Wednesday, May 11, 2011

Controller's Economic Impact Report: Treasure Island/Yerba Buena Island Project

BOMA San Francisco Members:

The Controller's Office has released its economic impact report on the Treasure Island/Yerba Buena Island Project.

The report may be downloaded here:

Main Conclusions

The development of Treasure Island/Yerba Buena Island will transform more than 490 acres of underutilized land into a major new mixed-use, transit-oriented district in the midst of San Francisco Bay. The project is designed and planned to be a model of sustainable development. It will provide a mix of land uses, including market-rate and affordable homes, regional and neighborhood retail, office space, two hotels, community services, and an expansive parks and open space network, among other uses.

The development of the project will create thousands of construction jobs, and inject an estimated $3.2 billion into the City’s economy during its projected 20 year build-out. The development of the project will result in significant employment opportunities, with an average of about 1,100 direct and indirect jobs per year during build-out, with about 750 of these jobs representing direct employment in the construction trades, equivalent to about 3% of citywide construction jobs projected during the same period.

The project will create the opportunity for job growth from businesses occupying the completed non-residential buildings, with an estimated 2,200 direct employees projected at build-out. Based on the proposed land use mix, employment opportunities will be created in several industries, with an emphasis on retail and visitor-serving jobs, with annual average pay ranging from $25,000 to $100,000 per year, and aggregate wages estimated at $134 million per year upon full build-out.

An additional 1,400 indirect and induced jobs are estimated at build-out, that together with direct employment attributed to project, will contribute about $1.0 billion annually to San Francisco’s economic output (defined as total San Francisco production attributed to the project, including spending on all intermediate goods and services, compensation and profit). This represents an expansion of about 0.3% to the City’s existing economic output during the projection period.

The impact of new development will not be limited to the economic activity generated by its construction and permanent employment; ultimately, 8,000 new households will make approximately $221 million per year in retail purchases, supporting businesses in San Francisco, Treasure Island, and the region, further stimulating the economy. 8,000 housing units will increase the City’s supply of housing by about 2.5% upon build-out, reducing citywide housing prices by an estimated 2% over the long term.

During the 40-year projection period, the combined impacts of Treasure Island’s construction, permanent employment, and increased housing supply is estimated to result in an annual average of 5,200 jobs and almost $2.4 billion in economic output annually through 2050.

Build-out of the project will also increase the City’s property tax base by approximately $5 billion. The Financing Plan for the project specifies the portion of property tax increment to be allocated to the Infrastructure Financing District (IFD), about 65% of the base 1% tax rate. Under the Financing Plan, 57% of the base 1% tax rate would be allocated to the IFD (with 10% used for housing, and 47% available for IFD bonds), with about 8% remaining for City Funds, estimated to total $3.8 million upon build-out. Of this 8%, the Controller determines the portion allocated to the General Fund and to other City funds.

For more information, contact Kurt Fuchs, Senior Economist, at (415) 554-5369, or Ted Egan, Chief Economist, at 554-5268.

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