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July 10, 2018

Mr. Jorge Mas

Dear Mr. Mas:

Attached, please find a summary of the estimated direct public sector fiscal benefits to the City
of Miami, Miami-Dade County, State of Florida, Miami-Dade School Board, and other taxing
entities which will result from the proposed business activity at a redeveloped Melreese Golf
Course at buildout. We have attempted to be grounded in our assumptions. For example,
rather than make some global estimates of taxable real estate values based upon construction
costs (cost approach), we have benchmarked the taxable valuations primarily by comparing to
similar existing developments. This resulted in lower, but more realistic, estimates than would
otherwise be the case. Please note our estimates are based upon a development program and
project performance metrics provided by your group which have yet to be subject to an
independent market analysis by Lambert Advisory (Lambert).

In sum, we estimate that the redevelopment program will generate an additional $420 million
in taxable real estate value, over $385 million in taxable sales, nearly $65 million in tangible
personal property value, and more than $40.5 million in taxable lease revenue. Based upon
various tax regimes at current rates, we estimate that the total annual public fiscal tax generated
by the project at build out will be in excess of $44.35 million (2018 dollars). While the exhibit
attached to this letter shows the detailed estimates and project calculations, the table below
summarizes our estimate by the taxing entity:

Taxing Entity Type Estimated Annual Tax


Generated at Build Out
City of Miami Ad Valorem real estate, Tangible $5.853 million
personal property, Parking
surcharge, ½ penny local share
sales tax
Miami-Dade County Ad Valorem real estate, Tangible $11.096 million
personal property, Hotel ‘bed
taxes’, ½ penny local share sales
tax
State of Florida Sales taxes on goods, services $23.55 million
and leases
Miami-Dade School Board Ad valorem real estate, Tangible $3.392 million
personal property
Other Taxing Entities Ad valorem real estate $0.46 million
Mr. Jorge Mas

The graph below indicates the breakdown of taxes generated by project element to the City of
Miami. Depending upon the taxing entity (City, County, State, etc.) and the nature of taxes
generated by each project element (i.e. retail creates more sales tax which primarily benefits the
State while hotel more ‘bed tax’ which is collected by the County), the relationship of tax
generation by project element is adjusted accordingly.

Golf Entertain
2% Hotel
Retail/Entertain 13%
25% Office
17%
Stadium
Parking 11%
32%

It is important to note that the table and graph above and detailed breakdown on the follow
page exclusively incudes estimates of the taxes generated by on-site development and
business activity and does not include any estimate of the employment taxes generated by
worker activity on the site, indirect taxes generated by suppliers or other downstream
economic activity. It also does not include licensure and other fees which will be paid to the
City of Miami and other taxing entities over the course of the year and which depends
heavily upon the specific type of businesses which will be located on property. These fees
and indirect taxes are in addition to the revenue detailed above and on the following page.

Should you have any further questions regarding our estimates or analysis please do not
hesitate to contact me at (305) 503-4095 or via email: plambert@lambertadvisory.com

Very truly yours,

Paul Lambert
Managing Principal

2
Melreese Golf Course Development
Direct Annual Fiscal Impact (At Build Out)
Hotel Office Stadium Parking Retail/Entertainment Golf Entertain
750 400,000 25,120 3,750 600,000 15,000,000
Category Rate/Mils rooms leasable square feet seats spaces leasable square feet annual sales Total

Taxable Real Estate Value $ 75,000,000 $ 112,000,000 $ 70,999,922 $ 15,000,000 $ 135,000,000 $ 12,100,000 $ 420,099,922
Taxable Revenue from Operations $ 60,450,000 $ 42,000,640 $ 11,512,500 $ 256,500,000 $ 15,000,000 $ 385,463,140
Tangible Personal Property Valuation (Net Exemption) $ 17,625,000 $ 10,703,333 $ 4,823,040 $ 3,750,000 $ 24,327,500 $ 3,700,000 $ 64,928,873
Taxable Lease Revenue $ 16,160,000 $ 24,360,000 $ 40,520,000

City
Non-Debt Ad Valorem Tax Real Estate (City mils) 7.4365 $ 557,738 $ 832,888 $ 527,991 $ 111,548 $ 1,003,928 $ 89,982 $ 3,124,073
Debt Ad Valorem Tax Real Estate (City mils) 0.5935 $ 44,513 $ 66,472 $ 42,138 $ 8,903 $ 80,123 $ 7,181 $ 249,329
Non-Debt Ad Valorem Tangible Personal Property (City mils) 7.4365 $ 131,068 $ 79,595 $ 35,867 $ 27,887 $ 180,911 $ 27,515 $ 482,844
Debt Ad Valorem Tax Tangible Personal Property (City mils) 0.5935 $ 10,460 $ 6,352 $ 2,862 $ 2,226 $ 14,438 $ 2,196 $ 38,535
Parking Surcharge 15.00% $ 1,726,875 $ 1,726,875
1/2 penny local share sales tax (City) 0.06% $ 36,270 $ 25,200 $ 6,908 $ 153,900 $ 9,000 $ 231,278
City Subtotal $ 780,049 $ 985,308 $ 634,059 $ 1,884,345 $ 1,433,300 $ 135,874 $ 5,852,934

County
1/2 penny local share sales tax (county) 0.30% $ 181,350 $ 126,002 $ 34,538 $ 769,500 $ 45,000 $ 1,156,389
Local Option 1/2 penny Sales Tax - Transportation 0.50% $ 302,250 $ 210,003 $ 57,563 $ 1,282,500 $ 75,000 $ 1,927,316
Local Option 1/2 penny Sales Tax - Indigent Care 0.50% $ 302,250 $ 210,003 $ 57,563 $ 1,282,500 $ 75,000 $ 1,927,316
Non-Debt Ad Valorem Real Estate Tax (County mils) 4.6669 $ 350,018 $ 522,693 $ 331,350 $ 70,004 $ 630,032 $ 56,469 $ 1,960,564
Debt Ad Valorem Real Estate Tax (County Mils) 0.4000 $ 30,000 $ 44,800 $ 28,400 $ 6,000 $ 54,000 $ 4,840 $ 168,040
Non-Debt Ad Valorem Tangible Personal Property Tax (County mils) 4.6669 $ 82,254 $ 49,951 $ 22,509 $ 17,501 $ 113,534 $ 17,268 $ 303,017
Debt Ad Valorem Tangible Personal Property Tax (County Mils) 0.4000 $ 7,050 $ 4,281 $ 1,929 $ 1,500 $ 9,731 $ 1,480 $ 25,972
Hotel 'Bed Tax' 6.00% $ 3,627,000 $ 3,627,000
County Subtotal $ 4,882,172 $ 621,726 $ 930,196 $ 244,667 $ 4,141,797 $ 275,057 $ 11,095,613

State
Sales Tax - Goods & Services 5.50% $ 3,324,750 $ 2,310,035 $ 633,188 $ 14,107,500 $ 825,000 $ 21,200,473
Sales Tax - Lease of Commercial Real Property 5.80% $ 937,280 $ 1,412,880 $ 2,350,160
State Subtotal $ 3,324,750 $ 937,280 $ 2,310,035 $ 633,188 $ 15,520,380 $ 825,000 $ 23,550,633

Other Entities
Non-Debt Ad Valorem Real Estate Tax School Board (mils) 6.7740 $ 508,050 $ 758,688 $ 480,953 $ 101,610 $ 914,490 $ 81,965 $ 2,845,757
School Board Debt Real Estate Ad Valorem Tax (mils) 0.2200 $ 16,500 $ 24,640 $ 15,620 $ 3,300 $ 29,700 $ 2,662 $ 92,422
Non-Debt Ad Valorem Tangible Personal Property Tax School Board (mils) 6.7740 $ 119,392 $ 72,504 $ 32,671 $ 25,403 $ 164,794 $ 25,064 $ 439,828
School Board Debt Tangible Personal Property Ad Valorem Tax (mils) 0.2200 $ 3,878 $ 2,355 $ 1,061 $ 825 $ 5,352 $ 814 $ 14,284
Other Taxing Entity (mils) 1.0933 $ 81,998 $ 122,450 $ 77,624 $ 16,400 $ 147,596 $ 13,229 $ 459,295
Other Subtotal $ 729,817 $ 980,637 $ 607,930 $ 147,537 $ 1,261,932 $ 123,734 $ 3,851,587

Total $ 9,716,787 $ 3,524,950 $ 4,482,220 $ 2,909,736 $ 22,357,408 $ 1,359,665 $ 44,350,767