Attachment 18. KMA Comparative General Fund

Transcription

1 Attachment 18 KMA Comparative General Fund Analysis, dated 8/1/018

2 -I ),. J KEYSER MARSTON ASSOCIATES. ADVISORS IN PUBLIC/PRIVATE REAL ESTATE DEVELOPMENT MEMORANDUM ADVISORS IN: Real Estate To: Masa Alkire, Principal Planner Redevelopment Affordable Housing City of Beverly Hills Economic Development Scisco A. Jerry Keyser Timothy C. Kelly Debbie M. Kern David Doezema From: Kathleen Head Date: August 1, 018 Los ANGELES Kathleen H. Head James A. Rabe Subject: Santa Monica Boulevard Comparative General Fund Analysis Gregory D. Soo-Hoo Kevin E. Engstrom Julie L. Romey At your request, Keyser Marston Associates, Inc. (KMA) reviewed the proposal SAN DIEGO Paul C. Marra submitted by 9908 Santa Monica Blvd., LLC (Developer) to develop a mixed-use project on the vacant 36,00 square foot property located at South Santa Monica Boulevard (Site). The Site is designated in the City of Beverly Hills (City) General Plan as Commercial Low Density General and it is zoned C-3A (Commercial). These designations allow for low- to high-intensity commercial uses, such as cafes, offices, and retail shops. The maximum allowable building height is 45 feet, and multi-family residential uses are not permitted. The purpose of the KMA analysis is to compare the General Fund revenues that could potentially be generated by a project that comports with the Site s existing zoning and General Plan designations to the development scope currently being proposed by the Developer. The City provided KMA with a scope of development for a Code Compliant Project. The analysis of the Proposed Project is based on the development plans submitted by the Developer on May 5, 018. The development scopes being analyzed in this memorandum are presented in the following table: 500 SOUTH GRAND AVENUE, SUITE 1480 p LOS ANGELES, CALIFORNIA PHONE ,BH:KHH

3 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page Code Proposed Compliant Project Project Building Height (Feet) Numberof Stories 5 3 Number of Residential Units 7 N/A Gross Square Feet of Office Space N/A 67,000 Gross Square Feet of Retail & Restaurant Space 13,036 5,000 Number of Subterranean Parking Spaces ANALYSIS ORGANIZATION General Fund Revenue Projections The comparative General Fund revenue analysis includes evaluations of the following revenue sources: 1. Property Tax revenue allocated to the City;. Property Tax In Lieu of Motor License Fee (MVILF) revenue allocated to the City; 3. Public Safety Pension Assessment revenue; 4. Documentary Transfer Fee revenue; 5. Sales Tax revenue allocated to the City; 6. Business Tax revenue; and 7. Other revenues, which consist of Licenses and Permits revenue and Fines and Penalties revenue. The following KMA analysis provides the following projections of the revenues that could potentially be generated by the two development scenarios: 1. The revenues generated in the first stabilized year presented in constant 018 dollars; BH:KHH

4 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 3. The revenues generated during a three-year development period followed by the first 10 years of operation; and 3. The revenues generated during the development period followed by the first 0 years of operation. The projected revenues are presented in nominal dollars and in net present value terms. The discount rate used to arrive at the net present values is 6%. Comparison to the Fiscal Analysis Submitted by the Developer The Developer engaged HR&A Advisors, Inc. (HR&A) to prepare a comparative fiscal impact analysis for the Proposed Project and the Code Compliant Project. KMA reviewed the memorandum submitted by HF&A on April 5, 018, and compared their General Fund revenue projections to the projections applied in this KMA analysis. EXECUTIVE SUMMARY KMA Analysis The General Fund revenue projections prepared by KMA are summarized in the following table: Code Proposed Compliant Project Project Difference Stabilized Revenues (018 $) $554,500 $60,100 ($65,600) Years 1 10 Total Revenue $7,75,000 $7,875,000 ($13,000) Net Present Value $4,818,000 $4,906,000 ($88,000) Years 1 0 Total Revenue $0,43,000 $18,01,000 $,411,000 Net Present Value $9,07,000 $8,469,000 $603, BH:KHH

5 Masa Alkire, City of Beverly Hills Santa Monica Blvd. Comparative General Fund Analysis August 1, 018 Page 4 As can be seen in Compliant Project the preceding table, is in the first stabilized year projected to generate $65,600 mote General of operation, the Code Fund revenue than the Proposed Project. However, over time the advantage shifts to the Proposed Project. When the projected revenues are analyzed over is projected to generate significantly more General Compliant Project. 1. KMA This is a 0 year period, the Proposed Project Fund attributable to the following factors: projected that the condominium units will revenue than the be resold on Code average once every seven years. Comparatively, the commercial uses are projected to be resold on average once every a. Based 10 years. This on data pertaining to historical have escalated at an average rate impacts the projections of commercial value increases have been time a property The is sold, property purposes; is Beverly Hills approximately in the range in the following ways: home sales, prices 7% of 5% per year. The per year. the following revenue sources are impacted: Each reassessed at the new sales price for Property Tax ii. iii. iv. The allocation of MVILF funds is adjusted to reflect the project s share of the total assessed value of properties within The annual contribution to Public adjusted to reflect the new assessed value The City receives Documentary Transfer Beverly Hills; Safety Pension Assessment of Fees is the property; and from the sale.. All of the other General Fund revenue sources evaluated projected to increase at an average annual inflationary rate of in this analysis are.5%. Comparison of KMA and HR&A General Fund Revenue Analyses The following table compares the KMA estimates. The HR&A annual General Fund revenue estimates to the estimates are based on the first stabilized operating year two development scenarios, and the results are presented in 0 dollars. of the The HR&A analysis does not include Public Safety Pension Assessment revenues. For comparison purposes the KMA Public Safety Assessment revenue projections are not included in the table BH :KHH

6 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 5 KMA HR&A Difference Proposed Project $566,300 $585,000 ($18,700) Code Compliant Project $630,400 $69,900 ($68,500) Difference ($64,100) ($113,900) ($49,800) As can be seen in the preceding table, both KMA and HR&A project that the Code Compliant Project would generate more General Fund revenue than the Proposed Project in the first stabilized year of operation. However, both analyses also conclude that over time the Proposed Project would generate more General Fund revenue than the Code Compliant Project. Again, this is attributable to the more frequent turnover of the residential units, and the differential in the projected value escalation factor5. ASSUMPTIONS APPUED IN THE GENERAL FUND REVENUE ANALYSES Population Estimates For the purposes of estimating the residential and employment populations associated with the two development scenarios, KMA applied the following assumptions: 1. The average household size for the condominiums is set at 1.5 persons per unit.. The retail employment is set at two employees per 1,000 square feet of retail leasable area. 3. The office employment is set at four employees pet 1,000 square feet of office leasable area. A number of the calculations in the analysis are based on resident equivalents. The resident equivalency measures are applied to reflect the average amount of time the residents and employees spend in Beverly Hills. The assumptions applied to estimate the various resident equivalents are: BH:KHH

7 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 6 1. Based on information published in the United States Census Bureau s 015 American Community Survey, approximately 34% of Beverly Hills residents work outside of Beverly Hills. The other residents work in Beverly Hills or are not employed.. Office and retail employees are anticipated to spend approximately 4% of their time in Beverly Hills. The resulting resident equivalents are estimated at 44 persons for the Proposed Project and 56 persons for the Code Compliant Project. Resident equivalents are used in the projections that are tied to per capita measures. General Fund Revenues Based on Property Values The revenues generated by the following General Fund revenue sources are based on the value of the property: 1. Property Taxes;. The allocation of MVILIF funds; 3. Public Safety Pension Assessment revenue; and 4. Documentary Transfer Fee revenue. The property value projections applied in this analysis are based on the following information: 1. KMA compiled sales data for luxury condominiums sold in Beverly Hills and Century City over the past year. KMA limited the survey to projects that were constructed after To project the achievable sales prices for the units, KMA applied the average sales price per square foot of building area derived from the survey and then added a 10% premium to reflect the benefits associated with new construction See Attachment I Exhibit C Table 1 and Attachment II Exhibit See Attachment I Exhibit A. B Table for the calculations BH:KHH

8 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 7 and the proposed amenities package. The resulting projected sales prices in 018 dollars are as follows: Projected Sales Prices Per Square Foot of Unit Type Total Saleable Area One-Bedroom Units $,034,00 $1,767 Two-Bedroom Units $3,050,600 $1,818 Three-Bedroom Units $4,466,600 $1,661 Four-Bedroom Units $7,195,500 $1,906 Five-Bedroom Penthouse Units $13,14,500 $,500 Weighted Average Price $4,957,700 $1, KMA estimated the value of the commercial components of the Proposed Project and the Code Compliant Project based on the following assumptions: a. Using CoStar Group Inc. (CoStar) information compiled in June 018, KMA estimated the commercial tents as follows: The achievable retail and restaurant rents were estimated at an average of $7.00 per square foot of gross leasable area on a triple net basis. ii. The achievable office tent was estimated at an average of $5.40 per square foot of gross leasable area on a triple net basis. b. A 5% allowance was provided for operating expenses that would be incurred by the property owner. c. The values of the commercial components were projected by capitalizing the stabilized net operating incomes at the following rates: Retail at 4.%; and ii. Office at 4.5% BH:KHH

9 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 8 4. The resulting values, in 018 dollars, are presented in the following table: Code Proposed Compliant Unit Type Project Project Retail & Restaurant $4,768,000 N/A Retail N/A $9,500,00 Office N/A 77,716,000 Total Value $4,768,000 $87,16, For the purposes of projecting future General Fund revenues, KMA assumed that the uses will change ownership at the following average rates: a. The condominium units are projected to be resold on average once every seven years; and b. The commercial uses are projected to be resold on average once every 10 years. 6. KMA applied the following escalations during the 0-year projection period: a. The values of the condominium units are projected to increase at the historical average rate of 7% per year; and b. The values of the commercial uses are projected to increase at an average rate of 5% per year. Property Tax Revenue Assumptions 1. The Property Tax estimates were based on the 1% general levy.. The City receives % of the 1% general levy. 3. Increases in the assessed values of the uses are limited to the statutorily set maximum of % per year until the property is resold BH:KHH

10 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 9 Motor Vehicle In-Lieu Fee Revenue Assumptions KMA estimated the MVILF revenue that could be generated by the two development scopes using the following methodology: 1. The MVLIF revenues are allocated to the City by the State of California as a percentage of the assessed valuation of property in Beverly Hills. In fiscal year 017/18 the MVLIF revenues equaled approximately.014% of the assessed values of properties in Beverly Hills.. The.014% factor was applied to the assessed value of each development scenario to estimate the MVLIF revenues. 3. MVILF revenues are treated like Property Tax revenue. As such, increases in MVILF revenues are limited to the statutorily set maximum of % per year until the property is resold. Public Safety Pension Assessment Revenue Assumptions 1. The City collects an assessment that is used to pay a portion of the City s public safety pension costs. This assessment is equal to $.0099 per $100 of a property s assessed valuation.. Public Safety Pension Assessment revenues are treated like Property Tax revenue. Increases in the assessment are limited to the statutorily set maximum of % per year until the property is resold. Documentary Transfer Fee Revenue Assumptions 1. The Documentary Transfer Fee is imposed each time a property is sold.. The total Documentary Transfer Fee is equal to $1.10 per $1,000 of value. 3. The City s share of the fee is equal to $.55 per $1,000 of value. 4. KMA applied the Documentary Transfer Fee to the original sale and subsequent sales of the condominiums. For the commercial components it was assumed that the first sale would occur in the 10th year of operation BH:KHH

11 Masa Alkire, City of Beverly Hills Santa Monica Blvd. Comparative General August 1, 018 Fund Analysis Page 10 Sales Taxes KMA prepared estimates of the following sources: Sales Tax revenues that would be generated by the Expenditures at the retail and restaurant uses; Expenditures Expenditures in Beverly Hills by in Beverly Hills by the residents of the condominiums; and the retail, restaurant and office employees. The following assumptions were applied in the Sales Tax analyses: 1. The City receives 1% of the taxable sales revenue generated within Beverly Hills.. Of the total sales at retail and restaurant uses, The taxable sales for these uses are estimated as 90% are assumed to be taxable. follows: a. b. The retail uses are projected to generate taxable sales revenue of $504 per square foot of leasable area. The restaurant uses are projected to generate taxable sales revenue $646 per square foot of leasable area. of 3. Condominium residents expenditures estimated based on estimates on typical expenditure patterns for taxable goods capture rate.4 of taxable goods in Beverly Hills were the residents average household income, sold in Beverly Hills, and a 50% 4. Using employee Hills International will establishments. Council spend an average of Shopping Centers data, of $9 per work day KMA on estimates that each taxable goods at Beverly 5. Sales tax revenues were increased annually at an assumed average inflationary rate of.5%. See Attachment I Exhibit B Table BH:KHH

12 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 11 Business Tax Revenue Assumptions 1. The Business Tax assessed on retail and restaurant uses is set at $1.5 per $1,000 of gross sales revenue in excess of $60,000.. The gross sales revenues are estimated as follows: a. Retail sales are estimated at $560 per square foot of leasable area; and b. Restaurant sales are estimated at $718 per square foot of leasable area. 3. The Business Tax assessed on office uses is based on the number of employees in the project. KMA estimated the employment base at four employees per 1,000 square feet of gross leasable office area. 4. The City charges a base Business Tax of $1,464 on office development. This covers the first,080 hours of payroll or billed hours for the entire professional/semiprofessional employee base. Above the base, the additional Business Taxes per hour are set at the following rates: a. The rate is $ per hour for professional/semiprofessional employees. b. The rate is $ per hour for non-professional employees. 5. KMA allocated 90% of the office employees to the professional/semiprofessional category, and 10% of the employees to the non-professional category. 6. Business Tax revenues are projected to increase at an average inflationary rate of.5% annually. Other Revenue Assumptions The Other Revenues included in this analysis are comprised of: 1. Licenses and Permits revenue; and. Fines and Penalties revenue BH:KHH

13 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 1 For the purposes of this analysis, KMA estimated the revenues to be generated by these sources on a per capita basis. The resulting revenue estimates were based on the following assumptions: 1. KMA used the Fiscal Year 017/18 City of Beverly Hills Operating Budget as the source for the current revenues being generated citywide.. Based on the estimated time that residents and employees spend in Beverly Hills, KMA estimated the total resident equivalent population at 43,591. The assumptions applied to teach this estimate are: a. The resident population equals 34,663 persons. After deducting the estimated number of hours residents spend outside Beverly Hills, the resident equivalent is 31,838 persons. b. The non-resident employment population equals 49,363 persons. Based on the estimated hours per day that employees spend in Beverly Hills, the resident equivalent is 11,753 persons. 3. The per capita revenues are estimated as follows: a. Licenses and Permits revenue is estimated at $471 per resident equivalent; and b. Fines and Penalties revenue is estimated at $170 per resident equivalent. 4. The Other Revenues are projected to increase at an average inflationary rate of.5% annually. GENERAL FUND REVENUE ANALYSES The General Fund revenue analysis for the Proposed Project is presented in Attachment I. The Exhibits to Attachment I are: Exhibit A: Exhibit B: Exhibit C: Exhibit D: Condominium Market Survey Taxable Sales (018 Dollars) Stabilized Revenue Estimates (01 Dollars) City General Fund Revenue Projections BH:KHH

14 Masa Alkire, City of Beverly Hills August 1, Santa Monica Blvd. Comparative General Fund Analysis Page 13 The General Fund revenue analysis for the Code Compliant Project is presented in Attachment II. The Exhibits to Attachment II are: Exhibit A: Exhibit B: Exhibit C: Taxable Sales (018 Dollars) Stabilized Revenue Estimates (018 Dollars) City General Fund Revenue Projections The revenue estimates for each General Fund revenue category are presented in Table 1, which follows this memorandum. A summary of the comparative General Fund revenue analysis is presented in the following table. Code Proposed Compliant Project Project Difference Stabilized Revenues (018 $) $554,500 $60,100 ($65,600) Yeats 1 10 Total Revenue $7,75,000 $7,875,000 ($13,000) Net Present Value $4,818,000 $4,906,000 ($88,000) Years 1 0 Total Revenue $0,43,000 $18,01,000 $,411,000 Net Present Value $9,07,000 $8,469,000 $603,000 Based on the results of the preceding analysis, KMA concluded that over the 0-year projection period the Proposed Project will generate more General Fund revenue than would be produced by the Code Compliant Project. The differences are estimated as follows: 1. In nominal terms the General Fund revenues are projected to be approximately 1% greater than projected to be generated by the Code Compliant Project BH:KHH

15 Masa Alkire, City of Beverly Hills August;, Santa Monica Blvd. Comparative General Fund Analysis Page 14. In net present value terms, using a 6% discount rate, the General Fund revenues projected to be generated by the Proposed Project are approximately 7% greater than General Fund revenues projected to be generated by the Code Compliant Project. KMA also prepared projections based on the assumption that residential property values would increase at the same 5% average annual rate as was applied to the commercial uses. The results of that analysis indicate that the Code Compliant Project would generate a greater amount of General Fund revenue through the entire 0-year projection period. This adjustment demonstrates the significant impact that future property sales have on the General Fund revenue projections. COMPARISON TO THE FISCAL ANALYSIS SUBMITTED BY THE DEVELOPER The Developer engaged HR&A to prepare fiscal analyses of the Proposed Project and a Code Compliant Project. On April 5, 018, HR&A submitted a memorandum titled Updated Net Fiscal Impact Analysis for Santa Monica Blvd., Beverly Hills. The methodology employed by HR&A is similar to the methodology applied in this KMA analysis. The following table provides a summary comparison of the HR&A annual General Fund revenue estimates to the KMA estimates. These estimates are based on the first stabilized operating year of the two development scenarios, and the results are presented in 0 dollars.5 A detailed comparison is provided in Table, which follows this memorandum. KMA HR&A Difference Proposed Project $566,300 $585,000 ($18,700) Code Compliant Project $630,400 $698,900 ($68,500) Difference ($64,100) ($113,900) ($49,800) HR&A did not include Public Safety Pension Assessment revenues in their General Fund projections. To create a consistent comparison, the KMA estimates of these revenues are not included in the table above BH :KH H

16 Masa Alkire, City of Beverly Hills August;, Santa Monica Blvd. Comparative General Fund Analysis Page 15 The key differences between the KMA and HR&A analyses are summarized in the following sections of this memorandum. Proposed Project 1. The HR&A estimate of the average condominium value is approximately 19% higher than the KMA estimate. This impacts the Property Tax, MVILF and Documentary Transfer Fee revenue projections.. The KMA Sales Tax estimate is approximately 6% higher than the HR&A estimate. This is largely associated with differences in the projected expenditures made by condominium residents in Beverly Hills establishments. 3. The HR&A estimate of Other Revenues is 1% higher than the KMA estimate. This is caused by differences in the estimated size of the resident equivalent population. Code Compliant Project 1. The HR&A Sales Tax estimate is approximately 8% higher than the KMA estimate. This is attributable to the fact that HR&A estimated the employee population at 69 resident equivalents while KMA arrived at an estimate of 56 resident equivalents.. The HR&A Business Tax revenue estimate is approximately 0% higher than the KMA estimate. This is caused by the fact that HR&A projected a total of 86 office employees versus the KMA estimate of 7 employees. 3. The HR&A estimate of Other Revenues is 19% higher than the KMA estimate. This is caused by differences in the estimated size of the resident equivalent population BH:KHH

17 Masa Alkire, City of Beverly Hills Santa Monica Blvd. Comparative General August 1, 018 Fund Analysis Page 16 CONCLUSIONS Both the KMA and HR&A Proposed Project would generate more General Project. However, the KMA in analyses project that over the 0-year projection period the general the Fund HR&A General Fund estimates for both the Proposed Project and the following table compares the 0-year projections included analyses.6 revenue than the Code Compliant revenue estimates are higher than Code in the Compliant Project. KMA and HR&A The KMA HR&A Nominal Dollars 0- Year Projections Proposed Project $18,904,000 $1,561,000 Code Compliant Project 17,700,000 18,64,000 Total Increase $1,04,000 $3,97,000 Percentage Increase 6.4% 15.3% Net Present Value at a 6% Discount Rate 0-Year Projections Proposed Project $8,399,000 $8,899,000 Code Compliant Project 8,148,000,086,000 Total Increase $51,000 $813,000 Percentage Increase 3.0% 9.1% For a consistent comparison, the KMA estimates of Public Safety Retirement Assessment revenues are not included in the table BH:KHH

18 TABLE 1 COMPARISON: PROPOSED PROJECT TO CODE COMPLIANT COMMERCIAL PROJECT BEVERLY HILLS, CAUFORNIA PROPOSED PROJECT CODE COMPLIANT PROJECT DIFFERENCE Stabilized Revenue Estimates (018 $) PropertyTax Revenue Motor Vehicle In-Lieu Fee Revenue Public Safety Pension Assessment Documentary Transfer Fee Revenue Sales Tax Revenue Business Tax Revenue Other Revenues $76,300,00 31,900 87,00 99,000 9,700 8,00 $151,900 1,00 17,500 48,000 43, ,500 35,900 Total Annual Revenue $554,500 $60,100 ($65,600) II. Years Total Property Tax Revenue $4,845,000 $,468,000 Motor Vehicle In-Lieu Fee Revenue 390, ,000 Public Safety Pension Assessment 559,000 85,000 Documentary Transfer Fee Revenue 65,000 95,000 Sales Tax Revenue 1,4, ,000 Business Tax Revenue 10,000 3,85,000 Other Revenues 349, ,000 Total Annual Revenue $7,75,000 $7,875,000 ($13,000) B. Property Tax Revenue Motor Vehicle In-Lieu Fee Revenue Public Safety Pension Assessment Documentary Transfer Fee Revenue Sales Tax Revenue Business Tax Revenue Other Revenues 6% Discount Rate $3,00,000 43, , , ,000 73,000 13,000 $1,599,000 19, ,000 45,000 35,000,35,000 71,000 6% Discount Rate $4,818,000 $4,906,000 ($88,000) III. Years A. Total Property Tax Revenue $13,44,000 $5,951,000 Motor Vehicle In-Lieu Fee Revenue 1,065, ,000 Public Safety Pension Assessment 1,58,000 31,000 Documentary Transfer Fee Revenue 735,000 61,000 Sales Tax Revenue,791,000 1,15,000 Business Tax Revenue 74,000 8,783,000 Other Revenues 795,000 1,01,000 Total Annual Revenue $0,43,000 $18,01,000 $,411,000 B. 6% Discount Rate Property Tax Revenue Motor Vehicle In-Lieu Fee Revenue Public Safety Pension Assessment Documentary Transfer Fee Revenue Sales Tax Revenue Business Tax Revenue Other Revenues $5,83, , ,000 35,000 1,8,000 16, ,000 $,779,000 $3,000 31,000 89, ,000 4,034, ,000 6% Discount Rate $9,07,000 $8,469,000 $603,000 Prepared by: Keyser Marston Associates, Inc. File name: SM Fiscal ; Project Comp 78 1of3

19 TABLE COMPARISON: KMAAND HRA STABILIZED GENERAL FUND REVENUE PROJECrIONS(0$) KMA HR&A DIFFERENCE I. PROPOSED PROJECT Property Tax Revenue $341,300 $403,100 ($61,800) Motor Vehicle In-Lieu Fee Revenue 7,400 33,300 (5,900) Documentary Transfer Fee Revenue 46, ,500 Sales Tax Revenue 109,300 10,700 6,600 Business Tax Revenue 10,700 10, Other Revenues 31,100 35,400 (4,300) Total Annual Revenue $566,300 $585,000 ($18,700) II. CODE COMPLIANT PROJECT Property Tax Revenue $184,600 $154,300 $30,300 Motor Vehicle In-Lieu Fee Revenue 14,800 1,700,100 Documentary Transfer Fee Revenue Sales Tax Revenue 47,600 5,000 (4,400) Business Tax Revenue 343, ,00 (87,400) Other Revenues 39,600 48,700 (9,100) Total Annual Revenue $630,400 $698,900 ($68,500) 1 HR&A did not include Public Safety Pension Assessment revenues in the General Fund projections. To create a consistent comparison, the KMA estimates of these revenues are not included on this table. Prepared by: Keyser Marston Associates. Inc. Filename: 9900_9916 SM Fiscal ; (MA HRA Camp 79 of 3

20 AUACHMENT I - EXHIBIT A CONDOMINIUM MARKET SURVEY Prepared by: Keyser Marston Associates Inc. File name: 9900_9916 SM Fiscal 8 118; Condo Comps 80

21 AUACHMENT I - EXHIBIT A CONDOMiNIUM MARKET SURVEY Sales Price Year # of Square Per Square Address City Ziip Code Built Bedrooms # of Baths Feet Total Foot 447 North Doheny Dr #303 Beverly Hills ,556 $1,398,000 $ South Elm Dr #116 Beverly HIlls ,401 $,50,000 $1,606 Minimum 1,401 $1,398,000 $898 Maximum 1,556 $,50,000 $1,606 Average 1,401 $,50,000 $1, South Elm Dr #117 Beverly Hills ,460 $1,900,000 $1, South Elm Dr #304 Beverly Hills ,560 $,00,000 $1,95 31 South Elm #307 Beverly Hills ,575 $,550,000 $1,619 1 West Century Dr Unit 30D Los Angeles ,80 $3,595,000 $1,577 1 West Century Dr Unit 34D Los Angeles ,50 $3,695,000 $1,64 1 West Century Dr Unit 19A Los Angeles ,510 $5,700,000 $1,64 1 West Century Dr Unit 6A Los Angeles ,50 $6,150,000 $1,747 1 West Century Dr Unit A Los Angeles ,440 $6,775,000 $1,969 Minimum 1,460 $1,900,000 $1,95 Maximum 3,50 $6,775,000 $1,969 Average,449 $4,048,15 $1, North Palm Dr #10 Beverly Hills ,57 $,395,000 $1, Elm Dr #105 Beverly Hills ,959 $3,50,000 $1, North Palm Dr #40 Beverly Hills ,645 $3,300,000 $1,48 31 Elm Drive #403 Beverly Hills ,09 $3,850,000 $1, North Palm Dr #305 Beverly Hills ,600 $3,895,000 $1, North Palm Dr #401 Beverly Hills ,670 $4,400,000 $1,648 1 West Century Dr Unit 4C Los Angeles ,50 $5,000,000 $1,538 1W Century Dr Unit 0A Los Angeles ,50 $5,475,000 $1,555 1 West Century Dr Unit 18 Los Angeles ,50 $5,475,000 $1,555 1W Century Dr Unit 35B Los Angeles ,430 $6,031,000 $1,758 1W Century Dr Unit 8 Los Angeles ,560 $6,175,000 $1,735 Minimum 1,959 $,395,000 $1,061 Maximum 3,600 $6,175,000 $1,758 Average,965 $4,476,909 $1, Century Woods Drive Los Angeles ,095 $7,150,000 $1,173 1W Century Dr Unit 35A Los Angeles ,450 $8,131,000 $1,87 1 West Century Dr Unit TH A Los Angeles ,00 $9,995,000 $1,660 1 W Century Dr Unit A Los Angeles ,00 $9,995,000 $1,660 1 West Century Dr Ph 40 Los Angeles ,318 $0,000,000 $,146 Minimum 4,450 $7,150,000 $1,173 Maximum 9,318 $0,000,000 $,146 Average 6,381 $11,054,00 $1,73 Source: Redfin, June 018 Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916SM FIscalB 1 15; Condo Comps 81

22 ATTACHMENT I - EXHIBIT B PROPOSED PROJECT TAXABLE SALES (018 $) Prepared by: Keyser Marston Associates, Inc. File name: SM FIscal 81 18; Taxable Sales PP 8

23 ATTACHMENT I - EXHIBIT B - TABLE 1 PROPOSED PROJECT TAXABLE SALES GENERATED BY COMMERCIAL SPACE (018 $) I. Retail Space Sf of Building Area Taxable Sales Per Square Foot of Leasable Area Taxable Sales - Retail Space 9,73 Sf $504 /Sf $4,673,600 II. Restaurant Space Sf of Building Area Taxable Sales Per Square Foot of Leasable Area 3,763 Sf $646 /Sf Taxable Sales - Restaurant Space $,431,700 III. ITaxable Sales Generated by Commercial Space 13,036 Sf $545 /Sf $7,105, The estimates are based on the assumption that 90% of the sales are taxable. Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal ; Taxable Sales PP 83

24 AflACHMENT I - EXHIBIT B- TABLE PROPOSED PROJECT TAXABLE SALES GENERATED BY RESIDENTS <01$ $) I. Average Household Income Average Sales Price Per Unit Estimated Housing Exøenses Mortgage Debt Service Other Expenses $4,957,74 I $41,153 79,34 Total Annual Housing Expenses $30,477 II. Housing Expenses as a Percentage of Income Average Household Income Taxable Sales Generated Per Household Average Household Income Expenditures as a % of Gross Income Tasable Sales as ax of Total Sales Percentage Captured in Beverly Hills 35% $915,600 $915,600 70% 30% 50% Taxable Sales Generated Per Household $96,100 Ill ITaxable Sales Generated by Residents 7 Units $96,100 /Unit $,594,700 I 1 Based on a mortgage equal to 80% of the Average Sales Price Per Unit. The mortgage interest rate is set at 4.5% over a 30 Year Term. Other Expenses are estimated at % of the Average Sales Price Per Unit. Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal 81 18; Taxable Sales PP 84

25 ATTACHMENT I - EXHIBIT B - TABLE 3 PROPOSED PROJECT TAXABLE SALES GENERATED BY EMPLOYEES (018 $) I. Retail Employees 6 II. Estimated Daily Expenditure Per Employee $9 Ill. Estimated Number of working Days in a Year 61 IV ITaxable Sales Generated by Employees 6 Employees $7,569 /Employee $196,800 I 1 SeeAUACHMENTI-EXHIBITC-TABLE 1. Based on information published by the international Council of Shopping Centers. Based on information published by the United States Office of Personnel Management. Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal Bi 18; Taxable Sales PP 85

26 AUACHMENT I - EXHIBIT C PROPOSED PROJECT STABILIZED REVENUE ESTIMATES (018 $) Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal ; Rev Calcs_PP 86

27 AUACHMENT I - EXHIBIT C - TABLET RESIDENT EQUIVALENT ESTIMATES PROPOSED PROJECT STABILIZED REVENUE ESTIMATES (01$ $) I. Resident Population Number of Residential Units Persons Per Residential Unit Estimated Total Residential Population Residents Working Outside of Beverly Hills % of Day Spent in Beverly Hills % Resident Equivalents 11 Remaining Balance of the Residential Population ¾ of Day Spent in Beverly Hills 7 100% Resident Equivalents 7 IResident Population - Resident Equivalents 38 II. Retail Employees Occupied Retail Square Feet 13,036 Estimated Retail Square Feet Per Employee 500 Retail Employees 6 ¾ of Day Spent In Beverly Hills 4% IRetail Employees - Resident Equivalents 6 III. Resident Equivalent Population Resident Population - Resident Equivalents 38 Retail Employees - Resident Equivalents 6 liotal Resident Equivalent Population 44 Based on data provided In the American Community Survey publsihed in 015 by the United States Census Bureau. Assumes that the resident spends 40 hours per week working outside of Beverly Hills. Assumes that the employee spends 40 hours per week working in Beverly Hills. Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal 8 118; Rev CalcsPP 87

28 AUACHMENT I - EXHIBIT C - TABLE ANNUAL GENERAL FUND REVENUES PROPOSED PROJECT STABILIZED REVENUE ESTIMATES (018 $) Property Tax Revenue Assessed Value Property Tax Rate Total Property Tax Revenue City Share of Property Tax Revenue $158,67,000 1,0% $1,586, % ICitv Property Tax Revenue $76,300 I II. Motor Vehicle In-Lieu Fee Revenue Assessed Value Percent of Assessed Value $158,67, % Motor Vehicle In-Lieu Fee Revenue $,00 I III. Public Safety Pension Assessment Assessed Value Assessment Per $100 of Assessed Value $158,67, Public Safety Pension Assessment $31,9ö0 I IV. Documentary Transfer Fee Revenue Initial Sales Revenue Fee Per $1,000 of Gross Sales Revenue City Share $158,67,000 $ % IDocumentary Transfer Fee Revenue $87,00 I V. Sales Tax Revenue A. Taxable Sales Taxable Sales Generated by Commercial Space $7,105,300 Taxable Sales Generated by Residents,594,700 Taxable Sales Generated by Employees 196,800 Total Taxable Sales $9,896,800 B. City Share of Taxable Sales 1.0% ITotal Sales Tax Revenue $99,000 I Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal ; Rev Calcs_PP 88

29 EXHIBIT ATTACHMENT I - EXHIBIT C TABLE (CONTINUED) ANNUAL GENERAL FUND REVENUES PROPOSED PROJECT STABILIZED REVENUE ESTIMATES (018 $) GENERAL FUND REVENUE ANAI.YSIS VI. Business Tax Revenue A. Retail Sf of Building Area Gross Sales 1Sf of Building Area Total Gross Sales Gross Sales Threshold Sales Revenue Subject to Business Tax B. Restaurant Sf of Building Area Gross Sales /Sf of Building Area Total Gross Sales Gross Sales Threshold Sales Revenue Subject to Business Tax 9,73 $560 $5,19,900 (60,000) 3,763 $718 $,701,800 (60,000) $5,13,900 $,641,800 C. Total Sales Revenue Subject to Business Tax Fee Above Sales Threshold $1.5/$1,000 Gross Sales $7,774, % Total Business Tax Revenue $9,700 I VII. Other Revenues A. Licenses and Permits Revenue Resident Equivalent Population 44 Licenses and Permits Revenue Per Resident Equivalent $471 Total Licenses and Permits Revenue $0,700 B. Fines and Penalties Revenue Resident Equivalent Population 44 Fines and Penalties Revenue Per Resident Equivalent $170 Total Fines and Penalties Revenue $7,500 ITotal Other Revenues $8,00 I VIII. ITotal Annual Revenue $554,500 I 1 The estimated value of the condominiums is partially based on the average prices derived from a survey of recent sales by bedroom type (See ATTACHMENT I - EXHIBIT A). A 10% premium is added to reflect new construction and the amenities package being proposed. The value of the retail/restaurant space is based on a $7.00/square foot weighted average of retail and restaurant rents published by CoStar in June 018. The value of the retail/restaurant component is estimated based on a 4.% capitalization rate. See ATTACHMENT I - B. See ATTACHMENT I - EXHIBIT C - TABLE 1. Based on the FY 017/18 City of Beverly Hills Operating Budget and a resident equivalent population of 43,591 persons. Prepared by: Keyser Marston Associates, Inc. File name: SM Fiscal 81 18; Rev CalcsPP 89

30 AUACHMENT I - EXHIBIT CITY GENERAL FUND REVENUE PROJECTIONS PROPOSED PROJECT SANTA MONICA BOULEVARD Prepared by: Keyser Marston Associates, Inc. File Name: 9900_9916 SM Fiscal 81 18: CF_PP Page 133

31 ATTACHMENT I - EXHIBIT D - TABLE 1 PROPERTY TAX REVENUE PROPOSED PROJECT I Year 1 Residential Year Residential Sales Sales Commercial Total Year 019 $100,110 $0 $4,706 $104, , ,01 161, , ,145 16, , ,13 43, , , ,074 43, , , ,076 44, , ,91 156,137 45,777 36, , ,60 46,69 369, ,790 16,445 47,66 447, ,546 36,6 48,578 57, ,397 40,987 49, , ,345 45,807 50, , ,39 50,73 70,64 578, ,540 55,737 71, , ,790 60,85 73, , ,839 66,069 74,565 7, , ,385 76, , ,65 386,97 77, , ,11 394,71 79,19 879, ,315 40,606 80,71 896, , ,658 8,36 914, , ,871 83,97 93, ,150 47,49 114,453 1,154,85 Total NPV Years $4,845,407 $3,00,000 Years 041 $13,44,63 $5,83, Based on a 1% property tax and a City share of %. The resale. Turnover rate is an average of 7 years for residential Appreciation Is at an average of 7% per year for commercial The projection period during construction. Based on a 6% Discount Rate. component. for the set at rate projected component. starts rate the statutory component the increase of % per year is applied until and 10 years for commercial residential and 5% year the component per Prepared by: Keyser Marston Associates, Inc. File Name: 9900_9916 SM Fiscal ; CFPP Page 14

32 AflACHMENT I - EXHIBIT D - TABLE MOTOR VEHICLE IN-LIEU FEE REVENUE PROPOSED PROJECT r Year 1 ResIdential Year ResidentIal Sales Sales Commercial Total Year 019 $8,048 $0 $378 $8, , , , ,137 13, ,14 11,87 3,468 7, ,385 1,064 3,537 7, ,633 1,305 3,608 8, ,885 1,551 3,680 9, ,143 1,80 3,753 9, ,115 13,058 3,88 36, ,497 18,99 3,905 4, ,887 19,37 3,983 43, ,85 19,760 4,063 44, ,691 0,155 5,648 46, ,105 0,558 5,761 47, ,57 0,969 5,877 48, ,695 1,388 5,994 58, ,309 30,497 6,114 67, ,935 31,107 6,36 69, ,574 31,730 6,361 70, ,5 3,364 6,488 7, ,889 33,011 6,618 73, ,567 33,67 6,750 74, ,89 34,345 9,01 9,835 Total NPV Years $389,506 $43,000 Years $1,064,661 $469,000 Based on 0.014% of assessed value. The statutory increase of % per year is applied until resale. Turnover rate is set at an average of 7 years for the residential component and 10 years for the commercial component. Appreciation is projected at an average rate of 7% per year for the residential component and 5% per year for the commercial component. The projection period starts during construction. 3 Based on a 6% Discount Rate. Prepared by: Keyser Marston Associates, Inc. File Name: 9900_9916 SM Fiscal 81 18; CF_PP Page 15

33 - ATTACHMENT I - EXHIBIT D - TABLE 3 PUBLIC SAFETY PENSION ASSESSMENT 1 PROPOSED PROiE SANTA MONICA BOULEVARD Year 1 Residential Year Residential Sales Sales Commercial Total Year 019 $11,553 $0 $543 $1, , , ,93 18,684 1,63 18,7 17,43 16,980 4,978 39,390 17,780 17,30 5,078 40,178 18,136 17,666 5,179 40,981 18,499 18,019 5,83 41,801 18,869 18,380 5,389 4,637 7,443 18,747 5,496 51,686 7,991 7,66 5,606 60,864 8,551 7,811 5,718 6,081 9,1 8,368 5,833 63, ,705 8,935 8,109 66, ,99 9,514 8,71 68, ,905 30,104 8,437 69, ,067 30,706 8,605 83, ,948 43,783 8,777 97, ,84? 44,659 8,953 99, ,764 45,55 9,13 101, ,699 46,463 9, , ,653 47,393 9, , ,66 48,340 9, , ,76 49,307 13,09 133,77 Years 019 Total NPV 031 $559,191 $348,000 Yeats $1,58,473 $673,000 Based on a per $100 of assessed value. The statutory increase of rate is % per year is applied until resale. Turnover set at an average of? years for the residential component and 10 years for the commercial component Appreciation commercial component is projected at an average rate of The projection period starts during construction. Based on a 5% Discount Rate. 7% per year for the residential component and 5% per year for the Prepared by: Keyser Marston Associates, Inc. File Name: SM Fiscal ; CF_PP Page _9916

34 ATTACHMENT) - EXHIBIT D - TABLE 4 DOCUMENTARY TRANSFER FEE REVENUE PROPOSED PROJECT Year 1 Residential Year ResidentIal Sales Sales Commercial Total Year 019 $ $46,766 46, $46,465 46, ,095 75,095 0$ 7 74,61 74, ,190, ,587 10, , , ,636 36,145 9,781 Total NPV Years $65,18 $173,000 Years $735,306 $35,000 Set at the City s 50% share of $1.10 per $1,000 in value. Turnover rate is set at an average of? years for the residential component and 10 years for the commercial component. Appreciation Is projected at an average rate of 7% per year for the residential component and 5% for the commercial component. The projection period starts during construction. Based on a 6% Discount Rate. Prep3red by: Keyser Maraton Associates, Inc. File Name: SM Fiscal : CFPP Page 17

35 ATTACHMENT I - EXHIBIT 0-TABLES OTHER REVENUE SOURCES PROPOSED PROJECT Sales Tax Revenue Business Tax Other Revenues Year $109,77 $10,707 $31, ,009 10,975 31, ,810 11,49 3, ,680 11,530 33, ,6 11,819 34, ,637 1,114 35, ,78 1,417 36, ,897 1,77 37, ,144 13,045 37, ,473 13,37 38, ,884 13,706 39, ,38 14,048 40, ,966 14,400 41, ,640 14,760 4, ,406 15,19 43, ,66 15,507 45, ,3 15,895 46, ,79 16,9 47, ,436 16,699 48, ,696 17,117 49,76 Years Total $1,4,77 $119,954 $348,734 NPV $748,000 $73,000 $13,000 Years Total $,791,456 $73,506 $795,14 NPV $1,8,000 $16,000 $365,000 See ATTACHMENT I - EXHIBIT C - TABLE for base year estimates in 018 dollars. The base year estimates are escalated at.5% per year for four years to teach the projected revenues in 0. Annual inflation at.5% thereafter is applied in the projections. The projection period starts in the first yeat of operation. The cash flow is discounted back to 019 for NPV purposes. Based on a 6% Discount Rate. Prepared by: Keyser Marston Associates, Inc. File Name: 9900_9916 SM Fiscal ; CF_PP Page 18

36 ATTACHMENT II- EXHIBIT A CODE COMPLIANT PROJECT TAXABLE SALES $) SANTA MONICA BOULEVARD (018 Prepared by: Keyser Marston AssocIates, Inc. File name: SM Fiscal ; Taxable Sales ZC 96

37 ATTACHMENT II- EXHIBIT A TABLE 1 CODE COMPLIANT PROJECT TAXABLE SALES GENERATED BY COMMERCIAL SPACE (018$) BEVERLY HILLS, CAUFORNIA I. Retail Space Sf of Building Area 5,000 Sf Taxable Sales Per Square Foot of Leasable Area 1 $504 1Sf Taxable Sales - Retail Space $,50,000 II. ITaxable Sales Generated by Commercial Space 5,000 Sf $504 /Sf $,50,000 I The estimates are based on the assumption that 90% of the sales are taxable. Prepared by: Keyser Marston Associates, Inc. File name: SM Fiscal 81 18; Taxable Sales ZC 97

38 ATTACHMENT II - EXHIBIT A - TABLE CODE COMPLIANT PROJECt TAXABLE SALES GENERATED BY EMPLOYEES (018$) I. Employees 1 Office Employees 7 Retail Employees 10 Total Employees 37 H. Estimated Daily Expenditure Per Employee $9 III. Estimated Number of working Days in a Year61 IV. jtaxable Sales Generated by Employees 37 Employees $7,569 /Employee $1,793,900 I See ATtACHMENT II - EXHIBIT B - Based on information published by Based on information published by TABLE 1. the the United States Office of Personnel Management. International Council of Shopping Centers. Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal ; Taxable Sales 98

39 AflACHMENT II- EXHIBIT B CODE COMPLIANT PROJECT STABILIZED REVENUE ESTIMATES (018 $) CALIFORNIA BEVERLY HILLS, Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal ; Rev Calcs_ZC 99

40 ATTACHMENT II- EXHIBIT B * TABLE 1 RESIDENT EQUIVALENT ESTIMATES CODE COMPLIANT PROJECT STABILIZED REVENUE ESTIMATES (018$) BEVERLY HILLS, CAUFORNIA I. Office Employees Occupied Office Square Feet Estimated Office Square Feet Per Employee Office Employees % of Day Spent in Beverly Hills 56, % loffice Employees - Resident Equivalents 54 I Il. Retail Employees Occupied Retail Square Feet 5,000 Estimated Retail Square Feet Per Employee 500 Retail Employees 10 % of Day Spent in Beverly Hills 4% IRetail Employees - Resident Equivalents Ill. Resident Equivalent Population Office Employees Resident Equivalents 54 Retail Employees - Resident Equivalents ITotal Resident Equivalent Population 56 I 1 Assumes a 95% occupancy rate. Assumes that the employee spends 40 hours per week working in Beverly Hills. Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal ; Rev Calcs_ZC 300

41 ATTACHMENT II- EXHIBIT B - TABLE ANNUAL GENERAL FUND REVENUES CODE COMPLIANT PROJECT STABILIZED REVENUE ESTIMATES (018$) I. Property Tax Revenue Assessed Value - Office Assessed Value - Retail Property Tax Rate Total Tax Revenue City Share of Property Tax Revenue ICitv Property 1 1 $77,716,000 9,500, % $87, % Property Tax Revenue$151,900 I II. Motor Vehicle In-lieu Fee Revenue Assessed Value $87,16,000 of Assessed Value 0.014% Percent jmotor Vehicle In-Lieu Fee Revenue$1,00 I III. Public Safety Pension Assessment Assessed Value I $87,16,000 Assessment Per $100 of Assessed Value IPublic Safety Pension Assessment $17,500 I IV. Documentary Transfer Fee Revenue Initial Sales Revenue 1 $87,16,000 Fee Per $1,000 of Gross Sales Revenue $1.10 City Share 50% Documentary Transfer Fee Revenue $48,Oóãj V. Sales Tax Revenue A. Taxable Sales Taxable Sales Generated by Commercial Space $,50,000 Taxable Sales Generated by Employees 1,793,900 Total Taxable Sales $4,313,900 B. City Share of Taxable Sales 1.0% ITotal Sales Tax Revenue $43,100 I Prepared by: geyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal 8 118; Rev Calcs_ZC 301

42 AUACHMENT II- EXHIBIT B - TABLE (CONTINUED) ANNUAL GENERAL FUND REVENUES CODE COMPLIANT PROJECT STABILIZED REVENUE ESTIMATES (018$) VI. Business Tax Revenue A. Qffjç Base Tax Total Office Employees Estimated % of Professional Employees Professional Employees Estimated Number of Working Hours Per Year Tax Per Additional Professional Hour Business Tax - Professional Employees (Less) Base Tax 7 90% 04,088 $O $99,806 (1,464) $1,464 Net Business Tax - Professional Employees Estimated % of Non-Professional Employees Non-Professional Employees Estimated Number of Working Hours Per Year Tax Per Additional Non-Professional Hour Net Tax Per Additional Non-Professional Hour 10% 3,088 $ $98,34 $6,788 Total Business Tax Revenue - Office $306,594 B. Retail Sf of Building Area Gross Sales 1Sf of Building Area Total Gross Sales Gross Sales Threshold Sales Revenue Subject to Business Tax Fee Above Sales Threshold 5,000 $560 $,800,000 (60,000) $,740,000 $1.5/$1,000 Gross Sales $3,45 ITotal Business Tax Revenue Rounded $311,500 I Prepared by: Keyset Marston Associates, Inc. File name: 9900_9916 SM Fiscal 81 18; Rev CaIcsZC 30

43 ATTACHMENT II- EXHIBIT B - TABLE (CONTINUED) ANNUAL GENERAL FUND REVENUES CODE COMPLIANT PROJECT STABILIZED REVENUE ESTIMATES (018 $) VII. Other Revenues A. Licenses and Permits Revenue Resident Equivalent Population Licenses and Permits Revenue Per Resident Equivalent Total licenses and Permits Revenue 8. Fines and Penalties Revenue Resident Equivalent Population Fines and Penalties Revenue Per Resident Equivalent Total Fines and Penalties Revenue 56 $ $170 $6,400 $9,500 ITotal Other Revenues $35,900 I VIII. ITotal Annual Revenue $60,100 I The estimated value of the office space is based on a $5.40/square foot average of office rents published by CoStar in June 016. The value of the office space Is estimated based on a 4.5% capitalization rate. The value of the retail space Is based on a $7.00/square foot weighted average of retail and restaurant rents published by CoStar in June 018. The value of the retail space Is estimated based on a 4.% capitalization rate. See ATTACHMENT II - EXHIBIT A. Based on the City s fee schedule. The Base Tax covers up to,080 hours of employee payroll. See ATTACHMENT II - EXHIBIT B - TABLE 1. Based on the FY 017/18 City of Beverly Hills Operating Budget and a resident equivalent population of 43,591 persons. Prepared by: Keyser Marston Associates, Inc. File name: 9900_9916 SM Fiscal 81 18; Rev CalcsZC 303