Economic Impact Report Maguire Family of Dealerships City of Ithaca Renovation & Expansion January 29, 2016 The Maguire Family of Dealerships is a local, second generation company established in 1977 in Trumansburg, Maguire is the #1 retailer and generator of sales tax in Tompkins County. The family owned company has 426 employees, placing them as the eleventh largest employer in Tompkins County. The Maguire Family of Dealerships proposes an $18M investment in the City of Ithaca that will upgrade existing facilities and build a new facility to meet increasing quality standards set by the vehicle manufacturers. The reinvestment is critical to maintain existing levels of business and meet increasing demand. The project will be rolled out in phases over the next three years consisting of: • Phase I (2016) – a $12M investment relocating Maguire Ford Lincoln Nissan from 504 S. Meadow Street to a new, LEED Gold certified building at Carpenter Business Park. This a 8.4 acre vacant parcel that currently generates only $19,296 in annual property tax revenue for the City. • Phase II (2017) – a $5M renovation and upgrade to 504 S. Meadow Street and relocating Maguire Hyundai Subaru from 320 Elmira Rd. • Phase III (2018) – a $1M renovation and upgrade to 320 Elmira Rd. to expand the Maguire Chrysler Dodge Jeep Ram Fiat located on an adjacent parcel This report evaluates the following net new economic impacts: • • • New property tax revenues New sales tax revenues from service department and vehicle sales New jobs, new income and multiplier effect of creating direct jobs at Maguire This analysis considers the new construction at the Carpenter Park site and renovation of two existing facilities, all located in the City of Ithaca. The impact analysis considers projected incremental growth in business at all three locations. Maguire provided all sales and employment figures. Projections were estimated by TCAD. Any additional information supplied is noted in the document. SUMMARY OF ECONOMIC IMPACTS (ANNUALLY) Phase I – Carpenter Park Property Tax (City) $77,340 Sales Tax (City) $178,319 New Jobs 31 New Wages $1,335,450 Phase II – 504 S. Meadow $32,225 $158,506 27 $1,175,196 Phase III – 320 Elmira Rd. $6,445 $99,066 12 $534,180 $116,010 $435,890 70 $3,044,826 TOTAL * Assumptions are detailed at the end of document Mission: TCAD is dedicated to building a thriving and sustainable economy that improves the quality of life in Tompkins County by fostering the growth of business and employment. 1 Economic Impact Report Maguire Family of Dealerships City of Ithaca Renovation & Expansion January 29, 2016 OTHER COMMUNITY AND ECONOMIC BENEFITS • Development of an underutilized site that is constrained by existing energy substation and overhead power lines • Complimentary parking for community gardens and Ithaca Farmer’s Market • Maguire has a track record with commitment to renewable energy and green design. Significant items planned for Carpenter Park site include: - Green roof and lake viewing observation deck - Rain water recycling - Solar charging station - Impervious pavement planned in areas suitable for installation - Aesthetic design with significant tree plantings • Increases Maguire partnership with Challenge Workforce Solutions to provide job opportunities to persons with barriers to employment. • Expands opportunities for company funded training and advancement • Increases sales to adjacent businesses via supply chain and employee purchases DETAILED ANALYSIS AND ASSUMPTIONS Property Tax Revenue The developer projects an $18M investment. Based on TCAD’s experience with other IDA projects, the increase in assessment is usually about half of he construction cost. Therefore we estimated the increase in assessment at $9M. These projections reflect the increase in assessment only. The current land and/or building value associated with all three parcels located in the City of Ithaca (Carpenter Park, 504 S. Meadow, and 320 Elmira Rd.) are not evaluated. Property tax generation for $9M net new assessed value (Annually) Investment New Value Tax Rate City County School 12.89 /1,000 6.734093/ 1,000 18.1611 /1,000 TOTAL Phase I – Carpenter Park $12M $6M $77,340 $40,405 $108,967 $226,711 Phase II – 504 S. Meadow $5M $2.5M $32,225 $16,835 $45,403 $94,463 Phase III – 320 Elmira Rd. $1M $.5M $6,445 $3,367 $9,081 $18,893 TOTAL $18M $9M $116,010 $60,607 $163,450 $340,067 Mission: TCAD is dedicated to building a thriving and sustainable economy that improves the quality of life in Tompkins County by fostering the growth of business and employment. 2 Economic Impact Report Maguire Family of Dealerships City of Ithaca Renovation & Expansion January 29, 2016 Retail Sales Tax Revenue a. Sales tax formula The formula for retail sales tax distribution of County sales tax revenue is quite complex. Rick Snyder, the County Director of Finance provided a full page diagram of the sales tax distribution. However, he suggested using the actual distribution ratio in 2015 for the City of Ithaca would be the most realistic approach to estimating the distribution of new sales tax revenue generated by the Maguire project. In 2015, the total tax receipts in the County (4% of the purchase price) were $59,350,643. The distribution is as follows: • • • County: $33,385,002 (or 56.3%) City of Ithaca: $12,419,075 (or 20.9%) All town/villages: $13,546,566 (or 22.8%) It is reasonable to assume the City of Ithaca gets about 1/5 (or 20.9%) of the 4% sales tax revenue. b. Revenues subject to sales tax Vehicle sales tax revenue is distributed to the county of the purchaser, so for example, if someone from Broome County purchases a vehicle in Tompkins County, the sales tax is distributed to Broome County. Maguire provided an estimate of 70% of vehicle sales to Tompkins County residents, which is based on historical vehicle sales revenue. Sales tax generation for new revenues as a result of expansion (Annually) Phase I – Carpenter Park Revenue Subject to Sales Tax $21,330,000 Local Sales Tax (4%) $853,200 City Sales Tax (20.9%) $178,319 Phase II – 504 S. Meadow $18,960,000 $758,400 $158,506 Phase III – 320 Elmira Rd. $11,850,000 $474,000 $99,066 $52,140,000 $2,085,600 $435,890 TOTAL Jobs and Wages With the new development, Maguire will increase its employment by 57. These jobs will pay an average annual wage of $44,300 (provided by Maguire), generating a total of $2,525,100 of new income. Maguire’s expansion will create other work locally for their suppliers and their new employees will spend their income locally. Both of these increases in economic activity generate a multiplier effect, creating new jobs and income beyond the direct increases at Maguire. A multiplier of 1.235 (IMPLAN Tompkins County 2012; Retail Stores: Motor Vehicle and Parts) was used to estimate an additional 13 jobs with an average wage of $38,800, resulting in a total of $519,726. The combined direct and indirect jobs total 70 new jobs with new income of $3,044,826. Mission: TCAD is dedicated to building a thriving and sustainable economy that improves the quality of life in Tompkins County by fostering the growth of business and employment. 3 Economic Impact Report Maguire Family of Dealerships City of Ithaca Renovation & Expansion January 29, 2016 New jobs and annual wages Phase I – Carpenter Park Direct Jobs 25 Direct Wages ($44,300) $1,107,500 Multiplier Jobs (1.235) 6 Multiplier Wages ($38,800) $227,950 Total Jobs 31 Total Wages $1,335,450 Phase II – 504 S. Meadow 22 $974,600 5 $200,596 27 $1,175,196 Phase III – 320 Elmira Rd. 10 $443,000 2 $91,180 12 $534,180 57 $2,525,100 13 $519,726 70.395 $3,044,826 TOTAL Mission: TCAD is dedicated to building a thriving and sustainable economy that improves the quality of life in Tompkins County by fostering the growth of business and employment. 4