FISCAL IMPACT ANALYSIS FOR THE REDEVELOPMENT PLAN FOR THE CHENEY/HAGERTY/KUSHNER TRACT TOWNSHIP OF CRANBURY MIDDLESEX COUNTY, NEW JERSEY.

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1 FISCAL IMPACT ANALYSIS FOR THE REDEVELOPMENT PLAN FOR THE CHENEY/HAGERTY/KUSHNER TRACT TOWNSHIP OF CRANBURY MIDDLESEX COUNTY, NEW JERSEY Prepared by: Phillips Preiss Grygiel LLC Planning and Real Estate Consultants Newark Street Third Floor, Suite D Hoboken, NJ September 30, 2015

2 TABLE OF CONTENTS TABLE OF CONTENTS... ii LIST OF TABLES... iii 1.0 Executive Summary Proposed Development Fiscal Impacts Existing ratable base Existing property tax revenues generated by subject property Fiscal impacts Estimated Project Revenues Estimated Municipal and School District Expenditures Summary of Cost-Revenue Analysis Conclusions ii P h i l l i p s P r e i s s G r y g i e l L L C

3 LIST OF TABLES Table 1: Breakdown of the Tax Base by Property Classification Township of Cranbury, Table 2: Property Class Share of Parcels and Assessed Value Township of Cranbury, Table 3: Breakdown of the Tax Rate Township of Cranbury, Table 4: Annual Property Tax Revenues from Existing Development: Block 20.16, Lot 7-10 and Lot 20; and Block 19, Lot Table 5: Breakdown of Annual Property Tax Revenues from Existing Development: Block 20.16, Lot 7-10 and Lot 20; and Block 19, Lot Table 6: Market Value of the Proposed Mixed-Use Development...6 Table 7: Estimated Assessed Value of the Proposed Mixed-Use Development...7 Table 8: Breakdown of Annual Property Tax Revenues To Be Generated by the Proposed Mixed-Use Development...7 Table 9: Breakdown of Non-Residential and Residential Per Capita Costs, Township of Cranbury...8 Table 10: School Spending in the Academic Year: Cranbury School District...8 Table 11: Estimated Residents Generated by the Proposed Mixed-Use Development...9 Table 12: Estimated Public School Children Generated by The Proposed Mixed-Use Development...9 Table 13: Estimated New Jobs to be Generated by The Proposed Mixed-Use Development Table 14: Estimated Annual Municipal Expenditures To Be Generated by the Proposed Development Table 15: Summary of Cost-Revenue Analysis for the Township of Cranbury Proposed Mixed-Use Development iii P h i l l i p s P r e i s s G r y g i e l L L C

4 1.0 EXECUTIVE SUMMARY This report assesses the fiscal impacts associated with a proposed mixed-use development on property referred to as the Cranbury High Point Redevelopment Area in the Township of Cranbury, New Jersey. The redevelopment envisions the following: 12,250 square feet of retail space; a 5,000 square foot bank; a 12,000 square foot pharmacy; 12 apartment residential units; 126 surface parking spaces; 54 townhouse residential units; 189 garage/drive spaces; 37 visitor spaces; 34,500 square feet of park area; and a 19,500 square foot stormwater management basin. In order to compare the revenues expected to be generated from the proposed mixed-use development with the anticipated municipal service costs, a fiscal impact analysis has been undertaken utilizing the Per Capita method for both the residential and non-residential portions of the project. This method was developed by the Center for Urban Policy Research (CUPR) at Rutgers University, is detailed in the Urban Land Institute s publication Development Impact Assessment Handbook, and is a widely used methodology for evaluating the fiscal impacts of a proposed development. The Per Capita method is an average costing approach for projecting the impact of population change (whether it be residents, employees, school children, etc.) on local municipal and school district costs and revenues. The proposed development is projected to generate a net tax surplus to the municipality as well as the local school districts. Tax revenues of approximately $456,000 annually are anticipated to accrue to the local school district, with close to $202,000 per year accruing to the municipality. Utilizing Rutgers latest New Jersey Demographic Multipliers (from 2006), the projected population to be generated by the proposed development is 152 total residents and the number of public school children is expected to be 17 students. The proposed mixed-use development is anticipated to create 50 jobs according to recognized employment multipliers. After taking the proposed development s tax-supported non-residential and residential municipal costs as well as school costs into account, the proposed development is projected to generate a net tax surplus to the municipality of about $22,000 and approximately $200,000 in a net tax surplus to the school district. In other words, the proposed residential development is anticipated to not only cover its tax-supported costs, but generate approximately $221,600 in a total net tax surplus to the municipality and local school district. Table 15, at the conclusion of this report provides a summary of the net tax impact for the proposed mixed-use development. Tables 1 through 14 provide all of the calculations, assumptions and the methodology used to derive these results. 1 P h i l l i p s P r e i s s G r y g i e l L L C

5 2.0 PROPOSED DEVELOPMENT This report analyzes the fiscal impact of the proposed mixed-use development on the Cheney/Hagerty/Kushner Tract consisting of former mixed-use, agriculturally related warehouse and single-family development on Block 20.16, Lots 7-10 and Lot 20 and Block 19, Lots 2-4. The property is located in the area between Old Cranbury Road and South Main Street (County Route 539), south of Old Trenton Road (County Route 535) in the Township of Cranbury, New Jersey. The development includes the construction of 54 townhouse units with 189 garage/drive spaces and 37 visitor spaces; 12 apartment units (5 market rate and 7 low-moderate income units) above 12,250 square feet of retail; a 5,000 square foot bank and a 12,000 square foot pharmacy. The mixed-use portion will have 102 retail surface parking spaces and additional 24 spaces servicing the 12 apartment units. The site will also include 34,500 square feet of park space and an additional 19,500 square feet dedicated to a stormwater management basin. The following report assesses the municipal costs and revenues attributable to the development using the per capita method for both the non-residential and residential portions of the project. This method was developed by the Center for Urban Policy Research at Rutgers University. This fiscal impact analysis looks at the impact not only on the municipality, but also on the district that serves Cranbury s children, and Middlesex County general funds. Cranbury is served by one school district. The Cranbury School District covers the following: the Cranbury School, which serves K through 8 and the public high school students that attend the Princeton High School. The Cranbury school district receives a portion of local property tax collections. 2 P h i l l i p s P r e i s s G r y g i e l L L C

6 3.0 FISCAL IMPACTS In order to compare the expected property tax revenues to be generated from the proposed mixed-use development with the anticipated tax-supported municipal service costs, a fiscal impact analysis has been undertaken utilizing the Per Capita method for both the residential and non-residential portions of the project. This method was developed by the Center for Urban Policy Research (CUPR) at Rutgers University, as detailed in the Urban Land Institute s publication Development Impact Assessment Handbook. It is a widely used methodology for evaluating the fiscal impacts of a proposed development. The Per Capita method is an average costing approach for projecting the impact of population change (whether it be residents, employees, school children, etc.) on local municipal and school district costs and revenues. 3.1 EXISTING RATABLE BASE As shown in Table 1, Cranbury has a total real property tax base of approximately $1.5 billion. Approximately 46 percent of the Township s tax base is attributable to residential development, consisting of 46 percent non-apartment residential development and less than 1 percent apartment residential development. The combined (apartment and non-apartment) residential percentage of total parcels is approximately 77 percent (Table 1). Averaging the residential (apartment and non-apartment) percentages for parcel and assessment value yields an estimated share of residential associated expenditures for the Township of 61 percent (Table 2). Accordingly, the share of non-residential associated expenditures for Cranbury is approximately 30 percent. Vacant land accounts for approximately three percent and farmland is the remaining 6 percent. Table 1: Breakdown of the Tax Base by Property Classification Township of Cranbury, Parcels Assessed Valuation Code Number Percent Total Percent 1. Vacant Land % $ 10,174, % 2. Residential 1, % $702,804, % 3a. Farm Homestead (Regular) % $28,964, % 3b. Farm Land (Qualified) % $2,860, % 4a. Commercial % $224,113, % 4b. Industrial % $560,981, % 4c. Apartments % $622, % Total Tax Base (Land + Improvements) 1, % $ 1,530,520, % Sources: New Jersey Department of Community Affairs, Property Tax information, Cranbury, NJ 2014; Phillips Preiss Grygiel LLC. 1 This report uses 2014 figures for the breakdown of the tax base by property classification and the breakdown of the tax rate, as well as the 2014 equalization ratio because not all of these rates have been updated for P h i l l i p s P r e i s s G r y g i e l L L C

7 Table 2: Property Class Share of Parcels and Assessed Value Township of Cranbury, 2014 Property Class Parcels Assessed Valuation Share of the Tax Base Non-Residential % $785,094, % 30.3% Residential 1, % $703,426, % 61.4% Vacant % $10,174, % 2.5% Farm % $31,824, % 5.8% Total % $1,530,520, % 100.0% Sources: New Jersey Department of Community Affairs, Property Tax information, Cranbury, NJ 2014; Phillips Preiss Grygiel LLC. **Non-Residential = Commercial + Industrial; Residential = Residential + Apartment; Farm = Homestead + Farmland A breakdown of Cranbury Township s property tax rate by local and county portions is provided in Table 3. The total tax levy on real property is $1.905 per $100 of assessed value, with the local portion of the tax rate (i.e., municipal and school portions) accounting for 79 percent of the total, with the balance attributable to Middlesex County (21 percent). Approximately 31 percent of the local tax levy is apportioned for municipal purposes, and the rest goes to the local school district. Table 3: Breakdown of the Tax Rate Township of Cranbury, 2014 Tax Rate Per $100 of Assessed Valuation Municipal General Purposes 0.406/100 Municipal Open Space Tax 0.020/100 Municipal Library Tax 0.034/100 District School Tax 1.039/100 County Tax 0.375/100 County Open Space Tax 0.031/100 Total Tax Rate $1.905/100 Sources: New Jersey Department of Community Affairs, Property Tax information, Cranbury, NJ 2014; Phillips Preiss Grygiel LLC. 3.2 EXISTING PROPERTY TAX REVENUES GENERATED BY SUBJECT PROPERTY The proposed project site will be on Block 20.16, Lots 7-10 and 20 as well as Block 19, Lots 2-4. The proposed mixed-use (retail + 12 apartment units) portion of the project will be constructed on the northern quarter of the site along Old Trenton Road (County Route 535). The townhome development, park area and stormwater management basin will take up the remaining three quarters just south of the mixeduse portion. The proposed project site is currently occupied by a former 1 story industrial building, two 2-story single family dwellings, a 1 story single family dwelling and a 1-2 story retail/residential building. According to municipal tax records for 2014, Block 20.16, Lots 7-10 and 20 as well as Block 19, Lots 2-4, have a total 4 P h i l l i p s P r e i s s G r y g i e l L L C

8 assessed value of approximately $2.75 million (Table 4). Of that $2.75 million approximately $1.2 million is attributed to buildings on the various parcels, except for Block lot 20 which is vacant land. Table 4 and 5 show the property tax revenues currently generated by the project site (based on 2014 assessments) to be approximately $52,000. Table 4: Annual Property Tax Revenues from Existing Development: Block 20.16, Lot 7-10 and Lot 20; and Block 19, Lot 2-4 Township of Cranbury, 2014 Block Lot Value Taxes $770, $14, $212, $4, $197, $3, $188, $3, $311, $5, $1,073, $20, Total $2,753, $52, Source: New Jersey Department of the Treasury, Division of Taxation, Cranbury, NJ. Table 5: Breakdown of Annual Property Tax Revenues from Existing Development on Block 20.16, Lots 7-10 and Lot 20; and Block 19, Lots 2-4 Assessed Value 2014 Tax Rate (per $100) of Existing Development Annual Tax Revenues 0.406/100 Municipal and Local Purpose Tax $2,753, $ 11, /100 Municipal Open Space Tax $2,753, $ /100 Municipal Library Tax $2,753, $ /100 District School Tax $2,753, $ 28, /100 County Tax $2,753, $ 10, /100 County Open Space Tax $2,753, $ Total $1.905/100 $2,753, $ 52, Sources: New Jersey Department of Community Affairs; State of New Jersey Department of the Treasury Division of Taxation, Cranbury, NJ; Phillips Preiss Grygiel LLC. 3.3 FISCAL IMPACTS In order to compare the expected revenues to be generated from the proposed mixed-use development with the anticipated municipal service costs, a fiscal impact analysis was undertaken utilizing the so- 5 P h i l l i p s P r e i s s G r y g i e l L L C

9 called Per Capita method. This methodology is an average costing approach used to project the impact of residential and nonresidential development on local costs and revenues Estimated Project Revenues The total estimated value of the proposed development would be $44.6 million (see Table 6). This figure is based on the following estimates for sale and monthly rental price: $650,000 sale price per townhome; $275,000 annual rent for the 12,000 square foot Pharmacy with a NNN lease; rent of $25 per square foot for the 5,000 square foot bank; rent of $20 per square foot for the 12,250 square feet of retail in the mixed use building; $1,6000 monthly rent for each of the 5 two-bedroom market rate apartment units; $984 monthly rent for the one bedroom low-income unit; $1,181 monthly rent for the two bedroom low-income units; and $1,365 monthly rent for the three bedroom low-income units. The affordable units rents were based on an assumption that all units would be rented to tenants at 50% of median income. Also, the cost of surface parking spaces is assumed to be accounted for in the proposed development s market value. Table 6: Market Value of the Proposed Mixed-Use Development Township of Cranbury Proposed Development Amount Annual Revenues 2 Construction Sale Price/ Annual NOI 3 Market Value 4 Townhouse Units 54 units $650,000/ unit $ 35,100, Pharmacy Space (NNN lease) 12,000 square feet Bank Space 5,000 square feet Mixed-Use Space ----Ground Floor Retail 12,250 square feet ----Apartments 12 units $275,000.00/ year $275, $3,928, $125, $25/ square foot $245, $20/square foot $87, $1,250, $171, $2,450, Market Rate 5 units $96, $62, $891, Units (2 BR Units) $1,600/month COAH Units 7 units BR Units 1 unit $11, $7, $109, $984/month BR Units 4 units $56, $36, $526, $1,181/ month BR Units 2 units $32, $1,365/month $21, $304, Total Market Value Initial Phase $44,560, Source: Phillips Preiss Grygiel LLC; The COAH Proposed Third Round Rules recognized employment multipliers published in December The market and assessed values of the residential portion are derived from average expected sales prices of the residential units 3 NOI was derived from subtracting the operating income from the annual revenues. It was assumed that residential operating expenses would be 35% of annual revenues and 30% of non-residential annual revenues. 4 Market value was derived from applying a 7% CAP rate to the NOI. 6 P h i l l i p s P r e i s s G r y g i e l L L C

10 The current equalization ratio is percent. In other words, in the tax year 2014 the assessed value of the proposed project (i.e., $43,923,022.94) is slightly higher than its market value (i.e., $44,560,234.29) as seen in Table 7. Table 7: Estimated Assessed Value of the Proposed Mixed-Use Development Market Value (7% CAP rate applied to NOI) Current Equalization Ratio Initial Phase Assessed Value Proposed Development $44,560, x 98.57% = $43,923, Sources: New Jersey Department of the Treasure, Division of Taxation; Phillips Preiss Grygiel LLC. Based on the Township s current tax rate, the annual property tax revenue to be generated by the proposed development is estimated to be approximately $837,000, of which over half, or over $456,000 a year, would accrue to the local school district (see Table 8). Nearly $202,000 per year would be added to the Township of Cranbury s municipal coffers. Additionally, over $178,000 would accrue to Middlesex County on an annual basis. Overall, the proposed mixed-use development will generate over $784,000 more in property tax revenues than the site s existing use. Table 8: Breakdown of Annual Property Tax Revenues To Be Generated by the Proposed Mixed-Use Development 2014 Tax Description of Tax Rate (per $100) Assessed Value Annual Tax Revenues Municipal Local Purpose Tax 0.406/100 $43,923, $178, Municipal Open Space Tax 0.020/100 $43,923, $8, Municipal Library Tax.034/100 $43,923, $14, District School Tax 1.039/100 $43,923, $456, County Tax 0.375/100 $43,923, $164, County Open Space Tax 0.031/100 $43,923, $13, Total $1.905/100 $48,407, $836, Sources: New Jersey Department of Community Affairs 2014 tax ratables data; Phillips Preiss Grygiel LLC Estimated Municipal and School District Expenditures The current level of municipal expenditures in Cranbury is approximately $10.9 million. 5 It should be noted that only about 62 percent of the Township s general revenues are generated by local property taxes (i.e., of the $10.9 million in municipal expenditures, about $6.7 million originates from property taxes). The remaining $4.1 million comes from a variety of additional municipal and other governmental sources. Since non-residential property accounts for 30 percent of the total tax base 6, it is estimated 5 Township of Cranbury, Middlesex County 2014 Budget: Line Item #7 Total General Revenues: $10,860, For the purposes of calculations this number was used to calculate projected municipal costs. 6 The percentages of non-residential properties by number and assessed valuation listed in Table 1 have been averaged to arrive at this figure. 7 P h i l l i p s P r e i s s G r y g i e l L L C

11 that about $2 million in tax-supported municipal expenditures can be attributed to non-residential uses. With total employment in the municipality at 10,880 employees, 7 we can assume that the municipal cost per employee is approximately $ Meanwhile, residential property accounts for 61 percent of the total tax base, such that approximately $4.1 million of the municipal budget are tax-supported costs attributed to residential uses. As of 2013, Cranbury had a residential population of 3, We can assume, therefore, that the municipal cost per resident is approximately $1, (see Table 9). Therefore, the additional residents and employees generated in the proposed mixed-use development can be estimated to cost tax payers an additional $1,124 per resident and $188 per employee. Table 9: Breakdown of Non-Residential and Residential Per Capita Costs, Township of Cranbury Property Class Share of Tax Base Expenditures Number of People Per Capita Cost Non-Residential 30.3% $2,046, ,880 Employees $ Residential 61.4% $4,145, ,689 Residents $1, Vacant 2.5% $166, Farm 5.8% $388, Sources: U.S. Census Bureau 2013 ACS 5-year estimates; New Jersey Department of Labor and Workforce Development 2013 average employment; New Jersey Department of Community Affairs 2014 tax ratables data; Phillips Preiss Grygiel LLC. According to the New Jersey Department of Education, the budgeted per pupil cost for academic year was $16, The New Jersey Department of Education s New Jersey Taxpayer s Guide to Education Spending also reports that 90.5% of the local school district budget is derived from local property taxes (Table 10). Therefore, 90.5% of the per pupil cost ($15,092.69) is generated from local property taxes. In other words, the additional school children the proposed development would add to the school district would cost tax payers an additional $15, per child. Table 10: School Spending in the Academic Year: Cranbury School District Budgeted per pupil Cost $16, Average Daily Enrollment Revenues from local taxes 90.5% Budgeted Cost per Pupil covered by property taxes $15, Source: New Jersey Department of Education, New Jersey Taxpayer s Guide to Education Spending, Township of Cranbury, NJ, New Jersey Department of Labor and Workforce Development 2013 average employment. 8 For the purpose of calculations, the actual quotient of $ was used. 9 U.S. Census Bureau, year Population Estimates. 10 For the purposes of calculations, the actual quotient of $1, was used. 11 For the purposes of calculations, the actual quotient of $15, was used 8 P h i l l i p s P r e i s s G r y g i e l L L C

12 Residential Development The residential portion of the development consists of 54 three-bedroom townhouse units and 12 apartment units in the mixed-use building (5 market rate apartment units and 7 affordable units ranging from 1-3 bedrooms). There will be 24 surface parking spaces servicing the 12 apartments. The 54 townhouses will have 189 garage/drive parking spaces and an additional 37 visitor surface parking spaces. The townhome development incorporates the 19,500 square foot stormwater management basin and the 34,500 square feet of park area. In order to estimate the number of residents and public school children the proposed mixed-use development would add to the township and the local school district, Rutgers University s Who Lives in New Jersey Residential multipliers for the central region and statewide low-moderate income unit multipliers were utilized. Based on the unit type distribution it is estimated that the proposed residential development will generate 152 residents and 17 school children. Table 11: Estimated Residents Generated by the Proposed Mixed-Use Development Building/Unit Type Multiplier Total Units Total Residents SF Attached 2-3 BR Units, 2-3 BR Low-Moderate Income Unit BR Low-Moderate Income Unit BR Low-Moderate Income Unit BR Total Source: Rutgers University s Who Lives in New Jersey Residential Multipliers Central Region for market rate units and state-wide multipliers for LMI units: 2006; Phillips Preiss Grygiel LLC. Table 12: Estimated Public School Children Generated by The Proposed Mixed-Use Development Building/Unit Type Multiplier Total Units Total School Children SF Attached 2-3 BR Units, 2-3 BR Low-Moderate Income Unit BR Low-Moderate Income Unit BR Low-Moderate Income Unit BR Total Source: Rutgers University s Who Lives in New Jersey Residential Multipliers: 2006; Phillips Preiss Grygiel 9 P h i l l i p s P r e i s s G r y g i e l L L C

13 Non-Residential Development The non-residential development consists of a mixed-use building with 12,250 square feet of retail space; a 12,000 square foot pharmacy; and a 5,000 square foot bank. There will be 102 surface parking spaces. It is anticipated that the proposed development would bring approximately 50 workers to the site. This number is derived from ratios published in the Proposed Third Round Rules by the New Jersey Council on Affordable Housing in December 2007 (See Table 13). COAH Use Group Use Table 13: Estimated New Jobs to be Generated by The Proposed Mixed-Use Development Size (sq ft) Estimated job creation (per 1,000 sq ft) 12 Total New Jobs M Retail 12, M Pharmacy 12, M Bank 5, Total 50 Jobs Source: NJ Department of Community Affairs, COAH Proposed Third Round Rules: December 2007 Given the anticipated 50 new employees that would be generated from the combination of the retail space, pharmacy and bank (see Table 10), tax-supported municipal costs from the non-residential portion of the proposed mixed-use development can be expected to increase by about $9,486 (see Table 14). In addition, tax-supported municipal costs would increase by $170,829 annually as a result of the proposed development s 152 residents (Table 14). The school district costs for a public school child yield of 17, would increase the tax-supported local school district costs by $256,575 (Table 14). Table 14: Estimated Annual Municipal Expenditures To Be Generated by the Proposed Development Annual Municipal Expenditure Per Capita 13 Number of Employees Expected from Project Annual Municipal Costs Tax-Supported Municipal Costs for Non-Residential Development $188 x 50 = $9, Annual Municipal Expenditure Per Capita 14 Number of Residents Expected from Project Annual Municipal Costs Tax-Supported Costs for Residential Development $1,124 x 152 = $170, These ratios are listed in Appendix D of the Proposed Third Round Rules. 13 The actual employee cost of $189.73was used to calculate non-residential costs. 14 The actual residential cost of $1, was used to calculate non-residential costs. 10 P h i l l i p s P r e i s s G r y g i e l L L C

14 Tax-Supported Total Municipal Costs $180, Annual School Expenditure Per pupil 15 Number of Residents Expected from Project Annual School District Costs Tax-Supported School District Costs for Residential Development $15,093 x 17 = $ 256, Sources: Township of Cranbury s Tax Assessor s Office; New Jersey Department of Labor and Workforce Development; New Jersey State Department of Community Affairs; U.S. Census Bureau, 2013 ACS 5 year Population Estimates; Phillips Preiss Grygiel LLC Summary of Cost-Revenue Analysis for the Township of Cranbury As illustrated in Table 15, the proposed mixed-use development would generate more local revenues than costs. The Township would receive approximately $658,400 per year in tax revenue for municipal and local school districts purposes, while its annual tax-supported municipal and school district costs would increase by approximately $436,892. Table 15: Summary of Cost-Revenue Analysis for the Township of Cranbury Proposed Mixed-Use Development Annual Tax Revenues Generated Annual Service Costs Net Annual Surplus (+) or Deficit (-) Municipal Local Purpose Tax 16 $202, ($180,234.01) $21, District School Tax $456, ($256,575.65) $199, Total Tax Revenues/ Municipal Costs to Municipality/Schools (County figures excluded) $658, ($436,809.65) $221, Sources: Township of Cranbury s Tax Assessor s Office; New Jersey State Department of Community Affairs; Phillips Preiss Grygiel LLC. 15 The actual per pupil cost of $15, was used to calculate school district pupil costs. 16 Municipal Local Purpose Tax includes open space and library revenues and municipal annual service costs include residential and non-residential purposes. 11 P h i l l i p s P r e i s s G r y g i e l L L C

15 4.0 CONCLUSIONS The foregoing report was prepared in order to assess the fiscal impacts associated with the proposed mixed-use development within the Cranbury High Point Redevelopment Area, in the Township of Cranbury, New Jersey. As described, the proposed mixed-use development would produce a net annual tax surplus. The net annual tax surplus to the municipality and local school district would be approximately $221,600 covering all of the estimated tax-supported costs to be generated by the proposed development. 12 P h i l l i p s P r e i s s G r y g i e l L L C