According to the Franklin County Auditor s website, current real estate taxes for the site total $6, Of this amount:

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1 March 3, 2015 Mr. Kyle Kegg Concierge Real Estate & Investments Company, LLC 1192 Grandview Avenue Columbus, Ohio Mr. Kegg, We have completed our analysis of the economic impact of a 6 unit condominium project at 1192 Grandview Avenue (subject site), in Grandview Heights, Ohio. The proposed project is expected to include 6 condominium units with attached two-car garages within two three-story buildings. The proposed project is expected to include 18,100 total square feet. Three of the units will include 2,500 square feet and 3 units will include 2,700 square feet. The project will also include approximately 2,500 square feet of common space. Following is our findings. Existing Building Based on information provided on the Franklin County Auditor s website, the existing building at 1192 Grandview Avenue was built in 1904 and includes 2,055 square feet. The lot has 50 feet of frontage on Grandview Avenue and 158 feet of frontage on 1 st Avenue. Overall, the lot includes 7,900 square feet (50 x 158). According to the Franklin County Auditor s website, current real estate taxes for the site total $6, Of this amount: $5, is allocated to Grandview Heights. $4, for Grandview Schools. $ to the City of Grandview Heights. $ to the Grandview Library. Existing Businesses Based on information provided to Danter Company, LLC, the existing building at 1192 Grandview Avenue houses 2 businesses, Concierge Real Estate and Kaag Financial, LLC. Concierge Real Estate employs 2 realtors that operate as subcontractors. Kaag Financial has 4 employees. 1

2 The salary estimates for both businesses are: Concierge Real Estate (2 subcontract employees) - range from $30,000 to $50,000 per year for each subcontractor, depending on commissions. Kaag Financial (4 employees) range from $50,000 to $80,000 for 3 of the employees and $100,000 for the 4 th employee. Overall, the 2 businesses located at 1192 Grandview Avenue include 6 employees and have an estimated payroll of $310,000 to $420,000 per year. Following is a summary of the economic impact of the estimated payroll for the 2 business at the site: GRANDVIEW HEIGHTS SALARY ESTIMATE INCOME TAX REVENUE* BUSINESS EMPLOYEES LOW ESTIMATE HIGH ESTIMATE LOW ESTIMATE HIGH ESTIMATE AVERAGE CONCIERGE 2 $60,000 $100,000 $1,500 $2,500 $2,000 REAL ESTATE KAAG 4 $250,000 $320,000 $6,250 $8,000 $7,125 FINANCIAL TOTAL 6 $310,000 $420,000 $7,750 $10,500 $9,125 *Based on 2.5% Grandview Heights City Income Tax Rate Based on the salary estimates from the 2 businesses at the subject site, the estimated yearly income tax generated for the city of Grandview Heights ranges from $7,750 to $10,500 per year. The average annual income tax generated is $9,125 per year. The total tax impact of the existing building at 1192 Grandview Avenue is as follows: TAX TYPE TOTAL TAX TAX ALLOCATED TO GRANDVIEW REAL ESTATE TAX $6,584 $5,421 AVERAGE ESTIMATED $9,125 $9,125 INCOME TAX TOTAL $15,709 $14,546 Overall, the total tax (real estate tax and average estimated income tax) allocated to the City of Grandview Heights from the existing building at 1192 Grandview Avenue is estimated at $14,546 per year. 2

3 Economic Impact of Construction The subject site is expected to include 6 condominium units with attached garages within 2 three story buildings. Overall, the estimated cost to develop the site is expected to be $3.5 million. Based on economic impact ratios, the $3.5 million project is expected to have a short term economic benefit of approximately 75 temporary jobs and is expected to generate taxable income of over $270,000. This is based on 75 temporary jobs, with an average hourly rate of $18 per hour for 25 days. With a city income tax rate of 2.5%, the payroll income tax generated on $270,000 is $6,750. This number accounts for only the wages paid by contractors and subcontractors for labor and does not include profit or overhead that is factored into bids for work. In addition to the income tax generated by construction and trade workers at the site, the proposed project is anticipated to generate over $6,000 in permits and fees for the project. Another short term economic benefit of the proposed project will be the amount of money spent in Grandview by the estimated 75 construction and trade workers. This would include coffee and breakfast, lunch, or dinner at a Grandview coffee shop or restaurant, gas or other items purchased at a Grandview gas station or convenience store, and other incidentals. The developer of the proposed project has indicated that he would utilize local businesses and suppliers when possible. Based on conservative estimates, if only 10% of the project utilized Grandview businesses, this would generate $350,000 in revenue to Grandview businesses. If 25% of the proposed project utilized Grandview businesses, this would generate $875,000 in revenue to Grandview businesses. Real Estate Tax Analysis Based on information from the Franklin County Auditor s website, the annual real estate tax on the existing building at the site is $6,584 per year, of which, $5,421 is allocated to the Grandview School District, the City of Grandview, and the Grandview Library. After the development of 6 condominium units at the site, and assuming an average sales price of $750,000 for each unit as well as a market value of $750,000, the estimated annual real estate tax on the 6 new condominium units (2014 tax rates) would total an estimated $108,760. This is based on a market-value of $750,000 and a taxable value of $262,500 per unit. 3

4 We also identified 12 homes in the City of Grandview with taxable values between $239,200 and $299,500 and determined ratios of tax to taxable value to confirm the estimated amount of tax. Of the estimated total $108,760 in real estate tax at the newly developed site, $83,641 would be allocated to the Grandview School District, the City of Grandview, and the Grandview Library. Following is a summary of the estimated annual taxes for the existing building at the site: RESIDENTIAL UNITS ANNUAL TAXES CITY OF GRANDVIEW TOTAL ALLOCATION OF TAXES CITY OF GRANDVIEW GRANDVIEW LIBRARY SCHOOL DISTRICT GRANDVIEW TOTAL CURRENT 0 $6,584 $4,491 $639 $291 $5,421 BUILDING PROPOSED 6 $108,760 $64,642 $13,159 $5,840 $83,641 BUILDING NET GAIN 6 $102,176 $60,151 $12,520 $5,549 $78,220 As the real estate tax distribution illustrates, the current building generates $5,421 of total Tax Revenue per year for the Grandview School District, City of Grandview, and the Grandview Library. After development, it is anticipated that the 6 new condominium units would generate an estimated $83,641 in tax revenue. This equates to an increase in tax revenue to the Grandview School District, the City of Grandview, and the Grandview Library of $78,220 per year. Following is a summary of the estimated total tax and the estimated tax per unit: ALLOCATION OF TAXES NET ANNUAL TAXES SCHOOL DISTRICT CITY OF GRANDVIEW GRANDVIEW LIBRARY ALL UNITS $108,760 $64,642 $13,159 $5,840 PER UNIT $18,127 $10,774 $2,193 $973 Income Tax Analysis The developer has indicated that the 6 units proposed to be built would have an average sales price of $750,000. We anticipate that the sales for most of the units at the project would be impacted by equity in an existing home, and that most purchasers 4

5 would require mortgages of 60% or less for their purchase. A mortgage of $450,000 would require a minimum gross income of approximately $140,000 per year. Based on an assumption that each of the households residents work in the City of Grandview, and assuming each household had income of at least $140,000 per year, the minimum total income tax liability to the City of Grandview for each unit would be $3,500 per year. The total for all 6 units would be at least $21,000 per year. In the event that the residents in all 6 households worked outside of the City of Grandview, and assuming each household had income of at least $140,000 per year, the minimum total income tax liability to the City of Grandview for each unit would be $350 per year. The total for all 6 units would be at least $2,100 per year. It is of note that income for any residents that are retired would be considered earned in Grandview and each retiree would be liable for Grandview income tax. Other Economic Impact In addition to the income tax and property tax revenue generated by the 6 proposed condominiums, the economic impact of the 6 new households at the proposed project should also be considered. A long term economic impact of 6 new high income households would be generated from goods and services supported by the new households. While we cannot estimate how much each household would spend in Grandview, we anticipate that the majority of the spendable income from residents would be for groceries and food and drink away from home. It is of note that the site is within walking distance to various restaurants, a coffee shop, and an ice cream shop, as well as other small businesses in the Grandview area. Various other restaurants, a new Giant Eagle Market Place, as well as small retail stores are within a short drive from the site. According to ESRI, Inc, a nationally recognized specialist in small area demographics, the average household in the City of Grandview spends approximately $11,486 per year on food at home, food away from home, alcoholic beverages, and apparel and services. All of these categories are well represented in the City of Grandview. When considering all 6 units at the site, this equates to an additional potential of $68,913 spent at Grandview businesses. Summary Following is a summary of the economic impact of a 6 unit condominium development being developed at the subject site: 5

6 Short term benefits include: The $3.5 million project is expected to have a short term economic benefit of approximately 75 temporary jobs and is expected to generate taxable income of over $270,000. With a city income tax rate of 2.5%, the income tax generated on $270,000 is $6,750. The proposed project is anticipated to generate over $6,000 in permits and fees for the project. Another short term economic benefit of the proposed project will be the amount of money spent in Grandview by the estimated 75 construction and trade workers. The developer of the proposed project has indicated that he would utilize local businesses and suppliers when possible. Long term benefits include: After the development of 6 condominium units at the site, and assuming an average sales price of $750,000 each as well as a market value of $750,000, the estimated annual real estate tax on the 6 new condominium units (2014 tax rates) would total $108,760. Of this total, $83,641 would be allocated to the Grandview School District, the City of Grandview, and the Grandview Library. This equates to an increase in tax revenue to the Grandview School District, the City of Grandview, and the Grandview Library of $80,364 per year. Based on an assumption that the each of the households residents work in the City of Grandview, and assuming each household had income of at least $140,000 per year, the minimum total income tax liability to the City of Grandview for each unit would be $3,500 per year. The total for all 6 units would be at least $21,000 per year. In the event that the residents in all 6 households worked outside of the City of Grandview, and assuming each household had income of at least $140,000 per year, the minimum total income tax liability to the City of Grandview for each unit would be $350 per year. The total for all 6 units would be at least $2,100 per year. A long term economic impact of 6 new high income households would be generated from goods and services supported by the new households. While we cannot estimate how much each household would spend in Grandview, we anticipate that the majority of the spendable income from residents would be for groceries and food and drink away from home. 6

7 According to ESRI, Inc, a nationally recognized specialist in small area demographics, the average household in the City of Grandview spends approximately $11,486 per year on food at home, food away from home, alcoholic beverages, and apparel and services. All of these categories are well represented in the City of Grandview. When considering all 6 units at the site, this equates to an additional potential of $68,913 spent at Grandview businesses. Following is a summary of the total economic impact the construction of 6 new, high end condominiums would have on the Grandview area: SUMMARY OF ESTIMATED EXISTING, SHORT AND LONG TERM ECONOMIC IMPACT OF CONDOMINIUM DEVELOPMENT AT THE SUBJECT SITE EXISTING IMPACT COMPONENT OF SITE AVERAGE INCOME TAX FROM $9,125 EXISTING BUSINESSES AT SITE CURRENT REAL ESTATE TAX $5,421 ALLOCATION TO GRANDVIEW PAYROLL TAX FOR CONSTRUCTION $6,750 WORKERS INCOME FROM PERMITS AND FEES $6,000 ESTIMATED ECONOMIC IMPACT $350,000 to FROM BUILDING SUPPLIES $875,000 PURCHASED FROM GRANDVIEW BUSINESSES ESITMATED ECONOMIC IMPACT FROM CONSTRUCTION WORKERS SPENDING MONEY IN GRANDVIEW EXPECTED REAL ESTATE TAX ALLOCATION AFTER CONSTRUCTION PER YEAR POTENTIAL INCOME TAX FROM RESIDENTS PER YEAR ECONOMIC IMPACT OF 6 NEW HIGH INCOME HOUSEHOLDS IN GRANDVIEW PER YEAR SHORT TERM ECONOMIC IMPACT ESTIMATED TOTAL $14,546 $362,750 to $887,750 N/M Not able to accurately measure economic impact N/M LONG TERM ECONOMIC IMPACT $83,641 $2,100 to $21,000 $68,913 +/- $154,654 to $173,554 7