Draft - 1/29/201 6 4:20 PM BURKE-GILMAN TRAIL MISSING LINK SEPA Draft EnvironmentalImpact Statement Economic DisciplineReport Preparedfor DATE Seattle Departmentof Transportation Insert Photo Note we will be changing the cover sheet to be in the SDOT format, ESA coversheet a placeholder. PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 TABLE OF CONTENTS 2 Table of Contents ...........................................................................................................................................I 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 Abbreviations ...............................................................................................................................................III Executive Summary....................................................................................................................................... v Introduction .............................................................................................................................................. v Chapter 1: Introduction and Project History..........................................................................................1-1 1.1 Introduction to the Project ........................................................................................................1-1 1.2 No Build Alternative ...................................................................................................................1-1 1.3 Build Alternatives .......................................................................................................................1-1 1.3.1 1.3.2 1.3.3 1.3.4 1.3.5 1.4 Shilshole South Alternative ................................................................................................................ 1-1 Shilshole North Alternative ................................................................................................................ 1-1 Ballard Avenue Alternative ................................................................................................................ 1-1 Leary Alternative ................................................................................................................................ 1-1 Connector Segments.......................................................................................................................... 1-1 Construction Methods for the Build Alternatives ......................................................................1-1 1.4.1 1.4.2 Construction Activities and Durations ............................................................................................... 1-1 Construction Traffic and Haul Routes ................................................................................................ 1-1 Chapter 2: Methodology ........................................................................................................................2-1 2.1 Data Collection ...........................................................................................................................2-1 2.2 Selection of Study Area ..............................................................................................................2-1 2.3 Identification of Impacts ............................................................................................................2-2 2.4 Identification of Avoidance, Minimization, and Mitigation Measures ...................................... 2-2 2.5 Cumulative Impacts and Mitigation Measures Analysis ............................................................ 2-2 Chapter 3: Affected Environment ..........................................................................................................3-1 3.1 Selected Study Area ...................................................................................................................3-1 3.2 Existing Land Use Conditions......................................................................................................3-3 3.2.1 3.2.2 Acreage and Percentage Land use ..................................................................................................... 3-5 Most Valuable Parcels........................................................................................................................ 3-6 3.3 Occupancy and Rent...................................................................................................................3-9 3.4 Employment Conditions ...........................................................................................................3-10 3.5 Taxable Retail Sales ..................................................................................................................3-12 Chapter 4: Potential Impacts .................................................................................................................4-1 4.1 No Build Alternative ...................................................................................................................4-1 4.1.1 4.2 Operation ........................................................................................................................................... 4-1 Impacts Common to all Build Alternatives .................................................................................4-3 4.2.1 Construction ...................................................................................................................................... 4-3 4.2.2 Operation ........................................................................................................................................... 4-3 4.2.2.1 Single-family Residences ............................................................................................................... 4-5 4.2.2.2 Multi-family Residences ................................................................................................................ 4-6 4.2.2.3 Commercial Properties ................................................................................................................. 4-6 4.2.2.4 Mixed-Use Properties ................................................................................................................... 4-7 4.2.2.5 Parking Facilities............................................................................................................................ 4-8 4.2.2.6 Industrial and Warehouse Properties ........................................................................................... 4-8 4.2.2.7 Institutional Properties ............................................................................................................... 4-11 4.2.2.8 Vacant Properties........................................................................................................................ 4-11 BURKE-GILMAN TRAIL MISSING LINK I JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 4.2.2.9 4.3 4.3.1 4.4 Operation ......................................................................................................................................... 4-15 Ballard Avenue Alternative ......................................................................................................4-19 4.5.1 4.6 Operation ......................................................................................................................................... 4-11 Shilshole North Alternative ......................................................................................................4-15 4.4.1 4.5 Study Area Parking Supply .......................................................................................................... 4-11 Shilshole South Alternative ......................................................................................................4-11 Operation ......................................................................................................................................... 4-19 Leary Alternative ......................................................................................................................4-23 4.6.1 Operation ......................................................................................................................................... 4-23 Chapter 5: Avoidance, Minimization, and Mitigation Measures ...........................................................5-1 5.1 Measures Common to All Build Alternatives .............................................................................5-1 5.1.1 5.1.2 Construction ...................................................................................................................................... 5-1 Operation ........................................................................................................................................... 5-1 Chapter 6: Cumulative Impacts..............................................................................................................6-1 Chapter 7: Chapter 8: References ............................................................................................................................7-1 List of PreparersAppendices.................................................................................................8-1 18 II JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 ABBREVIATIONS 2 ADA Americans with Disabilities Act 3 BNSF BNSF Railway 4 CSO combined sewer overflow 5 dBA A-weighted decibel 6 EPA U.S. Environmental Protection Agency 7 ESA Endangered Species Act 8 EIS 9 FHWA Federal Highway Administration 10 NMFS National Marine Fisheries Service 11 PHS Priority Habitats and Species 12 RCW Revised Code of Washington 13 SDOT Seattle Department of Transportation 14 SEPA State Environmental Policy Act 15 SMC Seattle Municipal Code 16 SMP Shoreline Master Program 17 SR 18 USFWS U.S. Fish and Wildlife Service 19 WAC Washington Administrative Code 20 WDFW Washington Department of Fish and Wildlife 21 WDNR Washington State Department of Natural Resources 22 WSDOT Washington State Department of Transportation 23 USACE U.S. Army Corps of Engineers environmental impact statement State Route 24 BURKE-GILMAN TRAIL MISSING LINK III JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 EXECUTIVE SUMMARY 2 Introduction 3 To be developed 4 BURKE-GILMAN TRAIL MISSING LINK V JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Chapter 1: INTRODUCTION AND PROJECT HISTORY Introduction to the Project 2 1.1 3 (To be provided by ESA) 4 1.2 5 (To be provided by ESA) 6 1.3 7 (To be provided by ESA) 8 1.3.1 Shilshole South Alternative 9 1.3.2 Shilshole North Alternative 10 1.3.3 Ballard Avenue Alternative 11 1.3.4 Leary Alternative 12 1.3.5 Connector Segments 13 1.4 14 (To be provided by ESA) 15 1.4.1 Construction Activities and Durations 16 1.4.2 Construction Traffic and Haul Routes No Build Alternative Build Alternatives Construction Methods for the Build Alternatives 17 BURKE-GILMAN TRAIL MISSING LINK 1-1 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT Chapter 2: 1 METHODOLOGY Data Collection 2 2.1 3 The Consultant collected several sources of data including: 4 5 6 7 8 9 10 11 12 13 14 / 15 2.2 16 17 18 19 20 21 22 In order to identify treatment effects from the construction of the Missing Link of the Burke-Gilman Trail, the first step was to determine the affected environment (i.e., what area around the build alternatives will be impacted?). Previous literature examining determinants of property values (a more easily measured value with implications for residential and commercial users) have found that the impact of proximity to transportation infrastructure dissipates after approximately 0.5 mile.1 The Consultant therefore treated businesses and residential properties in Ballard within 0.5 mile of the BGT as the primary affected environment for this analysis. 23 24 25 26 27 28 Secondly, in order to identify the treatment effects of the BGT construction in Ballard, the Consultant conducted a natural experiment to determine price effects of the mixed-use trails in other similar locations in the surrounding community. For this purpose, all land areas located along mixed-use trails in the City of Seattle and King County region served as the natural experiment study area. Appropriate controls and assumptions were implemented to ensure that estimates produced based upon other regions of the City of Seattle apply to properties located in Ballard. / / / / / Property sales and assessor data including attribute data for residential, commercial, retail and industrial land use Transportation data related to the typical expected delays at driveways and intersections, travel times, and traffic safety data related to existing conditions will be derived from the transportation alternatives screening analysis and Transportation Discipline Report. Data collected from the Land Use Discipline Report including building current use, zoning, and building characteristics. Previously collected business characteristic data including firm type and employment. Data collected through outreach efforts to local businesses and residents. This includes perceptions of the effect of the missing link construction, major concerns and anticipated benefits. Field observation to observe the four build alternatives and no build scenarios Selection of Study Area 1 See for instance Knaap, G.J., C. Ding, and L. D. Hopkins. (2001). “Do Plans Matter? The Effects of Light Rail Plans on Land Values in Station Areas.” Journal of Planning Education and Research 21: 32–39. Immergluck, Dan. (2009). “Large Redevelopment Initiatives, Housing Values and Gentrification: The Case of the Atlanta Beltline.” Urban Studies 46(8): 1723-1745. BURKE-GILMAN TRAIL MISSING LINK 2-1 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2.3 Identification of Impacts 2 3 4 5 6 7 8 9 10 11 12 The Consultant constructed an economic impact framework to assess how different properties, including those used for residential and commercial uses, might be impacted. This framework examines land value, rents, and costs of servicing land (e.g., delivery of goods, access of customers, labor access). This analysis was based upon a statistical and qualitative assessment of the four proposed build alternatives and connecting segments. In addition, to trail proximity, this analysis controls for structural differences in houses (lot size, number of bedrooms, etc.) and geographic characteristics (driving distance to Seattle central business district, zoning, waterfront property/frontage, neighborhood fixed effects, etc.). Alternative models were run with varying explanatory variables and restrictions based upon the location of the property (e.g., within the City of Seattle, versus all of King County), and the proximity of the parcel to the BGT. These alternative models help to ensure that conclusions are robust to variation in modeling assumptions and included explanatory variables. 13 14 15 16 17 18 19 20 The statistical portion of this analysis was conducted using a combination of statistical software packages such as Stata and R, as well as GIS bases software such as ArcGIS, for mapping applications. A hedonic model of property values was used to evaluate the impacts of the BGT on property values (hedonic models estimate the value of a good or service by breaking it down into identifiable characteristics through a regression analysis). An opportunity cost model of travel time was used to assess the value of travel-time savings based on transportation model outputs that identify travel times and reliability impacts. The findings from these analyses were used to identify type, direction, and rough magnitude of effects of the BGT siting alternatives and no build scenarios. 21 The economic effects described above fall into the following general categories: 22 23 24 25 26 27 28 29 / 30 2.4 / / Changes in use value or user costs of the facility or improvement (e.g., user benefits such as travel time savings) Changes in the value or cost of services to property (e.g., freight delivery, customer access, labor accessibility – these are typically the capitalization to land of the benefits to the users of the facility) Changes in amenity value of property adjacent to the improvement (these are the capitalization to land of a broader set of benefits not typically associated with using the transportation facility – e.g., views, proximity to attractive features of the urban environment) 31 Identification of Avoidance, Minimization, and Mitigation Measures 32 33 34 Mitigation proposed for transportation and land use impacts was discussed. The consultant identified affected parties that may be impacted by the BGT construction and variation in the impacts among the build alternatives. In coordination with SDOT, potential measures were suggested to reduce impacts. 35 2.5 36 37 38 39 The Consultant evaluated the cumulative impacts of the Missing Link and other actions and trends in the Ballard area on the local economy. This assessment included an evaluation of the cumulative impact of the construction of the BGT missing link on area property values, transportation access and risk, employment and the vitality of local businesses. Working with SDOT, it also considered the impact of Cumulative Impacts and Mitigation Measures Analysis 2-2 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 other large infrastructure and development projects that have been completed and that are known at this time. This analysis included quantitative and qualitative assessments of how the community is likely to change due to the BGT and, to the extent possible, distinguished between differences in expected impacts between different siting options. 5 BURKE-GILMAN TRAIL MISSING LINK 2-3 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT Chapter 3: 1 AFFECTED ENVIRONMENT 2 3 4 5 This chapter describes the affected environment for the economic analysis and proceeds by defining the geographic extent of the impacted environment as well as the 2015 existing land use and economic conditions. The 2015 conditions provide the baseline conditions to project how changes in trail configurations impact affected stakeholders. 6 3.1 Selected Study Area 7 8 9 10 11 Figure 3-1 provides a map of the affected environment and the location of the build alternatives within this area. The boundary of the build alternatives was defined by the actual trail alignments covering the area bounded by 32nd Ave NW to the west, NW 56th St/20th Ave NW/Leary Ave NW to the north, 11th Ave NW to the east, and Shilshole Ave NW/NW 45th St to the south. The project area includes all four of the build alternatives and associated connector segments. 12 13 14 15 16 17 18 19 20 The study area includes all parcels that are geographically near the build alternatives that may reasonably be expected to be impacted by the BGT Missing Link. A spatial buffer of 0.5 mile surrounding the build alternatives was used to define the boundary of the affected environment. A review of the previous literature related to the impact of transportation network improvements on property values finds that properties further than 0.5 mile from transportation infrastructure are statistically unaffected by its presence. The primary concern of this report is a study of the long-term impacts of the BGT Missing Link trail operation on the immediate economic environment. However, this report will also provide insight into potential short-term economic impacts from construction as well. The affected environment for both the construction and operational impacts are identical. 21 22 23 24 25 The study area extends north of the Leary Street and Market Street for 0.5 mile and south of Shilshole Avenue, but includes only those parcels on the northern side of the ship canal. Properties that are outside the study area on either the western or eastern sides are excluded, as these properties are assumed to already be served by existing BGT infrastructure.2 Water areas and right-of-ways that intersected in the affected environment were excluded for purposes of the economic analysis. 2 This assumption does not preclude some possible economic impacts to parcels geographically near the proposed build alternatives but outside the study area. However, in our estimation, these effects are likely to be minimal and dwarfed by impacts to parcels inside the study area. BURKE-GILMAN TRAIL MISSING LINK 3-1 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK Figure 3-1: Affected Environment with Build Alternatives PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 3-2 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT Existing Land Use Conditions 1 3.2 2 The existing conditions within the study area include 10 primary types. These include: / Commercial / Multi-family Residential / Parks / Industrial / Single-family Residential / Parking / Mixed Use / Government & institutional / Vacant 3 4 5 6 Data for the 2015 land use acreage and valuation estimates were collected from the King County Assessors office. Overall the affected environment consists of 458 acres included parcels to the north and south of the build alternatives. Figure 3-2 displays a map of land use in the study area for the land use classifications listed above. 7 8 9 For each land use type identified in the affected environment, economic impacts were evaluated by examining changes in use value or user costs of the facility or improvement, changes in the value or cost of services to property, and changes in amenity value of property adjacent to the improvement. BURKE-GILMAN TRAIL MISSING LINK 3-3 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK Figure 3-2: Existing Land Use in the Affected Environment PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 3-4 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 3.2.1 Acreage and Percentage Land use 2 Figure 3-2-1: Acres of Land by Land Use Type 3 4 Source: Puget Sound Regional Council 5 6 7 8 9 Figure 3-2-1 provides a breakdown of acreage by land use type. In the study area, the top four land uses include single-family homes (21.2%), commercial uses (20.0%), multi-family housing (18.0%) and industrial (14.0%), respectively. Together, these four land uses account for nearly three quarters of available land in the affected environment. 10 BURKE-GILMAN TRAIL MISSING LINK 3-5 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Value of Land 2 Figure 3-2-1: Assessed Parcel Value (in $100,000s) by Land Use Type 3 4 Source: Puget Sound Regional Council GIS 5 6 7 8 9 10 11 12 Figure 3-2-1 provides a breakdown of total value of parcels (as measured in assessed value), including both the land and structural value, by land use type. Note that due to a 2013 change to state law (RCW 84. 40.045 and 84.40.175) government owned properties are no longer assessed. As of 2015, the total assessed value of parcels in the study area was approximately $2.6 billion. The four land uses with the highest land values include multi-family homes ($622 million), commercial uses ($555 million), single-family homes ($427 million) and government and institutional uses ($2.73 million). Of the private land uses, mixed-use lands averaged the highest price per land square footage at $444, whereas single-family homes averaged the lowest price per square foot at $106. 13 3.2.2 Most Valuable Parcels 14 15 16 17 18 Figure 3-2-3 provides a map displaying the top 10 most valuable sites (as measured in total assessed value) for each of the categories of commercial, industrial, mixed use, multi-family, and institutional lands. The Swedish Medical Center is the most valuable parcel by assessed value at $46,181,900 in 2015. The top 10 properties by assessed value represented 27.5%, 33.8%, 59.9% and 18.4% of the total assessed value of commercial, industrial, mixed use and multi-family parcels. 3-6 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK 1 2 BURKE-GILMAN TRAIL MISSING LINK Figure 3-2-3: Most Valuable Business by 2015 Total Assessed Value PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 3-7 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT Occupancy and Rent 1 3.3 2 3 4 5 6 Occupancy and rent data for the region were acquired from Costar data sources which track rent and vacancy rates for industrial, multi-family, office and retail land uses based upon quarterly survey data (Costar, 2015). These data are available from 2001 to the present for all land uses except retail, which is available starting in 2006. For each land use, we summarize mean rental price, which is reported as dollars per structural square foot per month and vacancy rates over time in Figures 3-3-1 and 3-3-2. 7 8 9 10 Figure 3-3-1: Rental Rate ($ per sq ft per month) for the Study Area by Land Use Source: Costar Realty Information 11 BURKE-GILMAN TRAIL MISSING LINK 3-9 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Figure 3-3-2: Vacancy Rate for the Study Area by Land Use 2 3 Source: Costar Realty Information 4 5 6 7 8 9 10 On a rent per square foot of leasable area basis, retail and office land uses command the largest premium at approximately $30 and $25 per square foot per month in 2015, respectively. On the lower end, industrial and multi-family rents averaged approximately $9 and $1.50 per square foot, respectively, in 2015. Despite the relatively lower returns per square foot for multi-family properties compared to other land uses, year over year growth in rental rates have been strongest for these properties. Rental rates have grown by an average of 4.4% per year, with growth rates of over 10% per year since 2010. 11 12 13 14 15 16 The trends in vacancy are more volatile for most land uses. Both retail and office report a spike in vacancy in 2010, which also corresponds to a drop in rental rates, though recent trends in vacancy have been downward. Industrial lands average the lowest average vacancy rate over the sample time period and are near zero in 2014 (Costar, 2015). Multi-family vacancy rates have grown over time with a large increase reported in 2015. This increase, however, is most likely due to the addition of new units, which can often take several months to lease up to capacity (Costar, 2015). 17 3.4 18 19 20 21 22 23 24 25 Historical employment data for the region was collected from the Puget Sound Regional Council (PSRC) Covered Employment Estimates dataset from the year 2000 to 2014 (PSRC Covered Employment, 2014). Covered employees include most full- and part-time, private and government, wage and salary workers. It typically excludes workers paid primarily on a commission basis and the self-employed. These data are available at the census tract level and two census tracts, numbers 47 and 33, closely approximate the boundaries of the study area. Using these census tract boundaries we generated a time series of data regarding the count of employment by the construction, FIRE (finance, insurance and real estate), manufacturing, retail, services, WTU (wholesale trade, transportation, and utilities), Employment Conditions 3-10 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 government and education industries. We then scaled these counts by the land acreage of each census tract to produce an estimate of the density of jobs over time. 3 Figure 3-4-1: Employment Density by Industry in the Study Area 4 5 Source: PSRC Covered Employment Estimates, 2014 6 Figure 3-4-2: Employment Shares by Industry in the Study Area 7 8 Source: PSRC Covered Employment Estimates, 2014 BURKE-GILMAN TRAIL MISSING LINK 3-11 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 6 7 8 Figure 3-4-1 and 3-4-2 present the density of jobs and employment shares by industry in the study area. In 2015, the job density in the overall affected environment was approximately 16.3 jobs per acre, an increase of nearly 43.9% over 2000 levels. The four largest employing industries in 2015 were services (55%), manufacturing (14.2%), retail (11.6%) and construction (4.4%). Between 2000 and 2014 the services sector has seen the largest gain in employment, with an increase in employment share of 18.3% and an increase in job density by 4.8 jobs per acre. By contrast, during the same timeframe, manufacturing employment has decreased both as a share of total employment (-7.5%) and per acre (-0.15 jobs per acre) (PSRC Covered Employment, 2014). 9 3.5 10 11 12 13 14 15 16 17 18 Taxable Retail Sales Taxable retail sales are tracked by the Washington State Department of Revenue for the Ballard region. Table 4-5 displays taxable retails sales from 2010 – 2013. Taxable retail sales are recorded at the point of sale. Some industries, such as retail and service, may be predominantly selling products, whereas, other industries, such as manufacturing, may predominantly be buying products. For most industry types the value of goods and services sold in Ballard has increased from 2010 to 2013. The largest valued industries by retail sales over this time period is the retail and services industry, which average $155 million and $131 million in annual retail sales, respectively. The highest growth industry during this period was the FIRE industry, which recorded a 271% increase in retail sales from 2010 to 2013 (Washington State Department of Revenue). 19 20 21 Table 4-5: Taxable Retail Sales by Industry (2010 – 2013) Year Construction FIRE Manufacturing Retail Services WTU 2010 $21,518,311 $1,185,629 $15,990,209 $144,958,858 $115,614,719 $8,032,392 2011 $15,453,296 $1,883,399 $14,827,022 $145,061,824 $107,544,274 $8,676,526 2012 $15,041,191 $2,854,635 $18,030,007 $160,194,264 $143,823,588 $11,032,262 2013 $18,370,267 $4,399,538 $20,313,355 $170,157,911 $157,904,993 $13,477,614 Source: Washington State Department of Revenue 22 3-12 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT Chapter 4: 1 POTENTIAL IMPACTS No Build Alternative 2 4.1 3 4.1.1 Operation 4 5 6 7 8 9 10 11 12 13 The No Build Alternative scenario is treated as the baseline condition for purposes of analyzing the economic impacts of the construction of the Burke-Gilman Trail Missing link. Estimates of the current real estate value and business activity for the study area were based upon conditions as of 2015. It is anticipated that economic activity in the study region will continue to evolve over the short to medium time horizons, even in the absence of trail construction. The short time horizon is defined as 2015 to 2020 and the medium time horizon is 2015 to 2040. However, all scenario analysis discussed in the remaining sections are based upon a comparison of the change in economic conditions due to trail construction in the four build alternatives as if the trail were constructed in 2015. These economic impacts were then compared to the baseline conditions from the No Build Alternative and described in detail in the affected environment section. 14 Transportation Impacts 15 16 17 18 19 20 The impacts of the four build alternatives were calculated using an opportunity cost model of travel time. The affected environment selected to study the transportation impacts were identical to that used for the Transportation Discipline Report (Parametrix 2016a), which is discussed in Chapter 5. The study area for the Transportation Discipline Report is shown in Figure 5-3 in the Transportation Discipline Report. This figure provides a visual representation of the affected environment and the various study intersections, driveway turnouts, and peak day travel volume. 21 22 23 24 25 26 27 Transportation impacts under the No Build Alternative were assessed using estimates for the daily count of cars at each intersection and driveway and expected delay in 2040, from the Transportation Discipline report (Parametrix 2016a). The year 2040 traffic projections were estimated under the assumption that year over year traffic increases by approximately 0.6% per year. The expected traffic impacts were then derived by intersection per year and represent the total cost of delays, based upon an average time value of money estimate of $20 per hour. 3 Table 4-1 presents the expected annual cost of traffic delay by intersection and driveway studied in the Ballard Study region. 28 3 The average wage rate for the Seattle metropolitan region was approximately $28.43 in 2014 (BLS, 2014). We derived an effective value of time for 2040 by assuming that average real wages increase by approximately 1.3% per year and applying a standard assumption that the value of commuting time is equivalent to one-half the wage rate. BURKE-GILMAN TRAIL MISSING LINK 4-1 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Table 4-1: Expected Annual Cost of Traffic Delay for 2040 (No Build Alternative) Intersection/Driveway Traffic Control 2040 No Build PM Peak Hour Delay (total cost) NW Market St/28th Ave NW Signal $39,874 NM Market St/24th Ave NW Signal $389,766 NM Market St/Ballard Ave NW Pedestrian Half Signal $61,317 NW Market St/22nd Ave NW/Leary Ave NW Signal $299,898 15th Ave NW/NW Leary Way Southbound Off-Ramp Signal B $157,833 15th Ave NW/NW Leary Way Northbound Off-Ramp Signal E $489,250 NW Leary Way/14th Ave NW Signal $135,856 NW Leary Way/11th Ave NW Signal $552,719 11th Ave NW/NW 46th St Signal $189,797 11th Ave NW/NW 45th St Unsignalized $25,655 NW 46th St/Shilshole Ave NW Unsignalized $5,714 Shilshole Ave NW/NW 17th St Unsignalized $72,063 Leary Ave NW/20th Ave NW Unsignalized $31,355 NW 56th St/24th Ave NW Unsignalized $95,797 NW 54th St/Hiram M. Chittenden Locks Driveway $15,736 Shilshole Ave NW/Stimson Marina Driveway $41,432 Shilshole Ave NW/Salmon Bay Center Driveway $37,973 Shilshole Ave NW/Salmon Bay Sand and Gravel (north side) Driveway $18,566 Shilshole Ave NW/Salmon Bay Sand and Gravel (south side) Driveway $26,130 Shilshole Ave NW/Covich-Williams Chevron Driveway $16,452 Shilshole Ave NW/Salmon Bay Café Driveway $16,452 Shilshole Ave NW/Ballard Industrial Driveway $27,097 Ballard Ave NW/Ballard Industrial Driveway $7,742 Shilshole Ave NW/Ballard Mill Marina Driveway $26,130 2 3 4 5 The operational conditions under the No Build Alternative were assumed to be identical to current conditions. Hence, under the No Build Alternative, economic and land use conditions were assumed to be unchanged from those reported in 2015. 4-2 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 4.2 Impacts Common to all Build Alternatives 2 3 4 5 6 7 8 9 10 The construction of the Burke-Gilman Trail Missing Link will result in changes to accessibility, transportation patterns and infrastructure in the Ballard region of Seattle. The resultant changes in operation of the BGT are likely to induce alterations to the economic landscape of businesses and residents of Ballard. Some economic impacts will manifest in short run disruptions in business and commuting activity due to trail construction. Over the long run, once the trail becomes operational, the local economy will adapt to accommodate the presence of the trail. The operational impacts may entail some “winners”, those whose business and residents benefit from increased accessibility and pedestrian/bike traffic, as well as “losers”, those who are detrimentally impacted by the trail from congestion of existing activity with increased pedestrian/bike traffic. 11 12 13 14 15 16 17 The construction and operational impacts were assessed primarily based upon the present land use of parcels in the study area. Changes in the facility value, cost of services and amenity value from the presence of the trail will be capitalized into land values. Hence, the economic impacts of the BGT Missing Link were determined by examining the heterogeneous response by land use type (e.g. how the trail will differentially impact different types of land use). The balance of both short and long run costs depend upon two primary factors: 1) the ultimate location chosen for the construction of the BGT Missing Link and 2) the mix of land use in the Ballard study region. 18 19 20 21 22 23 In the following, we describe the methods used to estimate the construction and operational impacts of the BGT Missing Link, which are common to all the build alternatives. The analysis distinguishes the economic effects based upon the 2015 land use in the Ballard area, separated into seven categories: single-family residences, multi-family residences, commercial uses, mixed-uses (commercial and multi-family residential), industrial, vacant and institutional. For a breakdown of the distribution of these land uses in the study area, see Figure 4-2 in the affected environment section. 24 4.2.1 Construction 25 26 27 28 29 30 31 During construction of the BGT Missing Link, some parcels may experience significant disruption in operational activity. Significant disruptions are defined as those impacts which are likely to materially damage businesses due to the construction of the BGT Missing Link and for which mitigation measures are likely to be prohibitively costly or not completely remediative. Industrial properties may experience reduced or no access for deliveries during certain periods of the day. Retail properties may lack accessibility and due to construction, may be less attractive to potential customers. Residents and commuters passing through the region may experience delays in commutes due to lane closures. 32 4.2.2 Operation 33 34 35 36 37 38 39 The long-run operational impacts of the BGT Missing Link were assessed by evaluating how proximity to mixed-use trails in other areas of King County were capitalized into land values. Data has been collected for recent parcels sales from 2005 to 2015 and home attributes in King County, WA. We grouped these transactions into four distinct categories: single family residences, multi-family apartments, commercial uses and industrial uses. Once separated by land-use, these data were utilized to estimate hedonic pricing models to determine the effect that proximity to existing trail infrastructure has on property value from observed market transactions. 40 41 42 43 Hedonic pricing analysis is an econometric methodology used to statistically distinguish the value of product attributes from a composite good, such as housing, by examining variation in the determinants of market transactions. Appendix A provides an overview of the application of hedonic theory to analyzing housing market transactions. BURKE-GILMAN TRAIL MISSING LINK 4-3 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 The hedonic models were estimated separately by land use to allow a heterogeneous response to mixeduse trail. Appendix B describes the econometric model and the method used to identify the impact of proximity to mixed-use trail on property values and Appendix C provides the modeling results for each land use. The results of these models provide the expected direction and magnitude and statistical significance of the overall property price impacts from mixed-use trail proximity. 6 7 8 9 10 11 12 13 14 It should be noted that statistical significance is a concept distinct from significance of impacts for purposes of this Discipline Report. In statistics, something is statistically significant if the effect can be picked up with a particular statistical tool called a p-value. Because the impacts are predicted with some uncertainty, statistical significance indicates the likelihood that the property price impacts differs from zero. In other words, it is a way to for the analysts to feel confident that they have “discovered” the size and magnitude of the effect being studied; as opposed to the effect being purely statistical “noise”. Statistical significance is typically reported at the 95% and 99% level. The 95% level indicating a high degree of confidence that result is statistically different from zero and the 99% level indicates a very high degree of confidence. 15 16 17 18 Estimates predicted from the hedonic models were applied to the land use environment of the Ballard study area based upon the route selected from the various build alternatives. The total economic impacts were calculated for each land use type identified and for each build alternative, which were then compared to the baseline conditions of the No Build Alternative. 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 There are several important caveats pertinent to the interpretation of the predicted economic impacts of the BGT Missing Link operation. Firstly, the results predicted from the various hedonic models provide an overall magnitude for expected impacts but do not imply that the economic impacts will be uniformly positive or negative. Rather, the hedonic models provide an estimate of the expected net-impact by land use from trail operation with implicit understand that some uncertainty exists given the complexity and dynamism in land markets. The following subsections provide a more detailed look at the likely factors that may contribute to both positive and negative economic impacts by land use. Secondly, the hedonic models use data from existing mixed-use trails from around King County. Most of these trails have been operational for many years, if not decades and as a result the surrounding lands have adapted to the presence of the trail over this time. During this span of time local businesses have adapted their daily operational functions to accommodate the pedestrian and bike traffic on nearby trails. Some properties may have shifted land use in cases where existing operations were rendered unprofitable by the presence of nearby mixed-use trails. Results of the hedonic modeling exercise will be used to inform long-term estimates of the effect of the operation of the BGT Missing Link. 34 35 36 Table 4-2-2 shows the number of parcels by land use type that are located within one block of a proposed trail alternative. These parcels were identified where the distance from the alternative to the parcel was less than 200 feet, the typical length of a city block. 37 4-4 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Table 4-2-2: Land Use within One Block of Proposed Trail Alternative Shilshole South Alternative Shilshole North Alternative Ballard Alternative Leary Alternative Commercial 41 71 97 103 Industrial 47 58 64 51 Institutional, Govt, Military, School, Public 4 5 8 10 Mixed Use 6 9 17 14 Multi-Family Residential 1 8 26 11 12 10 9 5 Parking 2 6 13 17 Parks and Open Space 0 0 2 2 Single-Family Residential 0 1 7 1 Vacant 15 33 132 47 Total 128 201 375 261 Land Use Other 2 3 4.2.2.1 Single-family Residences 4 5 6 7 8 9 10 Based upon results of Table 2 in Appendix C, it is predicted that single-family homeowners in the Ballard study area will likely benefit from the operation of the BGT Missing Link. Holding other home attributes constant, on average, single-family homes situated closer to mixed-use trails tend to sell for higher prices than those located further from a mixed-use trail. For every tenth of a mile closer in distance from mixed-use trail it is predicted that single-family homes increases in value by approximately +0.5% of their value. This result is statistically significant at the 95% level, implying a high degree of certainty that these landowners benefit from mixed-use trail operation. 11 12 13 14 15 16 17 18 19 20 This result is consistent with findings from the previous economic literature. Previous research by Lindsey et al. (2004) found that homes sold within a half-mile proximity of a multi-use trail in Indiana sold for approximately 14% more than comparable homes further than a half mile from the trail. Campbell et al. (2007) found that single-family homes that were near an urban greenway in North Carolina sold for a significant premium over homes further away. On average, an increase in distance from the greenway by 10% reduced sale price by approximately 0.3%. Krizek (2006) studied how off-road multi-use trails in the Minneapolis and St. Paul area of Minnesota impact property value. Results of their analysis suggest that off-road trails located in urban areas increased property values. On average, moving a home 10% further from a mixed-use trail resulted in an expected decrease in property value by 0.07%, a result statistically significant at the 95% level. 21 How Mixed-use Trails Add Value to Property 22 23 24 25 26 The benefits to single-family homeowners from nearby mixed-use trails are multiform. For instance, Corning et al. (2012) performed a case study of resident attitudes towards nearby trails in Bloomington, Indiana. The authors interviewed homeowners located nearby a mixed-use trail to ascertain their positive and negative perceptions of the trail. The commonly sighted positive perceptions of the trail from their study included access to recreation and the natural world, BURKE-GILMAN TRAIL MISSING LINK 4-5 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 6 7 convenience and accessibility, scenic views and enhanced social life. On the whole, the authors conclude that the qualitative benefits provided by mixed use trails to residents are likely outweigh the relatively few negative impacts sighted by the residents. Benefits from the BGT Missing Link will likely include improved recreation and accessibility, especially to those commuters accessing other sections of the existing BGT. However, given the urban location of the study area, benefits from access to the natural world and scenic views will likely be more limited. How Mixed-use Trails Negatively Impact Property 8 9 10 11 12 13 14 In the case study conducted by Corning et al. (2012), common negative perceptions of the trail included, trespassing, less privacy and dog waste. However, these negative consequences were not widespread among the sample and could be mitigated somewhat with optimal trail design. Most of the negative consequence highlighted from this study is not relevant to the Ballard study area. The stock of singlefamily homes located in the affected environment is predominantly located at the far northern edge of the study area. Thus, residents are not likely to experience a significant increase in trespassing or significantly diminished privacy. The effect of the BGT Missing Link on dog waste is uncertain. 15 4.2.2.2 Multi-family Residences 16 17 18 19 20 21 22 23 In Table 3, in the appendix, the impact of proximity to multi-use trails on multi-family apartment buildings is presented. These results are used to extrapolate the projected impact on all multi-family land uses (i.e. both apartments and condos). These results suggest that on average multi-family units that are closer to mixed-use trails tend to sell for a slightly higher price than buildings further away. Each tenth of a mile decrease in distance from a mixed-use trail increases property value by approximately +1.7%. This result is, however, statistically insignificant. Hence, the primary conclusion drawn from this model is that multi-family units are likely to be unaffected or slightly positively affected by the operation of the BGT Missing Link in Ballard. 24 25 26 27 28 29 30 31 Previous economic research has not studied the direct impact of mixed-use trails on multi-family buildings. One study by Campbell et al. (2007), estimated the impact of that proximity to urban greenways in Charlotte, North Carolina had on several land use types, including multi-family units. Urban greenways in their study encompass both the urban trail system, meant to serve pedestrians and bikers, as well as the resultant increase in preserved open space. Their results suggest that multifamily units benefited, on average, from the operation of urban greenways. Increasing a multi-family unit’s distance from the trail by 10% would result in an average decrease in property value by approximately -0.013%, a result statistically significant at the 95% level. 32 How Mixed-use Trails Add Value to Property 33 34 35 36 Many of the benefits associated with premiums in single family homes would apply to multi-family units as well. Residents in these buildings would likely benefit from the increased accessibility to downtown Seattle and other areas of the city. In addition, the expansion of the BGT would provide increased access to recreational opportunities. 37 How Mixed-use Trails Negatively Impact Property 38 39 40 Damages to multi-family units will also be similar to those of single-family homes. These may include trespassing or reduced privacy. These concerns may be somewhat offset by the improved security of the average multi-family unit compared to that of a single-family home. 41 4.2.2.3 Commercial Properties 42 43 The impact of proximity to multi-use trail on commercial properties in King County is shown in Table 4, in the appendix. In this model, commercial properties include all offices, restaurants and retail uses. 4-6 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 Results of this model suggest that on average, commercial properties tend to benefit from proximity to mixed-use trail. A decrease in distance from a mixed-use trail by a tenth of a mile increases property value by approximately +1.8%, a result that is statistically insignificant. On this basis, it is likely that, on average, commercial properties will likely by either slightly positively or unaffected by the operation of the BGT Missing Link. 6 7 8 9 10 Previous research by Campbell et al. (2007) found that commercial properties were on average slightly positively impacted by proximity to urban greenways in North Carolina. An increase in distance from the greenway by 10% resulted in a decrease in commercial property value by approximately -0.17%. Though these results are not directly comparable to those produced from King County, they are of the same direction and rough magnitude. 11 How Mixed-use Trails Add Value to Property 12 13 14 15 16 17 18 19 20 Commercial properties are likely to experience heterogeneous benefits depending upon the primary use of the parcel. For instance, commercial office buildings will likely benefit from increased accessibility provided by the BGT Missing Link to the employees using these facilities. Restaurants and retail establishments will likely benefit due to increased business from bike and pedestrian customers. Several prior studies have found that pedestrians and bikers (Bent and Singa 2009 and Clifton et al. 2013) tend to spend less per visit but visit stores more frequently than customers who arrived by automobile. Clifton et al. (2013), for instance, found that for every retail category aside from grocery stores, pedestrian and biking customers tended to spend more per month at retail stores than do automobile based customers. 21 How Mixed-use Trails Negatively Impact Property 22 23 24 25 26 27 28 29 The operation of the BGT Missing Link may pose several types of damages to commercial properties. For commercial properties with frequent shipping activity located adjacent to the trail, the traffic on the BGT may disrupt delivery patterns. To some extent, these effects may be mitigated by businesses adjusting their delivery schedules to times of days with less frequent pedestrian and bike access. Depending upon the route chosen, some businesses may lose access to existing loading and unloading docks entirely. In these cases, businesses may need to conduct loading and unloading activity from public right-of-ways, as opposed to private loading bays. These changes in delivery activity may harm business profitability and somewhat disrupt traffic patterns in the vicinity. 30 31 32 33 34 35 In addition, some commercial properties will lose some street parking access as a result of the construction of the BGT Missing Link. For retail properties and restaurants, the loss of street parking may result in some reduction in business from customers arriving by automobile. However, as shown by Clifton et al. (2013), new business generated by biking and pedestrian customers will likely offset these anticipated losses. Commercial properties located in the Ballard neighborhood that are not adjacent to the BGT Missing Link are unlikely to face hardship from the operation of the trail. 36 4.2.2.4 Mixed-Use Properties 37 38 39 40 41 42 43 44 45 Mixed-use properties consist of locations with combined uses of multi-family housing and commercial, typically retail space. Separate estimates of the impact of proximity to mixed-use trails on mixed-use properties were not produced since these buildings tend to be composites of several independently owned and operated units. Therefore, the impact of the operation of the BGT Missing Link on mixeduse properties is based on an average of the predicted impact for commercial and multi-family properties from Table 2 and Table 3, in the appendix. Based upon these results, it is anticipate that every tenth of a mile decrease in distance from mixed-use trail will increase mix-use property value by approximately +1.75%, on average. Because statistically insignificant impacts of proximity to mixed-use trail were predicted for both multi-family and commercial uses, the impacts to mixed-use BURKE-GILMAN TRAIL MISSING LINK 4-7 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 properties are also expected to be statistically insignificant. No relevant previous research has studied the impact of proximity to trail infrastructure on mixed-use properties. 3 How Mixed-use Trails Add Value to Property 4 5 6 The benefits of mixed-use trail operation for mixed-use properties will be consistent with those projected for multi-family and commercial land uses. Generally, most benefits will derive from increased accessibility for residents and potential consumers of these businesses. 7 How Mixed-use Trails Negatively Impact Property 8 9 10 11 12 Damages to mixed-use properties will also be consistent with those described for multi-family and commercial land uses. Some commercial businesses may find their delivery schedules impacted by trail operation but may be able to mitigate these damages by altering delivery schedules to less congested times of day. In addition, some residents of mixed-use buildings may experience some loss in privacy due to the increased pedestrian traffic. 13 4.2.2.5 Parking Facilities 14 15 16 17 18 The impact of proximity to mixed-use trails on parking facilities was not directly estimated. Since these facilities operate primarily as commercial enterprises, estimates produced from results of Table 3, in the appendix, were used to project impacts for parking facilities. It is therefore predicted that each tenth of a mile decrease in distance from mixed-use trail will increase parking property value by approximately +1.8%, on average. However, this result is statistically insignificant. 19 How Mixed-use Trails Add Value to Property 20 21 22 23 24 25 26 In addition to increased pedestrian accessibility, consistent with benefits predicted from commercial properties, parking facilities may also benefit from decreases in the supply of on street parking form the BGT Missing Link operation. Decreases in publically accessible on-street parking will tend to increase the value of off-street parking facilities by constraining the potential supply of parking spaces in the study region. Depending upon the location and magnitude of the loss of on-street parking, some parking facilities may witness increases in property value through more demand for their spaces. 27 How Mixed-use Trails Negatively Impact Property 28 29 30 31 Economic damages from the operation of the BGT Missing Link may result from congestion of pedestrian and bicycle traffic with automobile traffic around the parking garages. Where the BGT Missing Link crosses very near parking facilities, it may result in delays in travel for vehicles and potential increases in accidents. 32 4.2.2.6 Industrial and Warehouse Properties 33 34 35 36 37 38 39 40 The results for the impact of proximity of industrial properties to mixed-use trails in King County are shown in Table 5, in the appendix. Industrial properties include locations whose active are light/medium industrial, heavy industrial, flex industrial or warehouse uses. These results indicate that on average, industrial properties will either be unaffected or slightly harmed by the operation of the BGT Missing Link. A decrease in distance from a mixed-use trail by a tenth of a mile tends to decrease industrial property value by approximately -1.1%. This result is statistically insignificant, however. There has not been previous research examining the economic link between mixed-use trail operation and industrial property value or business activity. 41 How Mixed-use Trails Add Value to Property 4-8 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 The principle benefit that the BGT Missing Link operation would provide to industrial uses in the Ballard area is by improving accessibility of these locations to their employees. 3 How Mixed-use Trails Negatively Impact Property 4 5 6 7 8 9 10 11 12 13 14 15 16 17 The operation of the BGT Missing Link may significantly impede some industrial users located adjacent to the trail due to the congestion of industrial traffic and pedestrian use. Significant impacts mean that these industrial users are likely to experience disruptions to business activity that are unlikely to be overcome or mitigated without large cost. Industrial uses may be required to adjust delivery patterns where the build alternatives cross loading docks or driveways. In addition, the operation of heavy machinery and trucks in an environment with more pedestrian and bike travelers may increase risk of accident somewhat. Increases in risk of automotive accidents could result in higher insurance cost or require additional labor expenditures to employ traffic flaggers to avoid collisions. Industrial businesses may adapt somewhat by adjusting delivery schedules to times of day with relatively few pedestrian and bikers using the BGT. This may result in more scheduled hours of operation and higher labor costs for these users. These additional operating challenges are likely to increase costs of production for these users and are unlikely to be able to pass these costs on to consumers. Minimizing the number of industrial driveway and loading dock crossings may reduce these potentially adverse impacts. 18 19 20 21 22 23 24 25 26 27 28 29 Figure 4-2-2-7 shows the location of industrial and warehouse properties located adjacent to one or more of the build alternatives in the study region. There are a total of 81 industrial or warehouse properties that may be directly or directly impacted by the operation of the BGT Missing Link, depending upon which build alternative is selected. Of these properties, a total of 16 properties have an assessed value in excess of $1 million. However, the operation of these properties is only expected to be significantly impacted for those properties where the primary access point or loading docks are crossed by the mixed-use trail. At these points, the congestion of pedestrian and bike travelers with industrial traffic may cause significant economic harm. Significant impacts result from the interference of the business operations of industrial properties due to pedestrian and bicycle traffic. This interference may result in decreased profitability and in extreme cases, result in some industrial users going out of business. For each build alternative, a list of potentially affected industrial properties along with a subjective ranking of the significance of the expected impacts are provided in Sections 4.3 to 4.6. BURKE-GILMAN TRAIL MISSING LINK 4-9 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK Figure 4-2-2-7: Industrial and Warehouse Properties Adjacent to One or More Build Alternative PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 4-10 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 4.2.2.7 Institutional Properties 2 3 4 5 The only privately operated institutional property operating in the Ballard study area that may be affected by the BGT Missing Link operation is the Swedish Ballard Medical Plaza. This property is not located adjacent to any of the build alternatives but may be affected due to a general increase in pedestrian and bike traffic that may spillover into the Ballard study area. 6 7 8 9 10 Due to lack of transactions for properties used for hospital uses in King County, a separate hedonic model was not run for institutional land uses. For purposes of this analysis, it is assumed that the impact of the BGT Missing Link operation will be similar to that of industrial properties in the Ballard neighborhood. This implies that that the Swedish Ballard Medical Plaza will be unaffected to slightly negatively affected by the trail operation. 11 Multi-use trail Benefits 12 13 14 15 Although the overall effect of the BGT Missing Link on Swedish Hospital is likely to be small or slightly negative, some positive benefits may result as well. The Swedish Ballard Medical Plaza may be somewhat positively affected by the BGT Missing Link operation to the extent that the trail improves accessibility for patients and family members. 16 Multi-use trail Damages 17 18 It is also possible that the operation of ambulances and other emergency vehicles may be somewhat impaired by the increased pedestrian and bicycle traffic resulting from the BGT Missing Link. 19 4.2.2.8 Vacant Properties 20 21 22 23 There are several vacant properties in the Ballard study area. Since the future land use of these locations are constrained by the allowable zoning, economic impacts were assigned based upon the current zoning of these locations. For instance, if a parcel is zoned primarily for commercial uses, economic impacts were based upon hedonic estimates from the commercial property model. 24 4.2.2.9 Study Area Parking Supply 25 26 27 28 29 30 31 32 33 34 The study region averages a parking utilization rate of between 60% and 67% for weekdays, depending on time of day (Parking Discipline Report, 2016). Although SDOT does not set target utilization rates for residential and non-paid areas, these utilization rates are below the target utilization rate of 70% 85% for commercial and mixed-use areas in Ballard. All build alternatives result in some loss in parking supply, primarily from the stock of available on-street parking. The loss in spaces may result in some spatially acute shortages in supply, somewhat limiting the accessibility to business and residences by automobile travelers. However, given the relatively modest rate of parking utilization in the study area, the region should be able to absorb some loss in parking supply without significant disruption to business activity. Significant disruption would entail reduced visitation or excessive travel distance from available parking spaces to destinations. 35 4.3 36 4.3.1 Operation 37 38 39 Table 4-3-1 shows the expected economic impacts from the operation of the Shilshole South Alternative by land use type. Overall, only relatively smaller impacts to property value from the Shilshole South Alternative operation are expected. The economic impacts range from -4.2% reduction in property Shilshole South Alternative BURKE-GILMAN TRAIL MISSING LINK 4-11 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 6 7 value to industrial properties to +6.4% impact for parking facilities. The overall expected impact on property values in the study area is +2.8%. However, based upon the econometric models presented in the appendix, the only statistically significant economic impact is for single-family homes, with a modest +0.4% increase in property value. Hence, the overall conclusion from this analysis is that, on average, properties in the study area are likely to be negligibly to slightly positively impacted by the operation of the Shilshole South Alternative. Table 4-3-1: Economic Impact of Shilshole South Alternative Operation by Land Use Type Impact Commercial Dollar Value Percentage Impact $36,487,892 6.3% -$11,476,506 -4.2% -$28,802 0.0% Mixed-use $20,328,034 5.0% Multi-family $25,330,126 3.9% Parking $3,932,717 6.4% Single-family $1,892,153 0.4% Vacant $4,003,661 1.5% Total $80,469,275 2.8% Industrial Institutional 8 9 10 11 12 13 14 15 Commercial, multi-family, parking and single-family properties all witness appreciation in property value under the Shilshole South Alternative. Improvements in parcel accessibility and increased business for retail properties from pedestrian and bike users all contribute to gains in parcel values. Industrial and institutional properties experience some decreases in value, though on average, these effects are statistically insignificant. Industrial properties may experience some disruption to business due to congestion of pedestrian and industrial freight traffic. While the industrial users are likely to undertake some actions to mitigate the increased costs, the cost of operating in the study area may increase. 16 Adjacent Industrial and Warehouse Properties 17 18 19 20 21 22 23 24 25 26 Table 4-3-2 shows the expected economic impact to those properties identified with significant operations adjacent to the Shilshole South Alternative. Economic impact is ranked on a 1 to 5 scale, with 5 being most affected. This subjective scale captured the degree to which current operations and accessibility are likely to be impinged by the operation of the Shilshole South Alternative for the BGT Missing Link. A value of 4 or 5 indicates a high likelihood of significant impacts from positioning of the trail. Trail configurations that cross active loading docks and driveways for businesses with frequent deliveries are most likely to experience significant disruption. To the extent possible, driveways and loading docks that may be crossed by the BGT Missing Link were also identified. Of the properties identified, it is expected that the Ballard Marina and Salmon Bay Sand and Gravel may be significantly impacted by the operation of the Shilshole South Alternative. 4-12 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK 1 5400 28TH AVE NW 98107 0.5 2.7 Yes Yes Ballard Window Works; Morad Electronics 1132 NW 45TH Corporation ST 98107 0.7 Radtke Marine Inc; Scotts Trophy 1115 NW 46TH Shop ST 98107 0.9 BURKE-GILMAN TRAIL MISSING LINK Ballard Mill Marina Yes No Data Yes Yes 4733 SHILSHOLE AVE NW 98107 12.5 5218 -5256 Salmon Bay Sand SHILSHOLE AVE and Gravel NW 98107 2.3 Tombo Construction Market Street Self Storage (and 2811 NW other office and MARKET retail tenants) STREET 98107 Tenant(s) No Yes Yes No Yes Yes Yes Yes Yes Yes No 2 3 5 5 1 3 Likelihood to King County Has Drive-inbe impacted Assessor Drive-in- docks Driveways (1 least likely, Address Acres dock Crossed Crossed 5 most likely) Table 4-3-2: Economic Impacts to Adjacent Industrial or Warehouse Properties PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 4-13 JANUARY 29, 2016 Marine repair company likely has some deliveries; trophy shop is a retail rather than an industrial tenant Likely few deliveries to window washing business; more deliveries to antenna manufacturer but still somewhat limited due to business and product size Marina is the largest and one of the highest valued properties in the study area. It also includes almost a dozen businesses, all of which have delivery needs. Salmon Bay is the "Northwest s largest supplier of tools and products used in the concrete, plaster, stucco and masonry trades" and delivery-oriented Property appears to be the retail location of the construction company, though likely does have some deliveries. High level of impact due to the proximity of all four lines though only impacts one industrial business. Additional notes PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 Transportation Impacts 2 3 4 5 6 The estimated annual cost of traffic delays in 2040 for the Ballard study region were derived using data from the Transportation Discipline Report. Expected delay time per intersection for the Shilshole South build alternative was converted into an annual expected cost using an average estimate of the time value of money of $20 per hour. In Table 4-3-2, the expected costs of traffic delay under the No Build Alternative and Shilshole South Alternative are displayed by intersection. 7 Table 4-3-3: Expected Cost of Traffic Delay for the Year 2040 (Shilshole South Alternative) Intersection/Driveway Traffic Control 2040 No Build PM Peak Hour Delay (total cost) Shilshole South Delay (total cost) NW Market St/28th Ave NW Signal $39,874 $39,874 NM Market St/24th Ave NW Signal $389,766 $389,766 NM Market St/Ballard Ave NW Pedestrian Half Signal $61,317 $61,317 NW Market St/22nd Ave NW/Leary Ave NW Signal $299,898 $295,732 15th Ave NW/NW Leary Way Southbound OffRamp Signal B $157,833 $157,833 15th Ave NW/NW Leary Way Northbound OffRamp Signal E $489,250 $489,250 NW Leary Way/14th Ave NW Signal $135,856 $135,856 NW Leary Way/11th Ave NW Signal $552,719 $552,719 11th Ave NW/NW 46th St Signal $189,797 $151,838 11th Ave NW/NW 45th St Unsignalized $25,655 $25,655 NW 46th St/Shilshole Ave NW Unsignalized $5,714 $17,776 Shilshole Ave NW/NW 17th St Unsignalized $72,063 $2,772 Leary Ave NW/20th Ave NW Unsignalized $31,355 $31,355 NW 56th St/24th Ave NW Unsignalized $95,797 $72,832 NW 54th St/Hiram M. Chittenden Locks Driveway $15,736 $18,358 Shilshole Ave NW/Stimson Marina Driveway $41,432 $54,615 Shilshole Ave NW/Salmon Bay Center Driveway $37,973 $49,530 Shilshole Ave NW/Salmon Bay Sand and Gravel (north side) Driveway $18,566 $18,566 Shilshole Ave NW/Salmon Bay Sand and Gravel (south side) Driveway $26,130 $32,904 Shilshole Ave NW/Covich-Williams Chevron Driveway $16,452 $27,097 Shilshole Ave NW/Salmon Bay Café Driveway $16,452 $25,162 Shilshole Ave NW/Ballard Industrial Driveway $27,097 $19,355 Ballard Ave NW/Ballard Industrial Driveway $7,742 $7,742 Shilshole Ave NW/Ballard Mill Marina Driveway $26,130 $30,001 BURKE-GILMAN TRAIL MISSING LINK 4-14 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 6 On average, compared to the No Build Alternative, traffic delays at study intersections are expected to reduce the value of traffic damages by approximately -4.8%. However, the traffic damages to studied driveways are expected to increase, on average, by approximately +21.2%, relative to the baseline No Build Alternative. While the overall benefits to reductions in intersection delays are likely to be dispersed among businesses, residents and commuters, the damages from driveway delays will be capitalized into the value of the properties that own these locations. 7 8 9 10 11 12 13 If capitalized into 2015 dollars using a discount rate of 3.5% and a capitalization rate of 6.0%, the capital cost of driveway delays are equivalent to a total value of approximately -$1.4 million. Some of these costs may be offset by altering delivery schedules and changing driving behavior but are unlikely to ameliorate all of the economic damages. Based upon these results, it is estimated that the Shilshole South Alternative will result in significant negative economic impacts to property owners with studied driveways in the Ballard study region. These impacts are defined as significant because the capitalization costs exceed more than 1% of the current appraised parcel value. 14 Parking Damages 15 16 17 18 19 20 21 Based upon estimates from the Parking Discipline Report (Parametrix 2016b), the Shilshole South Alternative will result in a loss of parking equivalent to 261 spaces. This reduction represents 8% of the on-street parking supply and 7% of the total parking supply in the region. The Shilshole South Alternative will also result in the greatest loss of parking of any build alternative. Based upon estimates of the current parking utilization rate in the region, assuming that parking demand remains unchanged from the No Build Alternative, the average parking utilization rates will increase to between 66% to 73% for the study region. 22 23 24 25 26 27 28 29 30 These estimates are in line with SDOT’s target utilization rate of 70% - 85% for commercial and mixeduse areas. The reduction in parking from the Shilshole South Alternative is unlikely to result in acute shortages of parking supply. There are only relatively few locations adjacent to the Shilshole South Alternative with large amounts of retail or residential uses, where automobile traffic and parking utilization tends to be highest. A total of 48 out of 128 properties along this alternative are used for commercial, mixed-use or multi-family purposes. Reduced parking from the Shilshole South Alternative are not expected to cause significant economic damages because neighboring streets are likely to absorb demand from lost parking supply without reducing accessibility to parcels or increasing utilization above critical thresholds. 31 4.4 32 4.4.1 Operation 33 34 35 36 37 38 39 40 41 The expected economic impacts from the operation of the Shilshole North Alternative are reported in Table 4-4-1. The overall economic impacts to the study region are equivalent to an expected net increase of +3.0% in property values. In this scenario, industrial properties are slightly more negatively impacted than the Shilshole South Alternative but other land use types are generally more positively affected. However, considering that single-family homes are the only land use type expected to report a statistically significant impact from the construction of the BGT, these results imply that the average impact from the Shilshole North Alternative is likely to be negligible to slightly positive. In addition, these impacts are in the same range as those predicted for the Shilshole South Alternative. Shilshole North Alternative 42 BURKE-GILMAN TRAIL MISSING LINK 4-15 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Table 4-4-1: Economic Impact of Shilshole North Alternative Operation by Land Use Type Impact Commercial Dollar Value Percentage Impact $37,671,452 6.5% -$12,080,709 -4.4% -$28,811 0.0% Mixed-use $20,755,594 5.1% Multi-family $28,089,886 4.3% Parking $4,080,858 6.6% Single-family $2,461,692 0.6% Vacant $4,313,419 1.6% $85,263,381 3.0% Industrial Institutional Total 2 3 4 5 6 7 8 9 Commercial, multi-family, parking and single-family properties all witness appreciation in property value under the Shilshole North Alternative. Improvements in parcel accessibility and increased business for retail properties from pedestrian and bike users all contribute to gains in parcel values. Industrial and institutional properties experience some decreases in value, though on average, these effects are statistically insignificant. Industrial properties may experience some disruption to business due to congestion of pedestrian and industrial freight traffic. While the industrial users are likely to undertake some actions to mitigate the increased costs, the cost of operating in the study area may increase. 10 Adjacent Industrial and Warehouse Properties 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Along the Shilshole North Alternative several industrial and warehouse properties maintain operations, which may be adversely affected by the operation of the BGT Missing Link. Table 5-4-2 shows the sample of industrial and warehouse properties with operations that may be adversely impacted by the Shilshole North Alternative. This subjective scale captured the degree to which current operations and accessibility are likely to be impinged by the operation of the Shilshole North Alternative for the BGT Missing Link. A value of 4 or 5 indicates a high likelihood of significant impacts from positioning of the trail. Trail configurations that cross active loading docks and driveways for businesses with frequent deliveries are most likely to experience significant disruption. Of properties along Shilshole North, only Salmon Bay Sand and Gravel is expected to be significantly affected, with disruptions to driveways and traffic to business activity on both the north and south side of Shilshole. Ballard Industrial may also experience some adverse economic affects. These results suggests that the economic impact of the Shilshole North Alternative will be potentially significant for some large industrial users but will likely be smaller than the Shilshole South Alternative. During high demand hours of the day, some nearby parcels may experience some loss in accessibility due to reductions in nearby parking supply. 4-16 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK 1 0.5 2.3 0.4 0.3 0.9 5400 28TH AVE Tombo Construction NW 98107 5218 -5256 SHILSHOLE AVE NW 98107 4749 BALLARD AVE NW 98107 Salmon Bay Sand and Gravel Ballard Industrial Warden Fluid 1515 NW Dynamics; Five Axis BALLARDWAY Industries 98107 Radtke Marine Inc; 1115 NW 46TH Scotts Trophy Shop ST 98107 BURKE-GILMAN TRAIL MISSING LINK 2.7 Market Street Self Storage (and other 2811 NW office and retail MARKET STREET tenants) 98107 Tenant(s) Yes Yes Yes No Data Yes Yes Yes Yes No No No Yes No Yes Yes No Yes 2 3 4 5 1 2 Likelihood to be Drive-inimpacted King County Has Drive- docks Driveways (1 least likely, 5 AssessorAddress Acres in-dock Crossed Crossed most likely) Additional notes 4-17 JANUARY 29, 2016 Marine repair company likely has some deliveries; trophy shop is a retail rather than an industrial tenant Both distributing and manufacturing businesses likely have moderate delivery needs due to their relatively small size. Ballard Industrial has a fleet of 5 trucks for local deliveries and carries many large pieces of equipment. Salmon Bay is the "Northwest s largest supplier of tools and products used in the concrete, plaster, stucco and masonry trades" and delivery-oriented Property appears to be the retail location of the construction company, though likely does have some deliveries. High level of impact due to the proximity of all four lines though only impacts one industrial business. Table 4-4-2: Economic Impacts to Adjacent Industrial or Warehouse Properties Shilshole North Alternative PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 Transportation Impacts 2 3 4 5 6 The economic impact of traffic delays in 2040 for the Ballard study region were derived using estimates from the Transportation Discipline Report. Annual economic impacts are based upon a time value of money estimate of $20 and were derived for each intersection and driveway studied. Table 4-4-3 shows the expected annual economic damages for the Shilshole North and No Build Alternatives in 2040. 7 Table 4-4-3: Expected Cost of Traffic Delay for the Year 2040 (Shilshole North Alternative) Intersection/Driveway 2040 No Build PM Peak Hour Delay (total cost) Shilshole North Delay (total cost) NW Market St/28th Ave NW $39,874 $119,621 NM Market St/24th Ave NW $389,766 $398,427 NM Market St/Ballard Ave NW $61,317 $61,317 NW Market St/22nd Ave NW/Leary Ave NW $299,898 $295,732 15th Ave NW/NW Leary Way $157,833 $157,833 15th Ave NW/NW Leary Way $489,250 $489,250 NW Leary Way/14th Ave NW $135,856 $135,856 NW Leary Way/11th Ave NW $552,719 $552,719 11th Ave NW/NW 46th St $189,797 $151,838 11th Ave NW/NW 45th St $25,655 $25,655 NW 46th St/Shilshole Ave NW $5,714 $17,776 Shilshole Ave NW/NW 17th St $72,063 $3,465 Leary Ave NW/20th Ave NW $31,355 $31,355 NW 56th St/24th Ave NW $95,797 $72,832 NW 54th St/Hiram M. Chittenden Locks $15,736 $16,785 Shilshole Ave NW/Stimson Marina $41,432 $33,899 Shilshole Ave NW/Salmon Bay Center $37,973 $29,718 Shilshole Ave NW/Salmon Bay Sand and Gravel (north side) $18,566 $38,819 Shilshole Ave NW/Salmon Bay Sand and Gravel (south side) $26,130 $20,323 Shilshole Ave NW/Covich-Williams Chevron $16,452 $15,484 Shilshole Ave NW/Salmon Bay Café $16,452 $14,516 Shilshole Ave NW/Ballard Industrial $27,097 $19,355 Ballard Ave NW/Ballard Industrial $7,742 $7,742 Shilshole Ave NW/Ballard Mill Marina $26,130 $19,355 8 BURKE-GILMAN TRAIL MISSING LINK 4-18 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 6 The Shilshole North Alternative is expected to result in a total reduction in the cost of traffic delays at intersections in the Ballard study region equivalent to -1.3%, relative to the No Build Alternative. In addition, the studied driveways are also expected to have a reduction in traffic costs of approximately -7.5%. On this basis, it is expected that the Shilshole North Alternative will not result in significant damages due to traffic delays. 7 Parking Damages 8 9 10 11 12 13 14 15 16 17 18 19 20 21 The total expected reduction in available on street parking from the Shilshole North Alternative is approximately 227 parking spaces (Parametrix 2016b). This is equivalent to a 7% reduction in onstreet parking supply and a 6% reduction in total available parking in the region. Assuming that the reduced supply of parking is absorbed evenly through the study region, this reduction in supply will increase average parking utilization to between 65% and 72% depending upon time of day. This predicted increase is within the target utilization range of 70% - 85% that SDOT sets for commercial and mixed-use zones. The acute affects of reduced parking supply from the Shilshole North Alternative are unlikely to be severe. That is, reduced parking in these areas are likely to be absorbed on neighboring streets without disruption to accessibility of nearby parcels or increases in parking utilization above critical thresholds. There are a total of 88 out of 201 parcels located adjacent to this alternative that are used for commercial, mixed-use or multi-family purposes. Reduced parking from the Shilshole North Alternative are not expected to cause significant economic damages. However, during high demand hours of the day, reduced on-street parking supply may cause some short-term impacts to accessibility for nearby parcels. 22 4.5 23 4.5.1 Operation 24 25 26 27 28 29 30 31 32 33 34 35 The expected economic impacts from the operation of the Ballard Avenue Alternative are reported in Table 4-5-1. The overall effect of the operation of the Ballard Avenue build alternative is an expected increase in property values by approximately 2.8%, equivalent to results from the Shilshole South Alternative. Industrial properties are expected to be slightly harmed by the operation of the Ballard Avenue Alternative, with an expected decrease in property values of approximately -4.2%. Parking and commercial properties are most positively affected with an expected increase in property value by +6.4% and +6.3%, respectively. Single-family homes, which are the only land use type with statistically significant impacts predicted from the econometric models in the appendix, are expected to increase in value by approximately +0.4%, on average. These results suggest that the expected impact of the operation of the Ballard Avenue Alternative negligible to slightly positive. Estimates of the impacts to individual land use types and for the study region overall are in the same range as those for both the Shilshole South and Shilshole North Alternatives. Ballard Avenue Alternative 36 BURKE-GILMAN TRAIL MISSING LINK 4-19 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Table 4-5-1: Economic Impact of Ballard Avenue Alternative Operation by Land Use Type Impact Commercial Dollar Value Percentage Impact $36,487,892 6.3% -$11,476,506 -4.2% -$28,802 0.0% Mixed-use $20,328,034 5.0% Multi-family $25,330,126 3.9% Parking $3,932,717 6.4% Single-family $1,892,153 0.4% Vacant $4,003,661 1.5% $80,469,275 2.8% Industrial Institutional Total 2 3 4 5 6 7 8 9 Commercial, multi-family, parking and single-family properties all witness appreciation in property value under the Ballard Avenue Alternative. Improvements in parcel accessibility and increased business for retail properties from pedestrian and bike users all contribute to gains in parcel values. Industrial and institutional properties experience some decreases in value, though on average, these effects are statistically insignificant. Industrial properties may experience some disruption to business due to congestion of pedestrian and industrial freight traffic. While the industrial users are likely to undertake some actions to mitigate the increased costs, the cost of operating in the study area may increase. 10 Adjacent Industrial and Warehouse Properties 11 12 13 14 15 16 17 18 19 20 21 22 Compared to the Shilshole South and Shilshole North Alternatives, relatively few industrial businesses are located adjacent to the Ballard Avenue Alternative. In Table 4-5-2, industrial and warehouse properties with substantial operations adjacent to the Ballard Avenue Alternative are identified. For each property, likely economic impacts are ranked on a subjective scale from 1 to 5, with 5 being most likely. The ranking weights the degree of impact from reduced accessibility to the site from the trail alternative. This subjective scale captured the degree to which current operations and accessibility are likely to be impinged by the operation of the Ballard Avenue Alternative for the BGT Missing Link. A value of 4 or 5 indicates a high likelihood of significant impacts from positioning of the trail. Trail configurations that cross active loading docks and driveways for businesses with frequent deliveries are most likely to experience significant disruption. Along this alternative, only Ballard Industrial has operations that may be potentially significantly impacted due to restricted access to driveways and loading docks. 4-20 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK Yes 1132 NW 45TH ST 98107 1115 NW 46TH ST 98107 Ballard Window Works; Morad Electronics Corporation Radtke Marine Inc; Scotts Trophy Shop BURKE-GILMAN TRAIL MISSING LINK 0.9 Yes Yes Warden Fluid 1515 NW Dynamics; Five BALLARD WAY Axis Industries 98107 0.3 0.7 Yes 4749 BALLARDAVE NW 98107 0.4 Ballard Industrial Yes 2811 NW MARKET STREET 98107 2.7 Market Street Self Storage (and other office and retail tenants) Tenant(s) Yes Yes Yes Yes Yes Yes Yes Yes Yes No 2 3 3 4 3 Likelihood to King County Has Drive-inbe impacted Assessor Drive-in- docks Driveways (1 least likely, Address Acres docks Crossed Crossed 5 most likely) Additional notes 4-21 JANUARY 29, 2016 Marine repair company likely has some deliveries; trophy shop is a retail rather than an industrial tenant Likely few deliveries to window washing business; more deliveries to antenna manufacturer but still somewhat limited due to business and product size Both distributing and manufacturing businesses likely have moderate delivery needs due to their relatively small size. Ballard Industrial has a fleet of 5 trucks for local deliveries and carries many large pieces of equipment. High level of impact due to the proximity of all four lines though only impacts one industrial business. Table 4-5-2: Economic Impacts to Adjacent Industrial or Warehouse Properties Ballard Avenue Alternative PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 Transportation Impacts 2 3 4 5 Table 4-5-3 shows the expected economic costs of traffic delays in 2040 at study intersections and driveways from the Transportation Discipline report for the Ballard Avenue Alternative. Economic impacts were estimated assuming an average time value of money of $20 per hour and reported at the annual level. 6 Table 4-5-3: Expected Cost of Traffic Delay for the Year 2040 (Ballard Avenue Alternative) Intersection/Driveway 2040 No Build PM Peak Hour Delay (total cost) Ballard Avenue (total cost) NW Market St/28th Ave NW $39,874 $51,266 NM Market St/24th Ave NW $389,766 $424,412 NM Market St/Ballard Ave NW $61,317 $61,317 NW Market St/22nd Ave NW/Leary Ave NW $299,898 $295,732 15th Ave NW/NW Leary Way $157,833 $157,833 15th Ave NW/NW Leary Way $489,250 $489,250 NW Leary Way/14th Ave NW $135,856 $135,856 NW Leary Way/11th Ave NW $552,719 $585,232 11th Ave NW/NW 46th St $189,797 $161,328 11th Ave NW/NW 45th St $25,655 $25,655 NW 46th St/Shilshole Ave NW $5,714 $18,411 Shilshole Ave NW/NW 17th St $72,063 $13,858 Leary Ave NW/20th Ave NW $31,355 $31,355 NW 56th St/24th Ave NW $95,797 $8,530 NW 54th St/Hiram M. Chittenden Locks $15,736 $18,358 Shilshole Ave NW/Stimson Marina $41,432 $33,899 Shilshole Ave NW/Salmon Bay Center $37,973 $29,718 Shilshole Ave NW/Salmon Bay Sand and Gravel (north side) $18,566 $15,190 Shilshole Ave NW/Salmon Bay Sand and Gravel (south side) $26,130 $15,484 Shilshole Ave NW/Covich-Williams Chevron $16,452 $12,581 Shilshole Ave NW/Salmon Bay Café $16,452 $14,516 Shilshole Ave NW/Ballard Industrial $27,097 $19,355 Ballard Ave NW/Ballard Industrial $7,742 $7,742 Shilshole Ave NW/Ballard Mill Marina $26,130 $19,355 BURKE-GILMAN TRAIL MISSING LINK 4-22 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 6 7 Based upon these results, it is predicted that the total costs of traffic delays at studied intersection in the Ballard study area in 2040 are expected to decrease by -3.4%, for the Ballard Avenue Alternative relative to the No Build Alternative. The study driveways are also expected to experience improvements in traffic delays with the Ballard Avenue Alternative, with an expected reduction in travel costs of approximately -20.3% compared to the No Build Alternative. It is therefore expected that the Ballard Avenue Alternative will not deleteriously impact traffic conditions in the study region. 8 Parking Damages 9 10 11 12 13 14 Based upon results of the Parking Discipline Report (Parametrix 2016b), the Ballard Alternative will result in a loss of 198 parking spaces, which represents 6% of the on-street supply and 5% of the total parking supply in the study region. Assuming that these losses are absorbed locally in the study region, on street parking utilization rates may increase from the No Build Alternative scenario to between 64% and 72%. This utilization range is still below SDOT target utilization rate of 70% - 85% for mixed-use and commercial zones. 15 16 17 18 19 20 21 22 Given the large supply of retail and residential properties along the Ballard Alternative, it is likely that the loss of parking could result in acute shortages in available parking in some locations along this build alternative during high demand hours of the day. A total of 104 properties, out of 375 properties adjacent to the Ballard Avenue Alternative are used for commercial, mixed-use or multi-family purposes. Although commercial and residential landowners are unlikely to be economically impacted, automobile travelers may experience economic loss due to the increased time spent looking for parking and walking from more remote parking locations. These economic impacts could be offset by increasing the available supply of off street parking. 23 4.6 24 4.6.1 Operation 25 26 27 28 29 30 31 32 33 The expected economic impacts of the operation of the Leary Alternative are reported in Table 4-6-1. The Leary Alternative reports an average increase in property values of approximately 3.8%. This alternative also reports the largest negative impact on industrial properties, with an expected decrease in value by -4.5% on average, though this result is in line with estimates from other alternatives and not statistically significant. Commercial properties and parking facilities have the largest positive impact with +7.7% and +8.5%, respectively. Single-family homes are expected report a statistically significant and positive impact of +0.7% on average. These results suggest that the Leary Alternative will have a negligible to slight positive impact on area property values. In addition, the Leary Alternative reports the largest expected gain in property values of all the alternatives. Leary Alternative 34 BURKE-GILMAN TRAIL MISSING LINK 4-23 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Table 4-6-1: Economic Impact of Leary Alternative Operation by Land Use Type Impact Commercial Dollar Value Percentage Impact $44,256,480 7.7% -$12,436,921 -4.5% -$39,451 0.0% Mixed-use $28,056,188 6.9% Multi-family $33,439,122 5.1% Parking $5,220,166 8.5% Single-family $2,932,061 0.7% Vacant $5,026,225 1.9% $106,453,869 3.8% Industrial Institutional Total 2 3 4 5 6 7 8 9 Commercial, multi-family, parking and single-family properties all witness appreciation in property value under the Leary Alternative. Improvements in parcel accessibility and increased business for retail properties from pedestrian and bike users all contribute to gains in parcel values. Industrial and institutional properties experience some decreases in value, though on average, these effects are statistically insignificant. Industrial properties may experience some disruption to business due to congestion of pedestrian and industrial freight traffic. While the industrial users are likely to undertake some actions to mitigate the increased costs, the cost of operating in the study area may increase. 10 Adjacent Industrial and Warehouse Properties 11 12 13 14 15 16 17 18 Table 4-6-2 shows the industrial and warehouse properties located adjacent to the Leary Alternative with operations that may be impacted by the BGT Missing Link. The degree of economic impact is ranked on a 1 to 5 scale, with 5 being the highest. This subjective scale captured the degree to which current operations and accessibility are likely to be impinged by the operation of the Leary Alternative for the BGT Missing Link. A value of 4 or 5 indicates a high likelihood of significant impacts from positioning of the trail. Trail configurations that cross active loading docks and driveways for businesses with frequent deliveries are most likely to experience significant disruption. There are no properties that were identified with economic impacts predicted to be significantly impacted. 4-24 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK 1 1115 NW 46TH ST 98107 Radtke Marine Inc; Scotts Trophy Shop BURKE-GILMAN TRAIL MISSING LINK 0.5 5400 28TH AVE NW 98107 Tombo Construction 0.9 2.7 2811 NW MARKET STREET 98107 Market Street Self Storage (and other office and retail tenants) Tenant(s) Yes Yes Yes Yes No No Yes No Yes 2 1 2 Likelihood to King County Has Drive-inbe impacted Assessor Drive-in- docks Driveways (1 least likely, Address Acres docks Crossed Crossed 5 most likely) Additional notes 4-25 JANUARY 29, 2016 Marine repair company likely has some deliveries; trophy shop is a retail rather than an industrial tenant Property appears to be the retail location of the construction company, though likely does have some deliveries. High level of impact due to the proximity of all four lines though only impacts one industrial business. Table 4-6-2: Economic Impacts to Adjacent Industrial or Warehouse Properties Leary Alternative PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 Transportation Impacts 2 3 4 5 In Table 4-6-3, the expected economic impact of traffic delays in 2040 resulting from the Leary Alternative are displayed. These estimates are derived from per car intersection and driveways delays predicted in the Transportation Discipline Report (Parametrix 2016a) and assume a per hour average time value of money of $20. The estimates are reported per intersection at the annual level. 6 Table 4-6-3: Expected Cost of Traffic Delay for the Year 2040 (Leary Alternative) Intersection/Driveway 2040 No Build PM Peak Hour Delay (total cost) Leary (total cost) NW Market St/28th Ave NW $39,874 $119,621 NM Market St/24th Ave NW $389,766 $398,427 NM Market St/Ballard Ave NW $61,317 $61,317 NW Market St/22nd Ave NW/Leary Ave NW $299,898 $362,376 15th Ave NW/NW Leary Way $157,833 $363,017 15th Ave NW/NW Leary Way $489,250 $576,052 NW Leary Way/14th Ave NW $135,856 $392,474 NW Leary Way/11th Ave NW $552,719 $2,145,852 11th Ave NW/NW 46th St $189,797 $151,838 11th Ave NW/NW 45th St $25,655 $25,655 NW 46th St/Shilshole Ave NW $5,714 $17,776 Shilshole Ave NW/NW 17th St $72,063 $13,858 Leary Ave NW/20th Ave NW $31,355 $31,355 NW 56th St/24th Ave NW $95,797 $72,832 NW 54th St/Hiram M. Chittenden Locks $15,736 $16,785 Shilshole Ave NW/Stimson Marina $41,432 $33,899 Shilshole Ave NW/Salmon Bay Center $37,973 $29,718 Shilshole Ave NW/Salmon Bay Sand and Gravel (north side) $18,566 $15,190 Shilshole Ave NW/Salmon Bay Sand and Gravel (south side) $26,130 $15,484 Shilshole Ave NW/Covich-Williams Chevron $16,452 $12,581 Shilshole Ave NW/Salmon Bay Café $16,452 $14,516 Shilshole Ave NW/Ballard Industrial $27,097 $19,355 Ballard Ave NW/Ballard Industrial $7,742 $7,742 Shilshole Ave NW/Ballard Mill Marina $26,130 $19,355 BURKE-GILMAN TRAIL MISSING LINK 4-26 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 6 7 8 9 The total costs of traffic delays at intersections in 2040 in the study region are expected to be approximately +86% higher from the Leary Alternative than for the no build scenario. This is the largest expected increase in traffic costs of any build alternative and is due primarily to the predicted increase in traffic delays at the NW Leary Way/11th Ave NW intersection. This intersection has the highest average traffic counts in the study region and is expected to witness a significant increase in traffic delays. The economic costs from these delays will be born by residents, commuters and potential by businesses in the region if greater traffic levels tend to reduce automobile travel in the region. The expected impact to driveways under the Leary Alternative is a reduction in traffic costs by -21%. On this basis, it is concluded that operators of driveways will likely be unaffected. 10 Parking Damages 11 12 13 14 15 16 17 18 19 20 21 22 23 Results of the Parking Discipline Report (Parametrix 2016b) suggest that the Leary Alternative will result in a total reduction of 103 on-street parking spaces in the study region. This represents approximately 3% of on-street parking supply and 2.5% of the total available parking supply. Overall, the Leary Alternative is expected to result in the smallest disruption to parking supply. Assuming that losses in on-street parking are all absorbed in the study region, this is expected to raise average parking utilization rates to 62% - 69%, below the SDOT target rate for commercial and mixed use zones. The Leary Alternative may result in some acute shortages of available parking supply in high demand locations with large amounts of retail and residential properties and during high demand times of day. Overall, 128 out of 261 properties along the Leary Alternative are commercial, mixed-use or multifamily properties. In these areas, reduced parking supply may detrimentally impact automobile travels who must spend additional time either searching for parking or walking from more remote parking locations. These increased commute costs may inconvenience or deter some automobile travelers to the region. These costs could be reduced by increasing the supply of off street parking in the area. BURKE-GILMAN TRAIL MISSING LINK 4-27 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 2 Chapter 5: MEASURES AVOIDANCE, MINIMIZATION, AND MITIGATION Measures Common to All Build Alternatives 3 5.1 4 5.1.1 Construction 5 6 7 Construction of the BGT Missing Link may significantly impact business and commuting operations in the short term. While these damages will be short-lived, nevertheless, mitigation measures should be adopted to reduce the severity of these economic effects. 8 9 / Local access to should be maintained to businesses and residential property to minimize disruptions to automotive, freight, bicycle and pedestrian traffic. 10 11 / Posted signage and displays notifying the public of construction schedule and anticipated lane closures. 12 / Adding in short term parking in locations with significant temporary losses in on street parking. 13 5.1.2 Operation 14 15 16 17 The results of this analysis suggest that on balance, the operation of the BGT Missing Link will likely have a net positive economic impact on the region in each build alternative. However, some businesses and residents may experience some acute economic impacts. These impacts may be at least partially mitigated through the following options: 18 19 20 / Industrial and warehouse users will likely experience the largest economic losses. Choosing an alternative and setting a route with minimal crossing of drive-in-docks and driveways will help minimize disruption to these users. 21 22 23 / In high traffic intersections and locations with large amounts of freight deliveries, including controlled pedestrian crossings with stop signs or traffic arms on the mixed-use trail may help improve safety and limit disruption to local businesses. 24 BURKE-GILMAN TRAIL MISSING LINK 5-1 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 Chapter 6: CUMULATIVE IMPACTS 2 3 4 5 6 7 8 9 10 11 12 The Ballard study region is a rapidly changing and growing community. The analysis conducted in this report determined the likelihood of economic damages from the BGT Missing Link by comparing economic outcomes under each build alternative to the baseline conditions in 2015 for the No Build Alternative. However, over the medium to long term, the Ballard study region is likely to experience significant socio-economic and industry changes, regardless of whether or not the BGT Missing Link is constructed. As shown in Table 4-4-2, from 2000 to 2014, the services industry in Ballard has increased employment share by approximately 18.3% and the manufacturing industry has reduced employment by -7.5%. In addition, recent trends suggest strong growth in rents for multi-family housing, implying strong demand for housing and population growth in the region. Between 2015 and 2040, these economic trends are likely to continue, if not accelerate. Hence, industrial and other low-rent land users are likely to face increasing competitive pressure for service based and residential land users. 13 14 15 16 The operation of the mixed-use trail may add to the competitive pressures facing industrial users and appropriate steps should be taken to avoid or mitigate these damages. However, the economic impacts from the operation of the BGT Missing Link are likely to be smaller than those presented by anticipated regional changes even in the absence of the addition of the trail. 17 BURKE-GILMAN TRAIL MISSING LINK 6-1 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 Chapter 7: REFERENCES 2 3 4 Bent, Elizabeth, and Krute Singa. "Modal Choices and Spending Patterns of Travelers to Downtown San Francisco, California: Impacts of Congestion Pricing on Retail Trade." Transportation Research Record: Journal of the Transportation Research Board 2115 (2009): 66-74. 5 6 7 Bureau of Labor Statistics. “Occupational Employment and Wages in Seattle-Bellevue-Everett, May 2014.” Available at http://www.bls.gov/regions/west/newsrelease/occupationalemploymentandwages_seattle.htm 8 9 10 Campbell, Harrison S., and Darla K. Munroe. "Greenways and greenbacks: the impact of the Catawba Regional Trail on property values in Charlotte, North Carolina." southeastern geographer 47.1 (2007): 118-137. 11 12 13 14 Clifton, Kelly J., Christopher Devlin Muhs, Sara Morrisse, Tomás Morrissey, Kristina Marie Currans, and Chloe Ritter. "Examining Consumer Behavior and Travel Choices". Civil and Environmental Engineering Faculty Publications and Presentations (2013). Paper 145. http://pdxscholar.library.pdx.edu/cengin_fac/145 15 16 17 Corning, Sarah E., Rasul A. Mowatt, and H. Charles Chancellor. "Multiuse trails: Benefits and concerns of residents and property owners." Journal of Urban Planning and Development 138.4 (2012): 277285. 18 Costar Realty Information. CoStar Group, 2015. www.costar.com. Accessed November 2015. 19 20 Lindsey, Greg, et al. "Property values, recreation values, and urban greenways." Journal of Park and Recreation Administration 22.3 (2004): 69-90. 21 22 Parametrix. “Transportation Discipline Report.” Burke Gilman Trail Missing Link: SEPA Draft Environmental Impact Statement. Prepared for Seattle Department of Transportation. (2016). 23 24 Parametrix. “Parking Discipline Report.” Burke Gilman Trail Missing Link: SEPA Draft Environmental Impact Statement. Prepared for Seattle Department of Transportation. (2016). BURKE-GILMAN TRAIL MISSING LINK 7-1 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISCIPLINE REPORT 1 2 Chapter 8: PREPARERS LIST OF 3 BURKE-GILMAN TRAIL MISSING LINK 8-1 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 APPENDICES 2 Appendix A 3 Hedonic Methodology 4 5 6 7 8 9 10 11 Consider the market for single-family homes, although a home is often thought of as a single good, it actually represents a bundle of attributes that are valued by the market. These attributes may reflect the physical characteristics of the home, such as the square footage, number of bedrooms, and age of the home. They also may reflect the amenities of the neighborhood such as school quality or proximity to transportation infrastructure. However, when an individual buys a home, he or she pays a single price, which reflects the collective willingness to pay for the bundle of home attributes. Although the individual’s value for each attribute of the home can not be directly observed, these values may be implicitly determined through the theory of hedonic pricing. 12 13 14 15 16 17 18 19 The hedonic pricing model dates back to Waugh (1929) and is used to study markets, such as home sales, with an abundance of differentiated products and unique product attributes. Much of the hedonic theory was codified by Rosen (1974). Under the law of one price, given a competitive market for goods and services, two products with identical attributes must, necessarily, sell for same price. Therefore, disparities in the price of two differentiated products (such as two distinct homes) must be attributable to the value of the differences in the underlying characteristics of the goods in question. Following this line of reasoning, transaction level price paid for a good, such as a home, may be represented as a function of the unique characteristics of the product, as done in Equation 1. 20 (1) 21 22 23 Given enough market transactions and a reasonable depiction of the relevant product characteristics valued by homeowners, a statistical representation of the determinants of home sales price may be constructed, represented in Equation 2. 24 (2) 25 Here, P represents the final sale price of a given home with n different home characteristics represented 26 by the parameter x and an error term 27 attribute 28 of the resultant change in home sales price. As an example, if 29 30 31 represents the value of the increase in home price due to an increase in the size of the home by one square foot. Thus, in this way, the final sales price of a home may be decomposed into the contributions from all the relevant home characteristics. = ( * * * *, * * * ** * * , . The parameter *** * ,* , * )* * represents the marginal effect of home on the equilibrium sales price. For a small change in the value of , provides the value represents home square footage, 32 8-2 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK ** * PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Appendix B 2 Econmetric Model to Used to Value Existing Trail Infrastructure 3 4 5 6 7 8 The value of proximity to mixed use trails may be statistically distinguished from overall property price using the hedonic methodology outline in Appendix A. Mixed use trails may have disparate impacts on properties depending upon their predominant land use. Therefore, separate models were estimates for single-family homes, multi-family apartment complexes, commercial and industrial properties. In each of these cases, the explanatory variables used to explain property price differ somewhat but the fundamental model structure was identical. 9 10 11 12 13 14 15 16 17 18 The first step of this analysis is to identify an appropriate sample size to isolate the impact of mixed-use trail access on property values from other structural and parcel attributes. The potential sample used for this analysis includes all parcels within King County, Washington. In an ideal world, proximity to existing mixed-use trail would be purely randomly assigned to parcels around the county. However, in practice, mixed-use trails do not follow a purely random spatial pattern. Instead, these trails tend to be concentrated in and around large population centers such as Seattle and Bellevue. Many pedestrian and biking trails, including the Burke-Gilman Trail, follow rail road beds that have been converted to pedestrian uses as the these tracks have been abandoned over the years. Hence, proximity to mixed-use trail is also very likely associated with other measures of accessibility such as drive time to population centers and proximity to other transportation infrastructure. 19 20 21 22 23 24 25 26 27 28 29 30 31 32 The analysis proceeded by first determining the network distance (i.e. distance driving) from each parcel in King County to the closest mixed-use trail. Network distance was used as opposed to Euclidean distance (i.e. as the crow flies) to account for geographic constraints such as waterways and the layout of the existing road grid in determining trail accessibility. Next, the sample was constrained to only those properties that are located less than one mile from a mixed-use trail. This restriction was imposed for several important reasons. Firstly, it is anticipated that only parcels geographically “close” to trail infrastructure are likely to be impacted from the trail. Hence, parcels further than one mile are unlikely to be affected either positively or negatively by the presence of a mixed-use trail. Secondly, the potential for unobserved variable bias due to correlation between proximity to mixed-use trails and other measures of accessibility is reduced by restricting the sample in this way. While parcels that are closer to existing trails may be more accessible than parcels further away, within one mile of a mixed-use trail it is unlikely that some parcels are systematically better served by transit infrastructure or meaningfully closer to population or commercial centers. Thus, by restricting the sample in this way, the impact of proximity to mixed-use trails may be isolated. 33 34 Once the appropriate sample was selected, the hedonic model was constructed for each land use type. The hedonic pricing model uses recent property transactions from 2005 – 2015 and predicts the final price 35 property price as a function of parcel and structural attributes. Let 36 37 price for parcel i in period t adjusted for inflation to 2015 dollars. The natural log of home price is used to compensate for outlier observations sold well above the mean sales price and is common in the literature. 38 In addition, let 39 etc.) and the variable 40 is a vector of fixed effects for transaction year the parcel was sold and 41 42 43 the parcel was sold. Equation 3 represents the hedonic pricing model used to estimate the impact of proximity to mixed use trail on property value for each land use type (e.g. single family, multifamily apartment, commercial, etc.). be the natural log of the sales be a vector of parcel attributes (lot square footage, structural square feet, year built, represents the driving distance from the parcel to the closest mixed-use trail. BURKE-GILMAN TRAIL MISSING LINK represents the month of year 8-3 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 (3) 2 The variable 3 group level to account for unobserved spatial correlation in the distribution of property prices. The 4 parameters 5 property to the final determination of home sales price. 6 The primary parameter of interest is 7 from a mixed-use trail has on property value. If 8 would indicate that parcels closer to the trail benefit from the trails presence. On the other hand, if 9 10 11 is a normally distributed error term with mean zero and which is clustered at the block are parameters to be estimated and represent the marginal contribution of each , which represents the marginal impact of an increase in distance is less than zero and statistically significant, this is greater than zero, this would indicate that parcels further away from the trail are statistically better off. It is anticipated that parcels may have a heterogeneous response to proximity to trails. We therefore estimate separate models for each land use type . 12 8-4 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 Appendix C 2 Results of Hedonic Valuation Models 3 4 5 6 7 8 9 Separate hedonic models were estimated for single family homes, multi-family apartments, commercial and industrial land uses according to Equation 3 in Appendix B. Data used for purposes of estimation were collected from the King County Assessors office. This information includes a spatial record for the location and dimensions of each parcel in a geographic information system (GIS), relevant parcel and structural attribute information and records of every property sale from the late 1980s to the present day (King County Assessor). This section provides summary statistics for the explanatory variables and model results for each land use type. 10 Single-Family Homes 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 For the model of single-family homes, the dependent variable is the natural log of the final price paid for homes sold in King County. There were a total of 57,381 home sales transactions between the years 2005 to 2015 included in this analysis. Home price is modeled as a function of the lot acreage, the number of stories of the home, the structural square footage (in 100s of square feet), the number of bedrooms, age of the structure, the number of bathrooms, a dummy variable if the home has a fireplace, a categorical variable capturing the quality of construction, and the waterfront frontage (in 100s of feet). In addition, we include several geographic parcel attributes based upon the location of the parcel. These variables include the distance to mixed use trail, distance to downtown Seattle, distance to Bellevue, distance to the Puget Sound and distance to the closest lake, measured in miles, along with dummy variables which capture if the parcel has a waterfront view, a mountain view, a city view or the presence of a nuisance on the parcel. In addition, the model includes controls for the year and month the home was sold and the city the parcel is located in. Table 2 provides coefficients and standard errors for the hedonic model of singlefamily home sale price. Asterisks reported next to coefficients indicate the statistical significance of these results. Three asterisks (***) indicate significance at the 99% level, two asterisks (**) indicate significance at the 95% level and one asterisk (*) indicates significance at the 90% level. 26 27 Table 1: Hedonic Model of Single-family Homes Sold in King County (2005 2015) within 1mi of a Mixed-use Trail Variable Coefficient Standard Error Lot Acres 0.034864*** 0.007414 Stories 0.017967* 0.010305 Structure Sqft (100s) 0.018322*** 0.000711 Bedrooms -0.009689*** 0.003666 Age -0.007979*** 0.000903 Age^2 0.000221*** Age^3 -0.000001*** 0.0000001 Bathrooms 0.025983*** 0.004204 Fireplace 0.086461*** 0.009507 Construction Quality 0.152504*** 0.006132 Building Characteristics BURKE-GILMAN TRAIL MISSING LINK 0.000022 8-5 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT Variable Coefficient Standard Error 0.20351** 0.089525 Distance to Trail -0.047155** 0.021879 Distance to Puget Sound -0.005457 0.007216 Distance to Lake -0.009425 0.007523 Distance to Major Road 0.06613*** 0.009337 Distance to Seattle -0.018714** 0.00736 Distance to Bellevue -0.016354* 0.00861 Water View 0.138988*** 0.017147 Mountain View 0.061625*** 0.014827 City View 0.077358*** 0.027282 Property Nuisances -0.042722*** 0.006421 Waterfront Frontage (100s) Spatial Amenities Location Amenity Fixed Effects City Yes Sale Month Yes Sale Year Yes Observations 57,381 Clusters 519 ***Statistical significance at the 99% level, **Significance at the 95% level, *Significance at the 90% level 1 2 3 4 5 6 7 8 9 10 11 12 13 The results reported in Table 2 generally conform to expectation where significant. Larger parcels with more square footage, building stories and bathrooms tend to sell for more money. After controlling for structural square footage, the number of bedrooms has a negative effect, indicating diminishing returns to increasing the number of bedrooms relative to the overall structural square footage. Homes with better construction quality, more waterfront frontage and with a fireplace also tend to sell for higher values. Age of the structure has a non-linear effect. At first, as a home ages it diminishes in value, increasing the age of a new home by one year decreases the value of the home by -0.7%. Once a home reaches approximately 40 years old, the value begins to rise by approximately 0.3% per year, due to the vintage nature of these homes. Distance to major roads have a positive effect on home value, which is most likely due to the nuisance of being close to major transportation infrastructure. Parcels that are further away from the job centers of Seattle or Bellevue also tend to be less valuable. Finally, homes that report having any sort of view tend to sell for more than homes that lack a view. Water views are the most valuable and mountain views are the least valuable. 14 15 16 The primary variable of interest is the distance to the closest mixed-use trail. The coefficient for this variable is negative, indicating that increasing distance from a trail tends to reduce the value that a home is sold for. These results suggest that increasing the distance of a home from a mixed-use trail by a tenth 8-6 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 4 5 of a mile would reduce the expected sale price of the home by approximately -0.5%. This coefficient is statistically significant at below the 95% level. Hence, these results support the hypothesis that expanding access to mixed-use trail by constructing the BGT Missing Link would likely result in an increase in the value of single family homes in the vicinity. The expected magnitude of the impact would depend upon the relative position of the home in relation to the new trail. 6 Multi-family Apartment Buildings 7 8 9 10 11 12 13 14 15 16 In the model of multi-family apartment, the dependent variable is the natural log of building price per building square foot. There were a total of 2,774 apartment buildings sold in King County between the years 2005 to 2015 that were within one mile of a mixed-use trail. The variables used to predict the building price per square foot include lot acreage, building square footage, the number of buildings, the average quality of construction, the average number of stories per building, the average age of the structures and waterfront frontage (in 100s of feet). Other spatial controls include the distance to mixeduse trail, distance to Downtown Seattle, distance to Bellevue, distance to the Puget Sound, distance to the closest lake and the distance to major road. Table 3 reports the coefficients and standard errors for the model of the hedonic building price per square foot for multi-family apartment buildings sold in King County. 17 18 Table 2: Hedonic Model of Multi-family Apartment Buildings Sold in King County (2005 2015) within 1mi of a Mixed-use Trail Variable Coefficient Standard Error Lot Acres -0.013124*** 0.003619 Total Sq Ft -0.00014** 0.000064 Number of Buildings 0.009469 0.007763 Constriction Quality 0.192399*** 0.038229 Stories 0.001915 0.008699 Age -0.008325 0.011316 Age^2 0.000101 0.000269 Age^3 -0.000001 0.000002 Waterfront Frontage (100s) -0.154137 0.227356 Building Characteristics Spatial Amenities Distance to Trail -0.190683 0.165652 Distance to Puget Sound -0.039952 0.04198 Distance to Lake -0.047123 0.049689 Distance to Major Road 0.054459 0.062096 Distance to Seattle 0.035824 0.043733 Distance to Bellevue -0.063876 0.056205 Fixed Effects City BURKE-GILMAN TRAIL MISSING LINK Yes 8-7 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT Variable Coefficient Sale Month Yes Sale Year Yes Observations 2,774 Clusters 298 Standard Error ***Statistical significance at the 99% level, **Significance at the 95% level, *Significance at the 90% level 1 2 3 4 5 6 7 Relatively few coefficients from the hedonic model of apartment sale price are statistically significant. Both lot acreage and structural square footage have a negative impact on the building price per square foot. Increasing lot acreage and building square footage by 10% would decrease price paid per square foot by -0.3% and -0.7% respectively. These results indicate decreasing returns to increasing apartment size. Smaller apartment buildings can charge higher prices per square foot than larger ones, though the total building value is still larger on average for bigger buildings. Also, as expected, buildings with higher quality sell for higher value. 8 9 10 11 12 The coefficient for distance to a mixed-use trail is negative but insignificant. The model suggests that on average apartment buildings are expected to benefit from locating close to a mixed-use trail. On average, increasing the distance from mixed-use trail by a tenth of a mile is expected to decrease the building price by approximately -1.7%. However, because this result is insignificant, these results primarily support the hypothesis that apartment buildings are statistically unaffected by the presence of nearby mixed-use trails. 13 Commercial Buildings 14 15 16 17 18 19 20 21 22 23 24 25 The dependent variable for the hedonic model of commercial property transaction is the natural log of property sale price per building square foot, adjusted for inflation. Our sample of commercial properties consists of all commercial office buildings, retail and restaurants located within one mile of a mixed-use trail in King County sold between 2005 and 2015. This combines for a total sample size of 990 commercial property sales. The variables used to predict the building price per square foot include lot acreage, building square footage, the number of buildings, the average quality of construction, the average number of stories per building, the average age of the structures, waterfront frontage (in 100s of feet) and variables which capture the percentage of the property devoted to retail and restaurant uses. Other spatial controls include the distance to mixed-use trail, distance to Downtown Seattle, distance to Bellevue, distance to the Puget Sound, distance to the closest lake and the distance to major road. Table 4 reports the coefficients and standard errors for the model of the hedonic building price per square foot for commercial buildings sold in King County. 26 8-8 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 Table 3: Hedonic Model of Commercial Buildings Sold in King County (2005 2015) within 1mi of a Mixed-use Trail Variable Coefficient Standard Error Lot Acres -0.019966*** 0.003398 Total Sq Ft -0.000067 0.000081 Number of Buildings 1.565988*** 0.449505 Quality 0.076134 0.065101 Stories -0.001883 0.013125 Age -0.027974* 0.015024 Age^2 0.000506* 0.000306 Age^3 -0.000003 0.000002 Building Characteristics Waterfront Frontage (100s) 0.229003** 0.111839 Restaurant 0.304709** 0.139303 Retail -0.091911 0.142282 Distance to Trail -0.208228 0.231239 Distance to Puget Sound -0.069013 0.072306 Distance to Lake -0.09142 0.082184 Distance to Major Road -0.002755 0.098697 Distance to Seattle 0.044539 0.07842 Distance to Bellevue -0.091465 0.085707 Spatial Amenities Fixed Effects City Yes Sale Month Yes Sale Year Yes Observations 990 Clusters 192 ***Statistical significance at the 99% level, **Significance at the 95% level, *Significance at the 90% level 3 4 5 6 7 Several important property characteristics have a significant effect on determining property values. Lot acreage and building square footage exhibit diminishing marginal returns. A ten percent increase in lot acres and building square footage would result in a decrease in price per square foot of -0.6% and -0.4%, respectively. The number of buildings and waterfront frontage are also significant and positive. Age of the structure has a largely negative effect on property value. An increase in property age decreases BURKE-GILMAN TRAIL MISSING LINK 8-9 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 property value by approximately -0.8% on average. Relative to commercial office spaces, restaurants command higher price premiums and retail commands slightly lower price premiums. 3 4 5 6 Distance to mixed-use trail is insignificant but negative in these results. An increase in distance from trail is expected to decrease property values by approximately -1.8% on average. This effect is, however, insignificant supporting the hypothesis that commercial properties will be largely unaffected by proximity to mixed-use trails. 7 Industrial Buildings 8 9 10 11 12 13 14 15 16 17 18 19 The dependent variable for the hedonic analysis of industrial property values is the natural log of sale price per building square foot, adjusted for inflation. The sample consists of all properties located within one mile of a mixed-use trail sold between 2005 – 2015 that are used for light/medium industrial, heavy industrial, flex industrial, storage or other industrial. The total sample size consists of 593 properties. The explanatory variable used to predict industrial property value include lot acreage, building square footage, the number of buildings, the average quality of construction, the average number of stories per building, the average age of the structures, waterfront frontage (in 100s of feet) and variables which capture the percentage of the property devoted to heavy industrial, flex industrial, storage of other industrial uses. Other spatial controls include the distance to mixed-use trail, distance to Downtown Seattle, distance to Bellevue, distance to the Puget Sound, distance to the closest lake and the distance to major road. Table 5 reports the coefficients and standard errors for the model of the hedonic building price per square foot for industrial buildings sold in King County. 20 8-10 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 Table 4: Hedonic Model of Industrial Buildings Sold in King County (2005 2015) within 1mi of a Mixed-use Trail Variable Coefficient Standard Error Lot Acres -0.001732 0.002364 Total Sq Ft -0.000085** 0.000037 Number of Buildings -0.156518 0.209141 Quality 0.03952 0.031258 Heavy Industrial -0.283022 0.263402 Flex Industrial 0.080458 0.135767 Storage 0.977779* 0.511835 Other Uses 0.41695* 0.251989 Stories 0.135941** 0.063362 Age 0.009265 0.009666 Age^2 -0.000364 0.000253 Age^3 0.000003 0.000002 Building Characteristics Waterfront Frontage (100s) 0.212678 0.31894 Spatial Amenities Distance to Trail 0.103329 0.163103 Distance to Puget Sound 0.009467 0.055789 Distance to Lake -0.004398 0.045377 Distance to Major Road 0.090829* 0.051478 Distance to Seattle -0.036603 0.081533 Distance to Bellevue 0.037894 0.082403 Fixed Effects City Yes Sale Month Yes Sale Year Yes Observations 593 Clusters 110 4 5 6 7 8 Similar to results from other building type models, we find that both lot acreage and building square footage have a negative effect on building price per square foot. Overall, an increase in lot acres and building square footage by 10% would result in a decrease in price per square foot by approximately 0.05% and -0.5%, respectively. On average, both storage and other industrial uses command higher price BURKE-GILMAN TRAIL MISSING LINK 8-11 JANUARY 29, 2016 PRELIMINARY DRAFT ECONOMIC DISIPLINE REPORT 1 2 3 premiums relative to light/medium industrial uses and the number of building stories has a positive impact on industrial land values. Most geographic proximity variables are statistically insignificant though distance to major road is significant and positive, albeit at the 90% level. 4 5 6 7 8 There is little evidence to suggest that industrial properties are substantially harmed by locating near mixed-use trails. The results suggest that an increase in distance from a mixed-use trail by a tenth of a mile would increase property values by approximately 1.1%, which is statistically insignificant. Industrial properties located closer to mixed-use trails may be slightly detrimentally impacted by the trail but this effect is statistically indistinguishable from zero. 8-12 JANUARY 29, 2016 BURKE-GILMAN TRAIL MISSING LINK