1.64 1.69 1.74 1.79 1.20 Acct./Legal/Counsulting 0,5% 0.11 0.11 0.11 0.12 0.12 0.12 0.13 0.09 Depreciation 0.3% 0.06 0.07 0.07 0.07 0.07 0.07 0.08 0.05 Other 0.1% 0.02 0,02 0.02 0.02 0.02 0.02 0.03 0.02 Total Cost & Expenses(% of Annual Gross Sales) 56.9% $ $ $ $ 12.20 $ 12.57 $ 12.95 $ 13.33 $ 13.73 $ 14.15 $ 14.57 $ 9.76 $ $ $ $ ~et Deu:lopmeot frofit (I.ass) 43% $ $ $(17.30) $ 9.24 $ 9.52 $ (9.10) $ 10.10 $ 10.40 $ 10.72 $ I 1.04 $ 7.39 $ $ $ $ Cumulative Cash Flow $ $ $ ( I 7.30) $ (8.06) $ 1.46 $ (7.64) $ 2.46 $ 12.86 $ 23.58 $ 34.61 $ 42.00 $ 42.00 $ 42.00 $ 42.00 $ 42.00 Net Present Value @ 15.0% $9.27 million 2003 dollars Notes: / I Development costs include allocated share of onsite/offsite costs. /2 Selling and marking expenses only. Operating expenses are covered 100% by annual fees. Source: RCI Consulting, Inc.; and Economics Research Associates